To The Members of Sancia Global Infraprojects Limited Kolkata
Report on the Financial Statements
We have audited the accompanying financial statements of M/s Sancia GlobalInfraprojects Limited (hereinafter referred to as "the Company") comprising ofthe Balance Sheet as at 31st March 2016 the Statement of Profit and Loss and the CashFlow Statement for the year then ended and a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "the financialstatements").
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the preparation of these financialstatements in terms of the requirements of the Companies Act 2013 (hereinafter referredto as "the Act") that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. TheBoard of Directors of the companies are responsible for maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; the selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error which have been used for the purpose ofpreparation of the financial statements by the Directors of the Company as aforesaid.
Our responsibility is to express an opinion on these financial statements based on ouraudit. While conducting the audit we have taken into account the provisions of the Actthe accounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing an opinionon whether the Company has an adequate internal financial controls system over financialreporting in place and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors aswell as evaluating the overall presentation of the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India; a) In the case of the Balance Sheet of the stateof affairs of the Company as at March 31 2016; b) In the case of the Statement of Profitand Loss of the loss for the year ended on that date; and c) In the case of the Cash FlowStatement of the cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements: a)Note 21.14 to the financial statements which describes the uncertainty related to theoutcome of the winding up petition filed against the Company by M/s Suryoday Allo MetalPowders Limited during the FY. 2013-14.
b) Note 21.4 in the financial statement indicates that the Company has accumulatedlosses and its Net worth has been fully eroded the Company has incurred Net Loss of Rs.3.13 Crore during the current financial year (Previous Year Rs. 4.14 Crore) and net cashprofit during the current year of Rs. 0.57 Crore (Previous year Loss Rs. 0.39 Crore) alsothe Company current liabilities exceeded its current assets as at the balance sheet date.These conditions along with other matters set forth in Note : 21.14 indicate theexistence of a material uncertainty that cast significant doubt about the Company'sability to continue as a going concern. However the financial statements of the Companyhave been prepared on a going concern basis for the reasons stated in the Note No. 21.15
Our opinion is not modified in respect of these matters.
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 of the Act based onthe comments in the auditors' reports of the Company we give in the Annexure 1 astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
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 exceptinformation and explanations read with auditors' report for the year ended 31.03.2010;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) The going concern matter described in sub-paragraph under the Emphasis of Mattersparagraph above in our opinion may have an adverse effect on the functioning of theCompany.
f) On the basis of written representations received from the directors as on 31 March2016 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct.
g) With respect to the other matters included in the Auditor's Report and to our bestof our information and according to the explanations given to us we further report that:-
As Stated in Note no. 21.1 regarding FCCB the maturity date of said FCCB was13th day of February 2014. However the company failed to repay/redeem the same on due datealong with interest installments which is due since 12th August 2013 onwards.
The wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd becomesstruck-off as per the Final Gazette Notification of ACRA Singapore.
As stated in Note No. 21.6(ii) there was an inquiry operation on 04th day ofJune 2014 conducted by DGCEI Zonal Unit Mumbai to ascertain facts regarding evasion ofthe service tax under Central Excise Act 1944 read with section 83 of the finance act1994. However the company has not made any provision towards liability of service tax forthe period covered under the aforesaid search and seizure.
The Accumulated losses of the Company is Rs. 411.25 Crores (Previous year: LossRs. 408.12 crores) and its net worth is negative Rs.206.27 Crores(Previous period:Negative Rs. 203.14crores) at the end of the reporting period which indicates erosion ofNet worth of the Company. The Company can be termed as"SICK" within the meaningof clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (SpecialProvision) Act 1985. "The Company has made a reference during the financial year2012-13 to the "Board for Industrial & Financial Reconstruction" undersection 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 however the samereference has been declined by BIFR."Considering the same the Company's ability tocontinue as going concern is in doubt and will depend upon any revival programme as statedin the Note No.21.15
As stated in Note No. 21.15 the Company has defaulted in making payments tosecured creditors and also not provided for interest on the banking facilities availedfrom the banks. The secured creditors had declared the account as a Non Performing Asset(NPA) and initiated notice under Section 13(2) as per the SARFAESI Act 2002. Further Bankof India have assigned all the rights title and interest in financial assistance infavour of "Edelweiss Asset Reconstruction Company Limited (EARC)" vide letterNo. EdelARC/3985-2014 dated April 30 2014 received from "Edelweiss AssetReconstruction Company Limited."During the period under review company signed a termsof settlement dated 20th Oct. 2015 with "M/s Edelweiss Assets Reconstruction companyLimited" (Secured Creditor) for settlement of its debt pertaining to EARC Trust-SC19. As per the terms of the settlement the company/ investor shall pay an amount ofRs.18.40 cr. over the period of 2015 to 2022 by roping an investor i.e. M/s InfraconEquipments Private Limited who has executed an Agreement to sale dated 19th Oct. 2015 forpurchase of entire mortgaged assets of the company by paying/discharging the Securedliabilities/secured debt to the secured creditor being "Edelweiss AssetReconstruction Company Limited over the period of time duly mentioned in the terms ofsettlement dated 20th Oct. 2015 As per the Agreement to sale dated 19th Oct. 2015 enteredbetween M/s Sancia Global Infraprojects Limited and M/s Infracon Equipments PrivateLimited it has been agreed that M/s Infracon Equipments Private Limited will be thebeneficial owner of all present and future encumbered or unencumbered tangible assets receivables and advances including earlier advances made to CNPC BOMCO by M/s SanciaGlobal Infraprojects Limited in lieu of settlement/payment to the secured creditor/lenderbeing "M/s Edelweiss Asset Reconstruction Company Limited" and "Bank ofIndia" (the secured creditor/secured lender) considering the lower depreciable valueof the tangible assets of the company.
J & K Bank has initiated legal action for recovery of its outstanding duesagainst the company and its directors as the account with J & K Bank had earlierbecome NPA.
State bank of India has taken over the physical possession of the mortgagedproperty of the company situated at village Rampar Dist. Kutch Gujarat and plot atKalamboli (Maharashtra) under the recovery proceeding as per the SARFAESI Act 2002.
During the F.Y. 2013-14 M/s Suryoday Allo Metal Powders Limited a companyregistered under the companies Act 1956 and having its Registered office at 302 B- WingNarayan Chamber 555 Narayan Peth Pune- 411030 (Maharashtra) filed a legal suit in thecourt at Kolkata for winding-up the company due to defaulting of payment of Rs.10419948/- by M/s Sancia Global Infraprojects Limited.
Company has not made Provision for Interest on Working Capital Facility and TermLoan availed from Bank Bank of India and State Bank of India pursuant to classificationof its account by the concerned Banks and Financial Institution as Non-performing Assets(NPA).
Balances of Loans Sundry Debtors Loans and Advances deposits and CurrentLiabilities are subject to confirmation from the respective parties and reconciliationif any.
|For Arup Das & Associates |
|(Chartered Accountants) |
|Arup Das |
|(Membership No. : 053564) |
|FRN: 318034E |
|Place : Kolkata |
|Date : 13.08.2016 |
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2016 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets subject to the annexure to the AuditorsReport for the period ended on 31.03.2010.
(b) As explained to us all fixed assets have not been physically verified by themanagement during the period but there is a regular programme of verification which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.
(ii) As explained to us company had no inventories except consumables spares duringthe year hence clause (ii) of the order is not applicable to the company.
(iii) In our opinion and according to the information and explanation given to usduring the period under review the company has not granted any loans secured or unsecuredto companies firms or other parties covered in the register maintained under section 189of the Companies Act 2013 ('the Act'). Accordingly Clause 3(iii) (a) (b) and (c) of theorder are not applicable for the year.
(iv) In our opinion and according the information and explanation given to us duringthe period under audit there are no loans guarantees and securities granted in respect ofwhich provisions of section 185 and 186 of the Companies Act 2013 are applicable and hencenot commented upon.
(v) The Company has not accepted any deposits from the public during the year.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of statutory dues were in arrears as at 31 March2016 for a period of more than six months from the date they became payable exceptProfessional tax Sales tax service tax and Income tax.
(b) According to information and explanations given to us some dues of income taxsales tax and service tax have not been deposited by the Company on account of disputes.
(viii) The Accumulated losses of the Company is Rs. 411.25 Crores (Previous year: LossRs. 408.12crores) and its net worth is negative Rs. 206.27 Crores (Previous period:Negative Rs. 203.14 crores) at the end of the reporting period which indicates erosion ofNet worth of the Company. The Company can be termed as"SICK" within the meaningof clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (SpecialProvision) Act 1985.
(ix) The Company is having outstanding dues to financial institutions or banks and fccbholders during the year as mentioned under the Emphasis of Matters & Report on otherLegal and Regulatory Requirements paragraph above.
(x) According to the information and explanation given by the management the companyhas neither raised any monies by way of initial public offer or further public offer andterm loan during the year. Hence reporting under clause (ix) is not applicable.
(xi) According to the information and explanation given by the management we reportthat the managerial remuneration has been paid/provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the companiesAct 2013.
(xii) In our opinion the company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the company and hence not commented upon.
(xiii) In our opinion during the period under review all transactions with the relatedparties are in compliance with section177 and 188 of Companies Act 2013 and the detailshave been disclosed in the Financial Statements as required by the applicable accountingstandards.
(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon
|For Arup Das & Associates |
|(Chartered Accountants) |
|Arup Das |
|(Membership No. : 053564) |
|FRN: 318034E |
|Place : Kolkata |
|Date : 13.08.2016 |