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HARYANA SHEET GLASS LIMITED
ANNUAL REPORT 2004-2005
AUDITORS' REPORT
TO
THE MEMBERS OF
HARYANA SHEET GLASS LIMITED
1. We have audited the attached Balance Sheet of HARYANA SHEET GLASS
LIMITED as at 31st March, 2005, the Profit and Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of subsection (4A) of Section 227
of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Attention is invited to.:
a) Note No. 5 regarding Non confirmation of balances of loans, debtors,
loans & advances and current liabilities, impact whereof presently cannot
be commented.
b) Note No.8 non-ascertainment of gratuity liability for the reasons stated
therein and their consequential effect on loss for the year.
c) Note.9 Having regard to the position stated in the said Note, the
Financial Statements have been prepared on the basis that the Company is a
'Going Concern' although its accumulated losses exceed aggregate of its
paid up capital and reserves.
d) Note No. 10 regarding non-provision of interest on term loan for Rs.9846
lacs.
e) Note No.11(b) regarding non-provision for interest (amount
unascertained) on overdue liability of Small Scale Industrial Undertaking.
f) Note No.12 regarding advance of Rs.1 crore which is doubtful of recovery
and their consequential effect on loss for the year.
g) Note No. 14 regarding non provision for Excise duty liability (amount
unascertainable) as stated in the said note.
h) That the freight paid for Rs.239.22 lacs on raw materials have been
deducted from the transport charges recovered during the year and as such
the consumption of Raw materials has been lesser shown by the said amount.
We further report that the loss for the year, balance in profit & loss
account, assets and liabilities are without considering the impact of the
items in para (a), (b), (e) & (g) above. Had the observations made in para
(d) & (f) been considered, loss would have been higher by Rs.9946 lacs,
secured loans by Rs.9846 Lacs and lower loans and advances by Rs.100 lacs.
5. Further to our comments in the Annexure referred to in paragraph 3 above
and subject to matters referred in paragraph 4 above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956;
(v) As per information and explanations given to us, we report that none of
the directors of the Company are disqualified from being appointed as a
director of the Company u/s 274(1)(g) of the Companies Act, 1956 except
Mrs. T.R. Parikh in view of non-submission of the declaration/certificate.
(vi) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes give `.he information
required by the Companies Act, 1956, in the manner so required and give a
true and fair view in conformity with the accounting principles generally
accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2005;
(b) In the case of the Profit and Loss Account, of the Loss for the year
ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash Flows for the year
ended on that date.
For P.K. MAHESHWARI & CO.
Chartered Accountants
(P.K. MAHESHWARI)
Place : New Delhi Partner
Date : December 3, 2005 Membership No. 7850
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF HARYANA SHEET GLASS LIMITED ON THE ACCOUNTS AS AT AND FOR THE
YEAR ENDED 31st MARCH, 2005.
1. The Company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed assets
except Neemrana Unit.
2. As explained to us, most of the fixed assets, except at Neemrana Unit,
have been physically verified by the management during the year and as
informed to us, no material discrepancies were noticed on such verification
as compared to book records.
3. As per information and explanations given by the management during the
year, the Company has not disposed off a major part of fixed assets during
the year.
4. The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
5. The procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and nature of its business.
6. The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and the
book records were not material.
7. In respect of loans secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956:
a) The Company has taken not granted any loans, secured or unsecured to
companies, firms or other patties covered in the register maintained under
Section 301 of the Companies Act, 1956.
b) Since the Company has not granted any loans, the Clause (b), (c), (d)
relating to the rate of interest, receipt of Principal amount, overdue
amount does not apply.
c) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
d) Since the Company has not taken any loans, the Clause relating to the
rate of interest, payment of Principal amount, overdue amount does not
apply.
8. In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to purchase
of inventory, fixed assets and with regard to sale of goods. During the
course of our audit, no major weakness has been noticed in internal
controls.
9. According to the information and explanations given to us, we are of the
opinion that the transactions made in pursuance of contracts or
arrangements that need to be entered in the Register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
10. In our opinion and according to the information and explanations given
to us, the transaction made in pursuance of contracts of arrangements
entered in the register maintained under Section 301 of the Companies Act,
1956 and exceeding the value of Rupees five lakhs in respect of concerned
parties during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
11. In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposit from the public, except
trade deposit from its customers, within the meaning of Sections 58A & 58AA
of the Companies Act, 1956 and the rules framed there under.
12. In our opinion, the Company has an internal audit system commensurate
to the size and nature of its business except at Neemrana Unit where no
internal audit has been carried out during the year.
13. The Central Govt. has not prescribed maintenance of the cost records by
the Company under Section 209(1)(d) of the Companies Act, 1956, therefore
the provision of clause 4(viii) of the Companies (Auditor's Report) Order,
2003 is not applicable to the Company.
14. According to the records and information and explanations given to us,
the Company has not been regular in depositing undisputed statutory dues
including Provident Fund, Employees` State Insurance, Sales Tax, Entry Tax,
Income Tax, Excise Duty and Rates & Taxes with the appropriate authorities
and there are undisputed statutory dues payable for a period of more than
six months from the date they became payable as at 31st March, 2005 are
given below.
Nature of dues Amount (Rs.)
Provident Fund 18912439/-
ESI 2765817/-
Entry Tax 6775952/-
Rates & Taxes 1598330/-
However it is to be read with Note No. 13.
15. According to the information anal explanations given to us and the
records of the company examined by us, the particulars of dues of sales-
tax, income-tax, customs duty & cess as at 31st March, 2005 which have not
been deposited (net of deposit) on account of dispute, are as follows:
Name of the Nature of the Forum where Amount
Statute Dues dispute is Pending (Rs. in Lacs)
Income Tax Act, 1961 Income Tax ITAT 33.55
Sales Tax Act Sales tax Dy. Commissioner 73.69
Tribunal 8.65
Central Excise Act. Excise Duty Supreme Court 28.35
High Court 446.07
CEGAT 74.57
Commissioner 22,49
Foreign Exchange
Management Act, 1999 Penalty Tribunal 250.00
16. The accumulated losses of the Company are more than fifty percent of
its net worth. The Company has incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
17. As per records made available and according to the information and
explanations given to us, we are of the opinion that the Company had
defaulted in repayment of dues to IFCI as on 31st March, 2005 amounting to
Rs.10456 lacs as per Balance Sheet. Further we have been informed that the
Company has applied to IFCI for One time Settlement (OTS) which is still
pending. We are unable to comment on period/amount of default.
18. According to the information and explanations given to us, the Company
has not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
19. The Company is not a chit fund or a Nidhi/mutual benefit fund/ society.
Therefore, the provision of clause 4(xiii) of the Companies (Auditor's
Report) Order, 2003 (hereafter referred to as the said Order) are not
applicable to the Company.
20. The Company is not dealing in or trading in shares, securities,
debentures & other investments. Accordingly, the provisions of clause (xiv)
of the said Order are not applicable to the Company.
21. According to the information and explanations given to us, the Company
has not given any guarantees for loans taker, by others from banks or
financial institutions.
22. According to the information and explanations given to us, the Company
has not received any term loan during the year.
23. Based on examination of documents and records made available and on the
basis of information and explanations given to us, the Company has not used
funds raised on short basis for long term investments and vice versa.
24. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company was
noticed or reported during the year.
For P.K. MAHESHWARI & CO.
Chartered Accountants
(P.K. MAHESHWARI)
Place : New Delhi Partner
Date : December 3, 2005 Membership No. 7850
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