TO THE MEMBERS OF
SHAHI SHIPPING LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying Standalone financial statements of SHAHI SHIPPINGLIMITED ("the Company") which comprise the Balance Sheet as at March312021 Profitand Loss (including Other Statement Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "standalone Ind AS financial In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid StandaloneFinancial Statements give the information required by the Companies Act 2013 as amended("the Act") in the manner so required and give a true and fair view inconformity with accounting principles generally accepted in India of the state of affairsof the Company as at March 31 2021 its profits including other comprehensive incomechanges in equity and its cash flows for the year ended on that date.
BASIS OF OPINION
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specifiedunder section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statement's section of our report. We areindependent of the Company in accordance with the Code of Ethics' issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the Standalone Financial Statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Standalone Financial Statements.
EMPHASIS OF MATTER
(a) The other financial assets in the Balance sheet includes Rs. 645.23 lakhs ofinterest subsidy receivable from Central Government and Inland Waterways Authority. Torecover the same the petition is pending. The ultimate outcome of the matter cannotpresently be determined.
(b) Provision for expense for the year 2020-2021 amounting to Rs 69.36 Lakhs wasoutstanding as on 31st March 2021 as provided by Management however still invoices arenot received on date of signing of this report. Therefore we cannot form our opinion onthe provision appearing as on 31st March 2021.
(c) The Trade payable are Rs. 321.29 Lakhs. The confirmations from creditors are notprovided and hence we are unable give any opinion on trade payable. So we cannot form anyopinion on trade payable.
(d) The Company has not established its internal financial control over financialreporting on criteria based on or essential components of internal control stated in theGuidance Note of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India. Because of this reason we are unable toobtain sufficient appropriate audit evidence to provide a basis for our opinion whetherthe Company had adequate internal financial controls over financial reporting as at March31 2021.
(e) We are informed that due to extension of due dates of filling of TDS return forquarter ended March 31 2021 the TDS receivable in books of accounts could not bereconciled or matched with Form 26AS for F.Y. 2020-21 as many vendors and debtors have notuploaded the relevant details relating to Company for the quarter ended March 31 2021.The impact of non-availability of We have considered the disclaimer reported above indetermining the nature timing and extent of audit tests applied in our audit of thefinancial statements of the Company and the disclaimer does not affect our opinion on thefinancial statements of the Company.Our opinion on the standalone financial results ismodified to the extent for the above matters.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements for the year ended March31 2021. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. There are no key audit matters identified in ouraudit.
Information Other than the Standalone Financial Statements and Auditor's report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe Standalone Financial Statements and our auditor's report thereon. Our opinion on theStandalone Financial Statements does not cover the other information and we do not expressany form of assurance conclusion thereon. In connection with our audit of the StandaloneFinancial Statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we required to report that fact. We havenothing to report in this regard.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian accounting Standards("Ind AS") specified under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error. Inpreparing the Standalone Financial Statements the management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also :
Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial control system with reference to financial statements in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the Standalone Financial Statements thatindividually or in aggregate makes it probable that the economic decisions of a reasonablyknowledgeable user of the Standalone Financial Statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) Planning the scope of our audit work and in evaluating the results of our work and
(ii) To evaluate the effect of an identified misstatement in the Standalone FinancialStatements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein year ended and are therefore the key audit matters. We describe the audit of theStandalone Financial Statements for the financial these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give specified in paragraphs 3 the Annexure "A" a statementon the matters and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those book;
c) The Balance sheet the Statement of Profit & Loss including the statement ofOther Comprehensive Income Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
e) On the basis of the written representation received from the directors as on March31 2021 taken on records by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a Director in terms of Section 164(2) of theAct;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Financial Statements and theoperating effectiveness of such controls refer to our separate Report in Annexure"B" to this report;
g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;
h) With respect to the matters to be included in the Auditor's report in accordancewith the rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in ouropinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by company.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of ShahiShipping Limited on the standalone financial statements for the year ended March 31 2021.
(i) The Company has maintaining records showing particulars including quantitativedetails & situation of fixed assets.
(a) Some fixed assets have been physically verified by the management during the yearin accordance with phased program of verification adopted by the company. However due toCOVID-19 some fixed assets could not be physically verified by management. Hencematerial discrepancies between the book records and physical inventory were not noticed inrespect of assets not physically verified duringthe . year by management
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for the following:
(Rs. In Lakhs)
|Particulars (Office Premises) ||Amount |
|Gross Block as at 31 March 2021 ||2.34 |
|Net Block as at 31 March 2021 ||0.71 |
(ii) The Company is in Shipping business therefore Clause of the above mentioned orderregarding inventory and its physical verification etc. do not apply in its case. TheCompany does purchase stores and spare parts for its ships & barges which are directlytreated as consumed as and when supplied to its ships & barges. Thus paragraph 2 (i)(ii) and (iii) of the order is not applicable.
(iii) According to the information and explanations provided to us the Company has notgranted loans secured or unsecured to companies firm or other parties covered in theregister maintained under section 189(2) of the act and hence sub clause (a) (b) (c) ofParagraph 3 of the said order are not applicable to company and hence not commented upon.
(iv) In our opinion and according to the information and explanations provided to usthe Company has not granted any loans or provided any guarantees or security to theparties covered under Section 185 of the Act. The Company has complied with the provisionsof Section 186 of the Act in respect of investments made or loans or guarantee or securityprovided to the parties covered under Section 186 of the Act.
(v) According to the information and explanation provided to us the Company has notaccepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause3(v) of the Order are not applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013 for any of the services rendered by thecompany.
(vii) a) According to the information and explanations given to us and according to thebooks and records as produced and examined by us in our opinion the undisputed materialstatutory dues in respect of provident fund employees state insurance sales-taxincome-tax service tax customs duty excise duty value Added Tax cess and othermaterial statutory dues as applicable have been generally regularly deposited by theCompany during the year with the appropriate authorities except for following: The extentof the arrears of statutory dues outstanding as at 31/03/2021 are of Maharashtra LabourWelfare Fund for Rs 7488 ; Professional Tax for Rs 11432 and Income Tax pertaining tofinancial years 2011-2012 Rs.0.85 Lakhs have been outstanding for a period more than sixmonths.
b) According to the information and explanation given to us there are no dues ofIncome Tax Sales Tax Service Tax Customs Duty Excise Duty or Value Added Taxoutstanding on account of any dispute.
(viii) Based on our audit procedures and on the basis of information and explanationsgiven by the management we are of the opinion that the company has not defaulted in therepayment of dues to financial institutions banks governments or debenture holders. Thecompany did not have any outstanding dues to debenture holders during the year.
(ix) The Company has not applied for any Term Loan and has not raised money by way ofInitial public offer / further public offer (including debt instruments) during the year.Accordingly paragraph 3(ix) of the Order is not applicable.
(x) Based upon the audit procedures performed and as per the information andexplanations given to us we have neither come across any instance of fraud on or by thecompany its officers or employees noticed or reported during the period nor have webeen informed of such case by the management.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
(xii) In our opinion company is not a Nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the order are not applicable to the company.
(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards. However during the period under review related partytransactions were undertaken but no prior approval regarding the same were obtained fromthe audit committee as required under clause 23.2 of the SEBI (Listing Obligations andDisclosure requirements Regulation 2015)
(xiv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe period under review.
(xv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions during the period with directors or persons connected with him. Accordinglyparagraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanation given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.
| ||For B. P. Shah & Co. |
| ||Chartered Accountants |
| ||ICAI Firm Registration No.109517W |
|Place : Mumbai ||Pathik Shah |
|Date : June 28th 2021 ||Partner |
|UDIN: 21138847AAAAEE5466 ||Membership No. 138847 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of ShahiShipping Limited on the standalone financial statements for the year ended March 31 2021.We have audited the internal financial controls over financial reporting of Shahi ShippingLimited ("the Company") as of March 31 2021 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancialcontrols that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.
Our audit of internal financial obtaining an understanding of internal financialcontrols over financial reporting assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.COVID-19 pandemic has resulted in adifferent and unique working environment which required performance of audit proceduresremotely.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company ;and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also financial reporting to future periods are subject to the risk that the projectionsof any evaluation of the internal financial internal financial because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
Disclaimer of Opinion
Accordingly to the information and explanation given to us the Company has notestablished its internal financial financial reporting on criteria based on or consideringthe essential components of internal control stated in the Guidance Note of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India. Because of this reason we are unable to obtain sufficientappropriate audit evidence to provide a basis for our opinion whether the Company hadadequate internal financial controls over financial reporting and whether such internalfinancial controls were operating effectively as at March 31 2021.
We have considered the declaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the financial statements of the company andthe disclaimer does not affect our opinion on the financial statements of the Our opinionis modified in respect of this matter.