To the Members of
SANCIA GLOBAL INFRAPROJECTS LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of Sancia
Global Infraprojects Limited ("the Company"), which comprise the Balance
Sheet as at 31st March, 2019, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity
for the year then ended, and a summary of significant accounting policies and other
explanatory information (herein after referred to as "Standalone Ind AS Financial
Statements").
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation
and presentation of theseStandalone Ind AS Financial Statements that give a true and fair
view of the financial position, financial performance including other comprehensive
income, cash flows and changes in equity of the Company in accordance with the accounting
principles generally accepted in India, including the applicable Indian Accounting
Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the Standalone Ind
AS Financial Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS Financial
Statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the Standalone Ind AS Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the Standalone Ind AS Financial Statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the Standalone Ind AS Financial Statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the Standalone Ind AS Financial Statements that
give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Companys
Directors, as well as evaluating the overall presentation of the Standalone Ind AS
Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Standalone Ind AS Financial Statements give the information
required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India including the Ind AS, of the
financial position of the Company as at 31st March, 2019 and its financial performance
including other comprehensive income, its cash flows and the changes in equity for the
year ended on that date.
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 sub-Section (11) of Section 143 of
the Act, we give in "Annexure A" statement on the matters specified in the
paragraph 3 and 4 of 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 best
of 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 the
Company so far as it appears from our examination of those books;
c) the Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flows and
the Statement of Changes in Equity dealt with by this Report are in agreement with the
books of account;
d) in our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the
Accounting Standards specified under Section 133 of the Act, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended;
e) on the basis of the written representations received from the directors as on 31st
March, 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2019 from being appointed as a director in terms of Section
164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in Annexure B";
g) with respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us, we
report that :-
Basis for Qualified Opinion
i) Financial statement indicates, that the accumulated losses of the Company is Rs.
422.23Crores (Previous year: Loss Rs. 402.08 cr.) and its net worth is negative Rs.217.25
Cr. (Previous period: Negative Rs. 197.10cr.) at the end of the reporting period which
indicates erosion of Net worth of the Company. The Company can be termed as
"SICK" within the meaning of clause (O) of sub section (1) of section 3 of the
Sick Industrial Companies (Special Provision) Act, 1985. However, the financial statements
of the Company have been prepared on a going concern basis considering the rich experience
of the company in the concern sector.
ii) The company has defaulted on payment of dues to banks &financial Institutions.
As stated in Note-31 the company has also defaulted to redeem the FCCB along with
interest.
iii) Presently M/s Infracon Resources & Development Private Limited is the
beneficial owner of all the present and future encumbered or unencumbered tangible assets,
receivables and advances of M/s Sancia Global Infraprojects Limited in lieu of
settlement/payment to the secured creditor/lender being "M/s Edelweiss Asset
Reconstruction Company Limited" and "Bank of India" (the secured
creditor/secured lender) considering the lower depreciable value of the tangible assets of
the company.
iv) The high court at Kolkata issued the order of liquidation of the company against
certain claim of a creditor.
v) Short term Loans & Advances includes advances given to suppliers which are
outstanding for more than one year. Relevant documents and confirmations of balances are
yet to be obtained.
For SARP & ASSOCIATES
Chartered Accountants
FRN: 007375C
Sd/-
Shailesh Agarwal
Partner
Membership No. 063220
Place: Kolkata
Date: 30 May 2019
Annexure "A" to the Independent Auditors Report
(Referred to in Paragraph 1 of our Report of even date)
The Annexure referred to in our Independent Auditors Report to the members of the
Company on the Standalone Ind AS Financial Statements for the year ended 31st March, 2019,
we report that:
1. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets subject to the annexure to the Auditors
Report for the period ended on 31.03.2010.
(b) As explained to us, fixed assets, according to the practice of the Company, are
physically verified by the management at reasonable intervals, in a phased verification
programme, which, in our opinion, is reasonable, looking to the size of the Company and
the nature of its business.
2. As explained to us, company had no inventories except consumables spares during the
year hence clause (ii) of the order is not applicable to the company.
3. In our opinion and according to the information and explanation given to us during
the period under review the company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained under section 189 of
the Companies Act, 2013 (the Act). Accordingly, Clause 3(iii) (a), (b) and (c) of the
order are not applicable for the year.
4. In our opinion and according the information and explanation given to us, there are
no loans, guarantees and securities granted in respect of which provisions of section 185
and 186 of the Companies Act 2013 are applicable and hence not commented upon.
5. The Company has not accepted any deposits from the public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other
relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with
regard to the deposits accepted from the public are not applicable.
6. The Central Government has not prescribed the maintenance of cost records for the
company under section 148(1) of the Act, 2013.
7. (a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company in respect of undisputed statutory dues
including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs,
value added tax, cess and other material statutory dues have been regularly deposited
during the year by the Company with the appropriate authorities. According to the
information and explanations given to us, no undisputed amounts payable in respect of
statutory dues were in arrears as at 31 March 2019 for a period of more than six months
from the date they became payable except Professional tax, Sales tax, service tax and
Income tax due to dispute.The liability of service tax including interest and penalty
outstanding is Rs.72.49 Cr. and the liability of the income tax outstanding as shown on
the official website of Income tax is Rs. 3.63 Lacs however the said demands are under
appeal with the relevant appellate authorities.
8. The Company is having outstanding dues to financial institutions or banks and FCCB
holders during the year as mentioned under the Report on other Legal and Regulatory
Requirements paragraph above.
9. According to the information and explanation given by the management, the company
has not raised any monies by way of initial public offer or further public offer and term
loan during the period under audit. Hence reporting under clause (ix) is not applicable.
10. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practice in India, and
according to the information and explanation given to us, we have neither come across any
instance of material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the year, nor have we been informed of any such case by the
management.
11. According to the information and explanations given to us and on the basis of our
examination of the records of the Company, managerial remuneration if any has been paid or
provided in accordance with the requisite approvals mandated by the provisions of Section
197 read with Schedule V of the Act.
12. In our opinion, the Company is not a nidhi Company. Accordingly the provisions of
Clauses 3 (xii) of the Order are not applicable.
13. As per information and explanation given to us and on the basis of our examination
of the records of the Company, during the period under review the transactions if any with
related parties are in compliance with Section177 and 188 of Companies Act 2013 and all
the details have been disclosed in Standalone Ind AS Financial Statements as required by
the applicable Accounting Standards.
14. According to the information and explanations given to us and on the basis of our
examination of the records, the Company has not made any preferential allotment or private
placement or not issued any debenture during the year under review. Accordingly the
provisions of paragraph 3(xiv) of the Order are not applicable.
15. According to the information and explanations given to us and on the basis of our
examination of the records, the Company has not entered into any non-cash transactions
with any director or any person connected with him. Accordingly the provisions of Clauses
3(xv) of the Order are not applicable to the Company.
16. In our opinion, the Company is not required to be registered under Section 45 IA of
the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3(xvi) of
the Order are not applicable.
For SARP & ASSOCIATES
Chartered Accountants
FRN: 007375C
Sd/-
Shailesh Agarwal
Partner
Membership No. 063220
Place: Kolkata
Date: 30 May 2019
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2 (f) of our Report of even date)
Report on the Internal Financial Controls under Clause i of sub-section 3 of Section
143 of the Companies Act, 2013 (the Act).
We have audited the internal financial controls over financial reporting of the Company
as of 31st March, 2019 in conjunction with our audit of the Standalone Ind AS Financial
Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with 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 the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the Standalone Ind AS Financial Statements, whether due to fraud
or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that:
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and
(2) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March, 2019, based on the
internal control over financial reporting criteriaestablished by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For SARP & ASSOCIATES
Chartered Accountants
FRN: 007375C
Sd/-
Shailesh Agarwal
Partner
Membership No. 063220
Place: Kolkata
Date: 30 May 2019
+91-9892691696
