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Haryana Sheet Glass Ltd.

BSE: 515143 Sector: Industrials
NSE: HARYANSHET ISIN Code: INE038D01016
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Haryana Sheet Glass Ltd. (HARYANSHET) - Auditors Report

Company auditors report

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