Corporate Information Shreyas Shipping and Logistics Limited (SSLL) is India's first container feeder owning and operating company. SSLL started its operations in 1993 primarily to fill the gap for feedering of containers between Indian ports and internationally renowned Asian transshipment ports. SSLL's shares are listed on both Bombay Stock Exchange and National Stock Exchange. At brsent, it is a leading player in coastal shipping sector. Summary of significant accounting policies Basis of Preparation & Use of Estimates The Financial Statements have been brpared under the historical cost convention on accrual and going concern basis. The Financial Statement have been brpared in accordance with the generally accepted accounting principles in India, to comply with the Accounting Standards specified under section 133 of The Companies Act, 2013 and the relevant provisions of the Companies Act, 2013. The brparation of financial statements requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including contingent liabilities) as of the date of financial statements and the reported income and expenses during the reporting period. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Fixed Assets - Tangible & Intangible Fixed Assets are stated at cost of acquisition less accumulated debrciation. Cost of acquisition is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Expenses specifically attributable to construction of new built ship including forex loss/gain on forward covers taken for the purpose of payment of installments to the ship-builder are capitalised. When assets are retired or otherwise disposed off, the cost of such assets and the related accumulated debrciation are removed from the accounts. Any profit or loss on retirement or other disposal is reflected in the statement of Profit and Loss. b. Dry Dock/Special Survey expenses Dry Dock/ Special Survey Expenses are normally incurred twice in a period of 5 years. With effect from April,15 this is capitalised as a separate component of ships as required by Note 4(a) & (b) of Schedule II of Companies Act, 2013. Material procured for dry dock and remaining unutilised,if any, are included in Capital work in Progress. c.Debrciation Tangible assets Debrciation for the year has been provided on the basis of useful lives and residual value as brscribed in Schedule II; except in the case of certain assets stated below, where based on past experience and technical justification, the Company has adopted useful lives or residual values other than those brscribed in Schedule Debrciation has been provided prospectively, where the cost of debrciable asset has undergone change due to following : (a) Increase/decrease in Long term foreign currency liability on account of exchange fluctuations (b) Additions and major improvements forming an integral part of an asset. Assets individually costing Rs 5000 or less are debrciated in full in the year of acquisition. d. Revenue Recognition i) All Income and expenditure are accounted for, on accrual basis other than interest on overdue bills. ii) Operating Earnings rebrsent the value of charter hire and freight earnings. Freight income is recognised based on percentage of completion considering voyage days as the basis. iii) Income and Expenses relating to unfinished leg of the voyage as at the date of Balance Sheet are carried forward and included under Current Liabilities and Current Assets respectively. Expenses aggregated under unfinished leg of voyages include fixed and semi-fixed ship operating costs. iv) Stores and Spares (other than lube oils and victualling) are charged off to Statement of Profit and Loss, on receipt. v) The revenue in respect of the duty free import licenses, under Served From India Scheme, is recognized as income in the books of account when and to the extent there is no significant uncertainty as to their ultimate realization. vi) Interest on deposits of surplus funds is recognised on time proportion basis. e. Investments Long term Investments are stated at cost. Diminution in the value of investments, other than temporary in nature, is provided for. Current investments are valued at cost or fair value whichever is lower. f. Inventories Inventories are valued at lower of Cost or Net Realisable Value. The cost is determined under "First in First out" formula. g. Foreign Exchange Transactions i) Transactions in foreign currencies are recorded at standard exchange rates brvailing on the date of relevant transactions. The realized exchange gains or losses are recognized in the statement of Profit and Loss. ii) The exchange differences arising on reporting of long term foreign currency monetary items (including those arising on settlement), in so far as they relate to acquisition of debrciable capital assets are adjusted to the cost of the capital asset, with effect from 1st April 2007, in terms of Ministry of Corporate affairs Notification dated 31st March,2009 relating to Accounting Standard 11 'The Effect of Changes in Foreign Exchange Rates'. Applicability of the above notification has been extended upto March 2020. iii) Other Monetary Assets and Liabilities denominated in foreign currency are translated at the year end exchange rates. The resultant gain or loss on such translation is recognised in the statement of Profit and Loss iv) In respect of forward exchange contracts covering either Company's earnings or payments (other than firm commitments and highly probable forecast transactions), the brmium or discount arising at the inception of the contract is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period. In case of a new built ship, in respect of forward exchange contract entered into to hedge the foreign currency risk of a firm commitment or highly probable forecast transaction (not covered by Accounting Standard 11 revised 2003), the company capitalises all the related costs including brmium or discount, exchange difference and profit/loss on cancellation of such contracts, if any. h. Derivatives Derivatives are accounted as follows based on a limited early adoption of AS-30 to the extent not in conflict with legal provisions and other Accounting Standards: a) Fair value hedges are marked to market and the notional Loss or Gain is accounted in the statement of Profit and Loss. b) Cash flow hedges are marked to market and the notional loss or gain is taken to Hedging reserve account. c) Other derivatives are marked to market and the notional losses or gains are booked in the statement of Profit and Loss. d) Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. i. Employee Benefits The Company has a defined Contribution plan for shore employees for provident fund and contributions made to the relevant authorities under this scheme are charged to the statement of Profit and Loss. Company has no other obligation except the monthly contributions. Company has defined benefit plans for shore employees namely gratuity, leave encashment and compensated absence, the liability for which is provided based on actuarial valuation determined under Projected Unit Credit method. Contributions under gratuity scheme are made to Life Insurance Corporation of India (LIC) in accordance with the terms of the policy taken under their Group Gratuity Scheme. Actuarial gains / losses comprise experience adjustments and the effect of changes in actuarial assumptions are recognised immediately in statement of Profit and Loss as Income / Expense. Any other termination benefits are recognised as expenses immediately on the basis of actual expenses. In respect of Floating staff, Provident fund and Gratuity contributions are made to Seamen's Provident Fund and Seafarers Welfare Fund Society respectively. No Gratuity is payable in respect of officers on board who are on contract with the Company. Company has no further obligation except the monthly contributions. j. Borrowing Costs Borrowing costs that are directly attributable to the acquisition / construction of the underlying qualifying fixed assets are capitalised as a part of the respective asset up to the date of acquisition /completion of construction. Term loan processing charges are accounted over the tenure of loan. 3. SHARE CAPITAL k. Leases Assets acquired on lease where a significant portion of the risk and rewards of the ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to revenue. l. Taxation The Company has opted for Tonnage Tax and current tax is the aggregate of Tonnage Tax for shipping income and income tax on non-shipping income, if any. In view of Company opting for Tonnage Tax, no provision is made for deferred tax. m. Asset Impairment The company reviews the carrying values of tangible and intangible assets for any possible impairment at each Balance Sheet date. Impairment loss, if any, is recognised in the year in which impairment takes place. n. Provisions and Contingent liabilities Provisions are recognised when there is a brsent obligation as a result of past events where it is probable that there will be outflow of resource required to settle the obligation and when a reliable estimate of the amount of the obligation can be made. When any such brsent obligation can not be measured or where a realistic estimate of the obligation can not be made, contingent liabilities are recognised. Contingent liabilities are also recognised when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more future events not wholly within the control of the company. 3b. Terms/rights attached to Equity Shares The Company has only one class of equity shares having a par value of Rs.10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company, after distribution of all brferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. 3d. The Board, in its meeting on May 26th, 2016 proposed a dividend of Rs.1.30/-per equity share (brvious year interim dividend Rs 0.70/- per equity share and final dividend Rs. 1.30/- per equity share). The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting . The total dividend appropriation for the year ended March 31st, 2016 amounted to Rs. 343.56 Lacs (brvious year -Rs. 521.61 lacs) including corporate dividend tax of Rs.58.11 lacs (brvious year - Rs. 82.46 lacs). 3e. No bonus shares have been issued during the last five years. 3f. Shares held by the holding company including shares held by subsidiaries or associates of the holding company is 1,23,51,650 (brvious year: 1,23,51,650) 3g. No shares have been reserved for issue under options and contracts/ commitments for sale of shares/ disinvestments. 3h. No shares have been bought back during the last 5 years. 2. EMPLOYEE BENEFITS (A) Gratuity (a) Description of the Gratuity Plan: The Company provides for gratuity a defined benefit retirement plan covering eligible employees. Gratuity plan provides for a lump sum payment to employees on retirement, death, incapacitation, termination of employment, of amounts that are based on salaries and tenure of the employees c) Segment Capital Employed Fixed Assets used in the company's business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to individual segment assets and liabilities has been made. However Debrciation has been allocated amongst segments based on best estimates of usage of fixed assets in the respective segments during the year. 3 Related Party Transactions (Refer Annexure 1) 3.1 Accounting for Lease The Company has taken Vehicles on Cancellable Operating Lease and the lease rental of Rs.14,34,000 (Rs.13,44,000) is charged to the statement of Profit and Loss. The Company has taken Office Premises on Cancellable Operating Lease and the lease rental of Rs. 56,98,599 (Rs. 57,23,742) is charged to the statement of Profit and Loss. 4 Change in Accounting Policy: 1) As required by Note 4(a) of Schedule II and the Guidance Note on Accounting for Debrciation in Companies in the Context of Schedule II to the Companies Act, the Company has treated 'Dry Dock and Special Survey expenditure' as a Separate Component of fleet to be debrciated over the useful life as against the practice of charging off to statement of profit and loss on occurrence. Had the earlier practice been followed: a) Dry Dock expenses would have been higher by Rs 679.94 Lacs b) Debrciation would have been lower by Rs 161.59 Lacs c) Fixed Assets would have been lower by Rs 518.35 Lacs & d) Profit for the year would have been lower by Rs 518.35 Lacs 2) The Freight income was earlier recognized on completion of the voyage leg. To fall in line with the requirements of IND-AS, which becomes applicable to this Company with effect from 1st April 2017, the Company has changed its Accounting policy in this regard to recognise revenue based on percentage of completion considering voyage days as the basis. In view of this the Revenue for the year is more by Rs 246.77 Lacs, expenses for the year are more by Rs 117.50 Lacs and Profit for the year is higher by Rs 129.27 Lacs (with consequential effect on unfinished voyage Income & expense in current liabilities & current assets) 5 Prior period comparatives Prior year figures have been reclassified / regrouped wherever necessary to conform to the current year's classification. As per our report of even date FOR PKF SRIDHAR & SANTHANAM LLP Chartered Accountants Firm Regn No. 003990S/S 200018 S. Ramakrishnan Partner Membership No. 18967 FOR AND ON BEHALF OF THE BOARD S. Ramakrishnan Chairman & Managing Director (DIN: 00057637) Amitabha Ghosh Director (DIN: 00055962) V. Ramnarayan Executive Director (DIN: 00057717) Rajesh Desai Chief Financial Officer Namrata Malushte Company Secretary Place : Mumbai Date : May 26, 2016 |