Report of the Auditors to the members of Varun Shipping Company Limited
to the members of Varun Shipping Company Limited
We have audited the attached Balance Sheet of VARUN SHIPPING COMPANY LIMITED, as
at 30th September, 2012 and also the Profit and Loss Account and the Cash Flow Statement
for the period of 18 months ended on that date annexed thereto. These financial statements
are the responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in
India. Those Standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of the Companies Act,
1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and
5 of the said Order.
2. Further to our comments in the Annexure referred to in Paragraph 1 above, we report
that :
a) We have obtained all the information and explanations, which to the best of 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 the
Company so far as appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by
this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this
report comply with the applicable accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the Directors, as on 30th
September, 2012 and taken on record by the Board of Directors, we report that none of the
Directors is disqualified as on 30th September, 2012 from being appointed as a Director in
terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f) Subject to our comments in Annexure referred to in Paragraph 1, in our opinion and
to the best of our information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the accounting principles
generally accepted in India:
i. In the case of the Balance Sheet, of the state of affairs of the Company as at 30th
September,
2012.
ii. In the case of the Profit and Loss Account, of the profit for the period ended on
that date.
iii. In the case of Cash Flow Statement, of the cash flows for the period ended on that
date.
|
For SORAB S. ENGINEER & CO. |
|
Chartered Accountants |
|
Firm Registration Number : 110417W |
|
CA M.P. ANTIA |
|
Partner |
| Mumbai: 29th November, 2012. |
Membership. No. 7825 |
Annexure to the Auditors Report
Annexure referred to in Para 1 of our report of even date to the members of Varun
Shipping Company Limited
i. a) The Company is maintaining proper records of its fixed assets except Furniture
and Fixtures.
b) The fixed assets have been physically verified by the Management during the year at
reasonable intervals and no material discrepancies were noticed.
c) According to the information and explanations given to us, the Company has not
disposed off substantial part of its fixed assets during the year.
ii. The Company owns and operates ships and hence a comment on inventory does not apply
in this case. The Company does purchase stores and spare parts for its ships, which are
directly treated as consumed as and when supplied to its ships. Stocks of bunkers have
been physically verified by the Management.
iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from
Companies, Firms or other parties covered in the register maintained under Section 301 of
the Companies Act, 1956:
a) The Company has granted unsecured loans to 5 companies covered in the register
maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the
maximum balance outstanding at any time during the year is Rs. 46,781.89 Lacs and the year
end balance is Rs. 32,508.56 Lacs.
b) In our opinion and according to the information and explanations given to us, the
rate of interest and other terms and conditions of such loans, are not, prima facie,
prejudicial to the interest of the Company.
c) In respect of the said loans the borrower has been regular in payment of the
interest as stipulated. The terms of arrangement do not stipulate any repayment schedule
and is repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not
applicable to the Company in respect of repayment of the principal amount.
d) There is no overdue amount of more than Rupees one lakh in respect of the loans
granted to companies listed in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, paragraph 4(iii)(d) of the Order is not applicable.
e) The Company has not taken any loans, secured or unsecured from Companies, Firms and
other parties covered in the register maintained under Section 301 of the Companies Act,
1956. Accordingly paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.
iv. In our opinion and according to the information and explanations given to us, there
are adequate internal control procedures commensurate with the size of the Company and the
nature of its business with regard to purchases of stores, spare parts and fixed assets.
During the course of our audit, we have not observed any major weaknesses in internal
control system of the Company.
v. a) According to the information and explanations given to us, we are of the opinion
that the articulars of all contracts or arrangements that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements entered in the register
maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees
five lakhs in respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time.
vi. According to the information and explanations given to us, the Company has not
accepted fixed deposits from public and hence, provisions of Sections 58A and 58AA and
other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the public are not
applicable.
vii. In our opinion and according to the information and explanations given to us, the
Company has an internal audit system commensurate with the size and nature of its
business.
viii. Maintenance of cost records has not been prescribed by the Central Government
under Clause (d) of sub-section (I) Section 209 of the Companies Act, 1956.
ix. a) According to the records of the Company, undisputed statutory dues of Provident
Fund,
Employees State Insurance, Investor Education Fund, Sales Tax, Wealth Tax, Customs
Duty, Excise Duty and other statutory dues have generally been regularly deposited with
the appropriate authorities.
However undisputed statutory dues of Income Tax and Service Tax have not generally been
regularly deposited with the appropriate authorities. The following are the outstanding
statutory dues as at the last date of the financial year which were outstanding for a
period of more than six months from the date they became payable:
| Name of the Statute |
Nature of the Dues |
Amount (Rs. in Lacs) |
Period to which the amount relates |
| Income tax Act, 1961 |
Income Tax |
651.39 |
November 2011 to February 2012 |
Payment of Service Tax amounting to Rs.734. 13 Lacs is outstanding on 30th September,
2012 for a period of more than six months, as the liability for the same has not been
accepted by the receivers of the services rendered by the Company.
b) According to the records of the Company, as at 30th September, 2012 the following
are the particulars of disputed dues on account of various matters which have not been
deposited:
| Name of the Statute |
Nature of demand |
Amount (Rs. in Lacs) |
Period to which the amount relates |
Forum where dispute is pending |
| Tamil Nadu General Sales Tax Act, 1959 |
Commercial Tax |
832.84 |
2007-2008 |
Madras High Court |
x. The Company does not have any accumulated losses. The Company has not incurred any
cash losses during the financial year covered by our audit and in the immediately
preceding financial year.
xi. The Company is in arrears in the repayment of its dues to various Banks/Financial
Institutions. An amount of Rs.10,997 Lacs on account of Principal and Rs.1,834.30 Lacs on
account of Interest aggregating to Rs.12,831.30 Lacs are overdue to various
Banks/Financial Institutions as on 30th September, 2012. Subsequent to the date of the
Balance Sheet, the Company has paid an aggregate amount of Rs.5,823.10 Lacs.
xii. In our opinion and according to the information and explanations given by the
Management, the Company has not granted any loans and advances on the basis of security by
way of pledge of shares, debentures or any other securities.
xiii. In our opinion the Company is not a chit fund or a nidhi/ mutual benefit fund/
society. Therefore, the provisions of Clause 4(xiii) of the Order are not applicable.
xiv. In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and any other investments. Therefore, the provisions of Clause 4(xiv) of the
Order are not applicable.
xv. In our opinion and according to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans taken by others from
banks are not prima facie prejudicial to the interest of the Company.
xvi. On the basis of the records examined by us, and relying on the information
compiled by the Company for co-relating the funds raised to the end-use of term loans, we
state that the Company has, prima facie, applied the term loans for the purpose for which
they were obtained.
xvii. According to the information and explanations given to us and on an overall
examination of the financial statements and after placing reliance on the reasonable
assumptions made by the Company for classification of Short-term and Long-term usage of
the funds, we are of the opinion that, prima facie, no funds raised on short-term basis
have been utilized for long-term investment.
xviii. According to the information and explanations given to us, the Company has not
made any preferential allotment of shares to parties or Companies covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly paragraph 4(xviii) of
the Order is not applicable.
xix. According to the information and explanations given to us, the Company has not
issued any debentures during the year. Accordingly paragraph 4(xix) of the Order is not
applicable.
xx. The Company has not raised any money by public issues during the year. Accordingly
paragraph 4(xx) of the Order is not applicable.
xxi. Based upon the audit procedures performed and information and explanations given
by the Management, we report that no fraud on or by the Company has been noticed or
reported during the year.
|
For SORAB S. ENGINEER & CO. |
|
Chartered Accountants |
|
Firm Registration Number : 110417W |
|
CA M.P. ANTIA |
|
Partner |
| Mumbai: 29th November, 2012. |
Membership No. 7825 |
+91-9892691696
