TO THE MEMBERS OF SEN PET (INDIA) LIMITED
(Formerly known as Elque Polyesters Limited)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Sen Pet (India) Limited ("theCompany") which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements 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. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
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 purposes of expressing anopinion on whether the Company has in place an adequate internal financial control systemover financial reporting 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 Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on 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 of the state affairs of the Company as at 31stMarch 2017 and its loss and its cash flows for the year ended on that date.
We draw attention to the following matters in the Notes to the financial statements:
a) Point no 3 at the Notes to the accounts 22 wherein the company has been declared asSick Industry on 13th January 2000 under section 3(1)(o) of the Sick Industrial Company's(Special Provision) Act 1985. With the repletion of the SICA Act 1985 the status of thecompany remains same as it was on or before 13th January 2000.
b) Point no. 4at Notes to the accounts 22 preparation of accounts as a "GoingConcern" concept though the Company has accumulated losses and its net worth has beenfully eroded.
c) Point no 5 at Notes to the accounts 22 regarding interest further interest oninterest and liquidation damages on Term Loans/ Working Capital Loans advanced by variousBanks and Financial Institutions for the current year the quantum of which isunascertainable.
d) Point no. 6 at Notes to the Accounts 22 regarding non-payment of listing fees andnon-provision of listing fees in the profit and loss account.
e) Point no. 7 at Notes to the Accounts 22 regarding non-payment of Lease rent to theDevelopment Commissioner Falta Special Economic Zone since 2009 pending renewal ofLease agreement.
f) Point no. 8atNotes to the Accounts 22 regarding matter pending before Hon'ble HighCourt at Calcutta for exemption on payment of E.S.I.
g) Point no. 9 at Notes to the Accounts 22 the company has not made actuarialValuation for the computation of Gratuity & Leave encashment Liability for the yearand consequently the company has not been able to make provision for gratuity and Leaveencashment liability for the year.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
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 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order.
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 purpose 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 and the Cash Flow Statementdealt with 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 under the emphasis of Matters paragraph abovemay have an adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.
g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in the "Annexure A".
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has not disclosed the impact of pending litigations on its financialstatements - Refer Point no.5at notes on accounts 22 to the financial statements andcontinuous defaulter of interest on loan taken from financial institution in respect ofTerm Loan refer Note no. 3 at schedule to Balance Sheet.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has no requirement of payment to Investor Education and Protection Fund bythe Company.
| ||For Basu Das & Bas |
| ||Firm Registration No.: 311038E |
| ||Chartered Accountants |
| ||Sd/- |
| ||Amal Kumar Das |
|Place: Kolkata ||Partner |
|Date: May 30 2017 ||Membership no : 050109 |
Annexure - A to the Independent Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2017 we report that:
(i) With respect to its Fixed Assets
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(b) Fixed assets have not been physically verified by the management during the year.
(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) With respect of its Inventories:
(a) The inventories have been physically verified during the year by the management;
(b) In our opinion the procedure of physical verification of inventories as followedby the management is reasonable and adequate in relation to the size of the Company andthe nature of its business;
(c) The Company has maintained proper records of inventories. No material discrepancieswere noticed on such physical verification;
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013.
(iv) There are no such loans investments guarantees and security where provisions ofsection 185 and 186 of the Companies Act 2013 have been attracted.
(v) The Company has not accepted any deposits from the public.
(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) The company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax service taxduty of customs duty of excise value added tax cess and other statutory dues to theappropriate authorities during the period under review except Rs 9.64 lacs is outstandingagainst Excise Duty Custom Duty including its Education Cess and Rs 9.90 lacs againstSales Tax. Apart from that no undisputed amount payable in respect of the aforesaidstatutory liability were outstanding as at 31st March 2017 for a period of more than sixmonths from the date they became payable. The matter relating to exemption on payment ofE.S.I. is pending with the Hon'ble High Court at Kolkata. (Vide point no. 6 of Note no.22). Estimated liability as decided by the management is amounting to Rs 38.02 lacs(approximately).
(b) According to the information and explanations given to us details of disputedstatutory dues have not been deposited as on 31st March 2017 on account of disputedmatters pending before appropriate authorities are as under:
|Name of the Statute ||Nature of Due ||Amount (R in Lacs) ||Period for Which the matter relates ||Forum where the dispute is pending |
|The Central Excise Act 1944 ||Excise Duty ||2734.79 ||1996 to 2005 ||With Commissioner of Customs and CESTAT |
|The West Bengal Sales Tax Act 1994 and Central Sales Tax Act 1956 ||Sales Tax ||839.01 ||2001-2003 ||With Hon'ble High Court of Kolkata. |
|The West Bengal Sales Tax Act 1994 and Central Sales Tax Act 1956 ||Sales Tax ||620.00 ||2002-2003 ||Joint Commissioner Commercial Taxes South Circle Kolkata. |
|The West Bengal Sales Tax Act 1994 and Central Sales Tax Act 1956 ||Sales Tax ||939.61 ||2003-2004 ||Joint Commissioner Commercial Taxes South Circle Kolkata. |
|The West Bengal Sales Tax Act 1994 and Central Sales Tax Act 1956 ||Sales Tax ||18.63 ||2004-2005 ||West Bengal Commercial Taxes Appellate & Revisional Board. |
|VAT Act 2003 & CST Act 1956 ||Sales Tax ||58.80 ||2005-2006 ||West Bengal Commercial Taxes Appellate & Revisional Board. |
|VAT Act 2003 & CST Act 1956 ||Sales Tax ||65.76 ||2009-2010 ||West Bengal Commercial Taxes Appellate & Revisional Board. |
|VAT Act 2003 & CST Act 1956 ||Sales Tax ||7.47 ||2010-2011 ||West Bengal Commercial Taxes Appellate & Revisional Board. |
(viii) The company has made defaults in the repayment of dues to the financialinstitutions and banks during the year under review the amount and period of default isnot ascertainable at this stage.
(ix) The Company did not raise any money during the year by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable.
(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) During the year the company has not paid any managerial remuneration to hisdirectors so the question of approvals mandated by the provisions of section 197 read withSchedule V to the Companies Act does not arise.
(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 applicableaccounting 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.
(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.
Annexure - B to the 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 over financial reporting of Senpet(India) Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on
Auditing 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 over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement 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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies 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 over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For Basu Das & Bas |
| ||Firm Registration No.: 311038E |
| ||Chartered Accountants |
| ||Sd/- |
| ||Amal Kumar Das |
|Place: Kolkata ||Partner |
|Date: May 30 2017 ||Membership no : 050109 |