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Hindusthan National Glass & Industries Ltd.

BSE: 515145 Sector: Industrials
NSE: HINDNATGLS ISIN Code: INE952A01022
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OPEN 79.25
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VOLUME 121
52-Week high 154.80
52-Week low 77.35
P/E
Mkt Cap.(Rs cr) 741
Buy Price 82.00
Buy Qty 50.00
Sell Price 84.80
Sell Qty 90.00
OPEN 79.25
CLOSE 83.50
VOLUME 121
52-Week high 154.80
52-Week low 77.35
P/E
Mkt Cap.(Rs cr) 741
Buy Price 82.00
Buy Qty 50.00
Sell Price 84.80
Sell Qty 90.00

Hindusthan National Glass & Industries Ltd. (HINDNATGLS) - Auditors Report

Company auditors report

Independent Auditors’ Report

To the Members of

Hindusthan National Glass & Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Hindusthan NationalGlass & Industries Limited ("the Company") which comprise the Balance Sheetas at March 31 2016 the Statement of Profit and Loss Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation in which are incorporated the Returns for the year ended on that date auditedby the branch auditors of the company’s branches at Puducherry Nashik and Rishikesh.

Management’s Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. Th is responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors’ Responsibility

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. Th ose Standards require that we comply wiThethicalrequirements 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 theauditors’ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion.

Basis for Qualified Opinion

As stated in Note no. 2.34.1 of the financial statements due to inadequacy of profitmanagerial remuneration to the extent of Rs. 641.99 Lakhs has become in excess of thelimits laid down in the Companies Act 2013 awaiting Central Government approval. Pendingsuch approvals impact thereof on the Financial Statements is not ascertainable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2016 its Loss and its Cash Flows for the yearended on that date.

Other Matter

We did not audit the financial statements/ information of Puducherry Rishikesh andNashik included in the standalone financial statements of the Company whose financialstatement/ financial information reflect total assets of Rs. 123589 Lakhs as at March31 2016 and total revenues of Rs. 77204 Lakhs for the year ended on that date asconsidered in the standalone financial statements. The financial statements / informationsof these branches have been audited by the branch auditors whose reports have beenfurnished to us and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of these branches is based solely on the Report of such Branchauditors.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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;

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 and proper returns adequatefor the purpose of our audit have been received from branches not visited by us;

c) The report on the accounts of the branch offices of the Company audited undersection 143(8) of the Act by Branch auditors have been sent to us and have been properlydealt with by us in preparing this report.

d) 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 and with the returnsreceived from the branches not visited by us;

e) In our opinion the Balance Sheet Statement of Profit and loss and Cash FlowStatement comply with the Accounting Standards specified under section 133 of the Act;

f) On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the basis for qualified opinion paragraph above;

h) 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 "Annexure B".

i) With respect to the other matters to be included in the Auditors’ 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. Pending litigations (Other than those already recognized in the accounts) havingmaterial impact on the financial position of the Company have been disclosed in thefinancial statement as required in terms of the accounting standards and provisions of theCompanies Act 2013– refer Note no. 2.29.A and 2.29.A.1 of the financial statements;

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For LODHA & CO.
Chartered Accountants
Firm’s ICAI Registration No.:301051E
H. K. Verma
Place : Kolkata Partner
Date : May 27 2016 Membership No: 055104

Annexure to the Independent Auditors’ Report

"Annexure A" to the Auditor’s Report of even date:

i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. All the assets have not been physically verified by the management during the yearbut there is regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. As informed nomaterial discrepancies were noticed on such verifications.

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) The inventory except stock lying with third parties in few of the units and intransit has been physically verified by the management at regular intervals during theyear. In our opinion and according to the information and explanations given to us thefrequency of verification is reasonable. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material to the extent verified.

iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or parties covered in the register maintained under Section189 of the Act. Accordingly clause 3 (iii) of the Order is not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans and investments made.

v) The Company has not accepted any deposits from public covered under Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.

vi) According to the information and explanations given to us the maintenance of costrecords under Section 148(1) of the Act has not been prescribed and as such paragraph3(vi) of the Order is not applicable to the Company.

vii) a. According to the information and explanations given to us during the year theCompany has generally been regular in depositing to the appropriate authorities undisputedstatutory dues including provident fund employees’ state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and otherstatutory dues as applicable to it.

b. According to the information and explanations given to us the details of disputeddues of income tax sales tax service tax duty of customs duty of excise and valueadded tax if any as at March 31 2016 are as follows : ( Rs. in Lakhs)

Name of the Statute Nature of the dues Amount Period to which amount relates Forum where the dispute is pending
Bombay Sales Tax Act 1959 Sales Tax 36.44 2004-05 Dy. Commissioner (Sales Tax Appeal)
Finance Act 1994 Service Tax 96.73 2005-06 - 2007-08 Commissioner Rohtak
2.95 2006-07 - 2008-09 CESTAT
Income Tax Act 1961 Income Tax 1.30 2011-12 CIT (Appeals) - VI Kolkata
TDS 86.72 2012-13 and 2013-14 Joint Commissioner of Income Tax
Dehradun
Maharashtra Recognition Labour Wages 0.39 1998-00 Hon'ble High Court Mumbai
of Trade Unions and
Prevention of Unfair Labour
Practices Act 1972 ("MRTU
& PULP Act 1971")
Maharashtra Tax On the Levy of Entry Tax 514.40 2012-13 Levy of Entry Challenged in High
Entry of Goods Into Local on Natural Gas 721.11 2013-14 Court through filing of Writ Petition
Areas Act 2002 purchased. Mumbai
449.28 2014-15
378.03 2015-16
Maharashtra Value Added Sales Tax 114.00 2005-06 and 2006-07 Jt. Commissioner (Sales Tax
Tax Act 2002 Appeal) Nashik
The Central Excise Act 1944 Excise Duty 1.38 2010 CESTAT SZB Chennai
28.18 2002 - 06 CESTAT New Delhi
3.99 2006 - 07
13.07 1993 - 97 Dy. Commissioner Central Excise
483.19 1995 - 97 Supreme Court
25.10 1995 - 96 CESTAT SZB Chennai
67.84 1999 - 00 Supreme Court
195.00 2001-02 2002-03 2003-04
2004-05 & 2005-06
0.30 2002-03 Commissioner(Appeal) Gurgaon
5.80 2004-06 Addl. Commissioner Central Excise
115.11 2006-07 Commissioner Central Excise
Meerut
6.07 2006-07 Commissioner of Central Excise
Appeal -III Kolkata
4.47 2007-08 Asst. Commissioner of Central
Excise Kolkata-IV
0.66 2007-08 Dy. Commissioner Central Excise
4.15 2007-11
3.88 2008-09 Assistant Commissioner Central
82.31 Excise Rishra Division Kolkata –IV
23.72 2008-09 to 2012-13 Commissioner Appeals –II
1.71 2008-10 Commissioner of Excise Kol -IV
16.63 2009-10 CESTAT
8.92 2009-10 Commissioner Appeals –II
94.05 2009-10 Commissioner of Excise Kol -IV
6.65 2010-11 Assistant Commissioner Central
Excise Rishra Division Kolkata -IV
5.68 2010-11 Commissioner of Central Excise
Appeal -III Kolkata
293.62 2011-12 CESTAT
0.46 2013-14 Dy. Commissioner Central Excise
5.86 Apr-14 to Sep-14 Asst. Commissioner of Customs &
Central Excise Nellore
32.88 Nov-12 to Sep-13 Commissioner of Customs & Central
Excise Guntur
114.46 Oct-11 to Mar-12 CESTAT Bangalore
5.27 OCt-13 to Mar-14 Asst. Commissioner of Customs &
Central Excise Nellore
2.68 Oct-14 to Jun-15 Dy. Commissioner of Customs &
Central Excise Nellore
The Finance Act 1994 Service Tax 0.82 2006-07 CESTAT
0.27 2006-07 & 2007-08
0.01 2007-08 & 2008-09
256.25 2007-08 to 2009-10 Assistant Commissioner Central
Excise
0.99 2008-09 CESTAT
4.17 2008-09 Dy. Commissioner Central Excise
0.64 2009-10
1.19 2010-11 Asst Commissioner Central Excise
16.67 2010-11 to 2015-16 Assistant Commissioner
Central Excise Rishra Division
Kolkata -IV Commissionerate
The Rajasthan Tax on Entry Entry Tax 153.04 2007-08 to 2013-14 H'ble Supreme Court
of Goods Into Local Area
Act 1999
The Sales Tax Act 1932 Sales Tax 1.25 2008-09 J.C.(Appeal) Dehradun
THE WEST BENGAL VALUE Sales Tax 104.38 2006-07 JCST
ADDED TAX2003
THE WEST BENGAL VALUE Sales Tax 108.72 2008-09 Sr. Joint Commissioner of
ADDED TAX2003 Commercial Tax Appeal
The Central Sales Tax (CST) Sales Tax 6.95 2010-11 Sr. Joint Commissioner of
1956 64.72 2006-07 Commercial Tax Appeal JCST
The Central Sales Tax (CST) Sales Tax 149.30 2008-09 Sr. Joint Commissioner of
1956 Commercial Tax Appeal
12.48 2009-10 Sr. Joint Commissioner of
0.31 2010-11 Commercial Tax Appeal
10.89 2011-12
4.86 2012-13

viii) Having regard to corrective action plan (CAP) and terms of settlement agreed uponby the lenders as given in note 2.3.7 there is no default in repayment of dues to theFinancial Institutions banks government and debenture holders as on this date. Howeveras stated in the said note settlement with one of the banker is yet to be arrived at andpending this and final decision of the court on the matter it is not possible toascertain and comment in this respect.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). In our opinion and according to the informationand explanations given to us the term loans have been applied for the purpose for whichthey were raised.

x) During the course of our examination of books of account carried out in accordancewith generally accepted auditing practices in India we have neither come across anyincidence of material fraud on the Company by its officers or employees nor have we beeninformed of any such cases by the management.

xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid remuneration of Rs. 641.99Lakhs to Vice Chairmen and Managing Directors which has exceeded the limits prescribedunder Section 197 of the Act read with Schedule V of the Act. The company has applied tothe Central Government for approval for such managerial remuneration paid in excess ofprescribed limits.

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 given 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.

For LODHA & CO.
Chartered Accountants
Firm’s ICAI Registration No.:301051E
H. K. Verma
Place : Kolkata Partner
Date : May 27 2016 Membership No: 055104

"Annexure B" referred to in our Report of even date:

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 HindusthanNational Glass & Industries Limited ("the Company") as at March 31 2016 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

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 assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors’ Responsibility

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 deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Th ose Standards and the Guidance Note require that wecomply wiThethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement 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 controlssystem over 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 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.

Opinion

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 March 31 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 LODHA & CO.
Chartered Accountants
Firm’s ICAI Registration No.:301051E
H. K. Verma
Place : Kolkata Partner
Date : May 27 2016 Membership No: 055104