Shipping Corporation of India Ltd. (31-3-2011)
From Notes to Accounts
The Company being a shipping company, its activities are based both in shore and in floating ships. The Company has implemented three different ERP packages to take care of both shore and the ship-related transactions and they have gone live from 28-2-2011. The accounts for the period 1-4-2010 to 31-1-2011 (i.e., for ten months) are prepared in the legacy system and for the period 1-2-2011 to 31-3-2011 (i.e., for two months) are prepared in the new system. With all efforts, the system has been implemented and the accounts for the 4th quarter and year ending 31-3-2011 are for the first time prepared under the new system.
In addition to the above, supporting documents for income and expenses are not received by the Company from the agents and transactions have been recorded based on the amount of the advance released/data received from the agents for the month of March 2011.
Necessary accounting effects to rectify the migration errors have been carried out by the management wherever the instances have been observed and the exercise is continuing and the necessary rectification will be made appropriately.
Further to the above, the company is unable to make certain adjustment in respect of the following due to issues arising on migration and uploading of data in the new system:
(i) Translation of certain balances as per policy No. 8(c), wherever rectification entries have been passed post revaluation of the balances of the assets and liabilities,
(ii) The segmental results disclosed segment report may consist certain inter-segment compensating issues,
(iii) In some of the assets, depreciation is accounted where instances of classification in inter-assets class is noticed and date of capitalisation is taken based on best available information,
(iv) Certain transactions relating to payments, etc. reflected in the bank reconciliation statements could not be incorporated,
(v) During the current year aggregate Net Credit balance of Rs.25375.49 lakhs in vendor and accounts payable are shown as Sundry creditors and other liabilities, which up to previous year were disclosed vendor-wise debit and credit separately,
(vi) The foreign currency revaluation effects of various assets and liabilities are included in the debtors, instead of grouping the same with the respective assets and liabilities,
(vii) The second phase of audit by the Comptroller & Auditor General of India, has not been completed due to limitation of time.
The impact of items stated in para (i) to (iv) is not material on the result of the Company. Further the matters stated in para (iv) to (vi) relates to assets and liabilities and grouping thereof under the various heads of the Balance sheet.
From Auditors’ Report
(f) Attention is invited on:
Note. No. 1, Schedule-25 Notes on Accounts, regarding various errors and omissions have been made by the Company during the process of migration/uploading of data post migration in the new accounting software ERP-SAP, in respect of accounting of the income and expenses, assets and liabilities for which necessary rectification has been carried out by the Company.
Further there remain certain items where the company is unable to make appropriate adjustments and the effects of errors and adjustments, if any, as might have been determined to be necessary in the data migrated/uploaded in the accounting software post migration.
It has been further noticed that the Company has:
(i) Not accounted the income and expenditure in respect of unfinished voyages as per accounting policy No. 2(c), having no impact on the profit for the year.
(ii) Non-accounting of foreign currency transactions at the rates as stipulated in accounting policy No. 8(a) for the months of January 2011 and February 2011, instead the same have been accounted at the exchange rates applicable for the month of March 2011.71
(g) Note No. 17 of Schedule-25 ‘Notes to the Accounts’ in respect of balances of Sundry Creditors, Debtors, Loans & Advances and Deposit which are subject to confirmation.
In our opinion and to the best of our information and according to the explanations given to us, subject to our comments in para 4(f) above, the said accounts.
