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Skipper Ltd.

BSE: 538562 Sector: Engineering
NSE: SKIPPER ISIN Code: INE439E01022
BSE 00:00 | 24 Apr Skipper Ltd
NSE 05:30 | 01 Jan Skipper Ltd
OPEN 25.40
PREVIOUS CLOSE 25.50
VOLUME 1568
52-Week high 71.85
52-Week low 17.55
P/E 7.95
Mkt Cap.(Rs cr) 253
Buy Price 24.45
Buy Qty 25.00
Sell Price 25.00
Sell Qty 4.00
OPEN 25.40
CLOSE 25.50
VOLUME 1568
52-Week high 71.85
52-Week low 17.55
P/E 7.95
Mkt Cap.(Rs cr) 253
Buy Price 24.45
Buy Qty 25.00
Sell Price 25.00
Sell Qty 4.00

Skipper Ltd. (SKIPPER) - Auditors Report

Company auditors report

To

The Members of

Skipper Limited

Independent Auditors' Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Skipper Limited("the Company") which comprise the balance sheet as at 31st March 2019thestatement of profit and loss(including the statement of other comprehensive income) thecash flow statement and the statement of changes in equity for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "theStandalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the Standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditors'Responsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the 'Code of Ethics' issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.

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 financial yearended 31st March 2019. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

The key audit matter How the matter was addressed in our audit
1. Accuracy and completeness of revenue recognized. We addressed the Key Audit Matter as follows :-
The Company has adopted Ind AS 115 'Revenue from contract with customer' effective 1st April 2018. 1. As part of our audit we understood the Company's policies and processes control mechanisms and methods in relation to the revenue recognition and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures.
The Company reported revenue of र18708.69 million from sale of tower pole Polymers product and EPC contract and related activities. The application of revenue recognition accounting standards is complex and involves a number of key judgments and estimates. 2. Review the company's judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time.
3. Tested a sample of sales transactions for compliance with the Company's accounting principles to assess the completeness and accuracy of revenue recorded.
In EPC contract revenue is accounted for under the percentage completion method which also requires significant judgments and estimates in particular with respect to estimation the cost to complete. 4. We evaluated the management's process to recognize revenue over a period of time total cost estimates status of the projects and re-calculated the arithmetic accuracy of the same.
5. We examined contracts with exceptions including contracts with low or negative margins loss making contracts etc to determine the level of provisioning.
Due to the estimates and judgment and complexity involved in the application of the revenue recognition accounting standards we have considered this matter as a key audit matter. The Company's accounting policies relating to revenue recognition are presented in note 1.10 to the financial statements 6. Our tests of detail focused on transactions occurring within proximity of the year end and obtaining evidence to support the appropriate timing of revenue recognition based on terms and conditions set out in sales contracts and delivery documents. We considered the appropriateness and accuracy of any cut-off adjustments.
7. Traced disclosure information to accounting records and other supporting documentation.
Our Observation:
Based on the audit procedures performed we did not identify any material exceptions in the revenue recognition.
2. Valuation of Inventories. We addressed the Key Audit Matter as follows :-
Refer to note 6 to the standalone financial statements. The Company is having the Inventories of र 5347.50 million as on 31st March 2019. As described in the accounting policies in note 1.2 to the standalone financial statements inventories are carried at the lower of cost and net realisable value. We obtained assurance over the appropriateness of the management's assumptions applied in calculating the value of the inventories and related provisions by:-
1. Completed a walkthrough of the inventory valuation process and assessed the design and implementation of the key controls addressing the risk.
As a result the management applies judgment in determining the appropriate provisions for obsolete stock based upon a detailed analysis of old inventory net realisable value below cost based upon future plans for sale of inventory. 2. Verifying the effectiveness of key inventory controls operating over inventories; including sample based physical verification.
3. Verifying for a sample of individual products that costs have been correctly recorded.
4. Comparing the net realisable value to the cost price of inventories to check for completeness of the associated provision.
5. Reviewing the historical accuracy of inventory provisioning and the level of inventory write-offs during the year.
6. Recomputing provisions recorded to verify that they are in line with the Company policy.
Our Observation:
Based on the audit procedures performed we did not identify any material exceptions in the Inventory valuation.
3. Contingent Liabilities disclosed with regard to certain legal and tax matter. Reviewing the orders and other communication from the regulatory authorities and management response thereto;
Refer note no 37 37.3 and 37.4 to the standalone financial statements As at 31st March 2019 the Company has disclosed contingent liabilities toward various legal & tax matter. There are many cases related to indirect tax entry tax and other matter. Reviewing management experts legal advice and opinion as applicable as obtained by the management of the Company.
Using our experts for assistance in evaluating certain significant indirect tax matter including entry tax.
This is key audit matter as evaluation of these matters requires management judgments and estimation interpretation of laws and regulation and application of relevant judicial precedent to determine the probability of outflow of economic resources and disclosure as contingent liabilities. Based on the above procedure performed we did not identify any material exceptions in the disclosure of contingent liabilities in the standalone financial statements.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the annualreports but does not include the standalone financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the 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 performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS)specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent ;and the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany'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. Those charged with governance are also responsible foroverseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

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 auditors' 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 financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 auditors' 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 ourauditors' 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 financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the financial statements.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors'report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143 (11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.

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 books.

c) The Balance Sheet the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity dealtwith 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 from time to time.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"

g) In our opinion the managerial remuneration for the year ended 31st March 2019 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act; and

3. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as at 31st March 2019 onits financial position in its standalone financial statements - Refer Note No. 37 to thefinancial 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 the Company.

For Singhi & Co.
Chartered Accountants
Firm's Registration No.302049E
(Pradeep Kumar Singhi)
Place: Kolkata Partner
Date: 22nd May 2019 Membership No. 50773

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under the heading 'Report on Other Legal and RegulatoryRequirements' section of our report of even date in respect to statutory audit of SkipperLimited for the year ended 31st March 2019)

We report that:

i. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As per the information and explanations given to us physical verification of fixedassets have been carried out in terms of the phased program of verification of its fixedassets adopted by the Company and no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tosize of the Company and nature of its business.

c) 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.

ii. As per the information and explanations given to us the inventories have beenphysically verified at reasonable intervals during the year by the management and nomaterial discrepancies between book stock and physical stock have been found.

iii. According to the information and explanations given to us the Company has notgranted any loan to parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly paragraph 3(iii) of the Order is not applicable.

iv. In our opinion and according to the information and explanations given to us theCompany has not given any loan not made any investment and have not provided anyguarantee in respect of which Section 185 and 186 of the Companies Act 2013 areapplicable. Accordingly the paragraph 3(iv) of the Order is not applicable.

v. According to information and explanations given to us the Company has not acceptedany deposits from public within the meaning of section 73 74 7576 of the Act and theRules framed there under to the extent notified.

vi. We have broadly reviewed the books of accounts maintained by Company in respect ofproduct where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under section 148 (1) of the Companies Act2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employee's State InsuranceIncome Tax Customs Duty Goods and Service tax Cess and other statutory dues with theappropriate authorities. According to the information and explanations given to us and therecords of the Company examined by us no undisputed statutory dues as above wereoutstanding as at 31st March 2019 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanation given to us the dues of sales taxduty of excise service tax and value added tax which have not been deposited on accountof any dispute and the forum where the dispute is pending as on 31st March 2019 are asunder :-

Name of the statute Nature of dues Amount H in million Year Forum where dispute is pending
West Bengal Sales Tax Act 1994 West Bengal Sales Tax 24.37 2005-06 & 2006-07 West Bengal Com. Taxes Appellate & Revisional Board
West Bengal Value Added Tax Act 2003 West Bengal Value Added Tax 50.18 2009-10 Additional Commissioner of Commercial Taxes Kolkata
Central Sales Tax Act 1956 Central Sales Tax 14.71 2005-06 2006-07 2013-14 West Bengal Com. Taxes Appellate & Revisional Board
17.24 2015-16 Sr. Joint Commissioner of Commercial Taxes Kolkata
0.98 2006-07 Joint Commissioner of Commercial Taxes Kolkata
The Central Excise Act 1944 duty of Excise 4.60 2005-06 2007-08 2008-09 2010-112012-13 2014-15 2015-16 2017-18 Commissioner (Appeals) - Central Excise Kolkata
51.50 2009-10 2010-112011-12 & 2012-13 Customs Excise & Service Tax Appellate Tribunal Kolkata
Service Tax under Finance Act 1994 Service Tax 33.16 2005-06 2007-08 2009-10 2010-112011-12 & 2012-13 Customs Excise & Service Tax Appellate Tribunal Kolkata
Customs duty Act 1962 Customs duty 24.63 2015-16 Customs Excise & Service Tax Appellate Tribunal Kolkata

viii. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not defaulted in repayment ofloans or borrowings to any financial institution bank or Government. The Company hadneither any outstanding debenture at the beginning of the year nor has it issued anydebenture during the year.

ix. The company did not raise any money by way of initial public offer or furtherpublic offer including debt instruments during the year. However the Company has raisedTerm Loan during the year and has applied the same for the purpose for which term loansare raised.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations 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 and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian Accounting Standards.

xiv. According to the information and explanations give 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 year and hence reporting under clause 3 (xiv) of the Order is not applicable to theCompany.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. The Company is not required to be registered under section 45- IA of the ReserveBank of India Act 1934.

For Singhi & Co.
Chartered Accountants
Firm's Registration No.302049E
(Pradeep Kumar Singhi)
Place: Kolkata Partner
Date: 22nd May 2019 Membership No. 50773

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to standalone financialstatements of SKIPPER LIMITED ("the Company") as of 31st March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tostandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of internal financialcontrol with reference to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors'judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to standalone financial statements includes thosepolicies and procedures 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to standalone financial statements and such internalfinancial controls with reference to standalone financial statements were operatingeffectively as at 31st March 2019 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For Singhi & Co.
Chartered Accountants
Firm's Registration No.302049E
(Pradeep Kumar Singhi)
Place: Kolkata Partner
Date: 22nd May 2019 Membership No. 50773