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Hindusthan National Glass & Industries Ltd.

BSE: 515145 Sector: Industrials
NSE: HINDNATGLS ISIN Code: INE952A01022
BSE 00:00 | 20 Sep 32.70 1.55
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NSE 00:00 | 16 Sep 25.95 0
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OPEN 32.70
PREVIOUS CLOSE 31.15
VOLUME 1785
52-Week high 116.95
52-Week low 17.35
P/E
Mkt Cap.(Rs cr) 293
Buy Price 130.80
Buy Qty 4876.00
Sell Price 130.80
Sell Qty 616.00
OPEN 32.70
CLOSE 31.15
VOLUME 1785
52-Week high 116.95
52-Week low 17.35
P/E
Mkt Cap.(Rs cr) 293
Buy Price 130.80
Buy Qty 4876.00
Sell Price 130.80
Sell Qty 616.00

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

Company auditors report

To

The Members of

Hindusthan National Glass & Industries Limited

Report on the Ind AS 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 2018 the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation in which are incorporated the Reports for the year ended on that date auditedby the branch auditors of the company's branches at Puducherry Nashik and Rishikesh(herein after referred to as Standalone Ind AS financial statements).

Management's Responsibility for the Ind AS 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sBoard of Directors as well as evaluating the overall presentation of the standalone IndAS financial statements.

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

Basis for Qualified Opinion

a) As stated in Note no. 2.38.1 of the Standalone Ind AS financial statements due toinadequacy of profit managerial remuneration to the extent of Rs.1818 Lakhs has exceededthe limits laid down in the Companies Act 2013. In absence of Central Government'sapproval for the same we are unable to ascertain the impact and comment upon the same.

b) As stated in Note No. 2.43 of the Standalone Ind AS Financial Statements noprovision for entry tax amounting to Rs.2059 Lakhs and interest thereon has been made bythe company pending determination of the final leviable amount.

c) As stated in Note No. 2.40 of the Standalone Ind AS Financial Statements thelenders had restructured the Term Loans with certain stipulations. The company hasdefaulted in repayment of principal and interest thereon for quarter ended

31st March 2018 and part of quarter ended 31st December 2017. During the currentquarter lenders have also suggested additional reorganizing/restructuring measures to betaken by the company which are being considered by the company. At present Company's NetWorth has completely eroded and with present position of cash flows the company may notbe able to meet its repayment obligations to its lenders in foreseeable future. Company'sprofitability and consequent repayment of loan are now dependent upon mutual settlementwith the lenders and outcome of reorganizing/restructuring measures. In view of theaforesaid we are unable to comment whether the company is a going concern.

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 Ind AS 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 31st March 2018 its Loss Total Comprehensive Income thechanges in Equity and its Cash Flows for the year ended on that date.

Other Matter

We did not audit the financial statements/ information of Puducherry Rishikesh andNashik included in the standalone Ind AS financial statements of the Company whosefinancial statement/ financial information reflect total assets of Rs.114853.85 Lakhs asat 31st March 2018 and total revenues of Rs.74719.54 Lakhs for the year ended on thatdate as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports havebeen furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of these branches is based solely on the Report of suchbranch auditors.

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 B" a statement on the matters specified inparagraphs 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) In our opinion the Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account and with the reportsreceived from the branches not visited by us;

e) In our opinion the Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Statement of Cash Flowscomply with the Indian Accounting Standards specified under section 133 of the Act;

f) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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 "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial control overfinancial reporting;

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 opinion and to the best of our information and accordingto 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 thestandalone Ind AS financial statements as required in terms of the accounting standardsand provisions of the Companies Act 2013- refer Note no. 2.34.A of the standalone Ind ASfinancial statements;

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

iii There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year.

For Doshi Chatterjee Bagri & Co LLP
Chartered Accountants
Firm's ICAI Registration No. : 325197E/E300020
MRIDULA JHUNJHUNWALA
Place : Kolkata Partner
Date : 16th May 2018 Membership No: 056856

Annexure to the Independent Auditor's Report

"Annexure A" 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 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on 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 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 Act.

Auditor's 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 deemed tobe prescribed under section 143(10) of the Act to the extent applicable to an audit ofInternal Financial Controls and both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout 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 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's Internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

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 controlsover 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 2018 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 Doshi Chatterjee Bagri & Co LLP
Chartered Accountants
Firm's ICAI Registration No. : 325197E/E300020
MRIDULA JHUNJHUNWALA
Place : Kolkata Partner
Date : 16th May 2018 Membership No: 056856

"Annexure B" referred to in our report of even date

i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

b. All the property plant and equipment have not been physically verified by themanagement during the year but there is regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. As informed no material 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 comprising all the immovableproperties of land and buildings are held in the name of the Company as at the BalanceSheet date.

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 investments guarantees and security 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 employee's state insurance income-taxsales-tax service tax duty of Customs duty of excise value added tax cess and otherstatutory dues as applicable to it. No undisputed amounts payable in respect of aforesaidstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

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 & ValueAdded Tax if any as at 31st March 2018 are as follows: .

Rs. in Lakhs
Name of Statute Nature of the Dues Amount Forum where the dispute Is pending Period to which Amount relates
Finance Act 1994 Service Tax 296.43 Commissioner of Central Excise Appeal/Assisstant Commissioner Central Excise Appeal 2007-08 to 2012-13
The Central Excise Act 1944 Excise Duty 572.55 Commissioner of Central Excise Appeal/Assisstant Commissioner Central Excise Appeal 2007-08 & 2012-13
West Bengal VAT & The Central Sales Tax Act 1956 Sales Tax 534.75 SCCT/JCCT 2002-03 to 2014-15
The Central Excise Act 1944 Excise Duty 199.94 CESTAT & SZB Chennai 2009-10 to 2013-14
The Central Excise Act 1944 Excise Duty 13.07 Dy. Commissioner Central Excise Puducherry 1993 to 1997
The Central Excise Act 1944 Excise Duty 3.73 CESTAT & SZB Chennai 2007 to 2011
The Central Excise Act 1944 Excise Duty 0.66 Dy. Commissioner Central Excise Puducherry 2007-08
Maharashtra Value Added Tax 2005 VAT 114.00 Joint Commissioner Sales Tax Appeal Nashik 2005-06 to 2006-07
The Central Excise Act Excise Duty 29.09 CESTAT/Supreme Court 1995-96 to 2010-11
The Central Excise Act Excise Duty 114.46 CESTAT Bangalore Oct 2011 to Mar 2012
The Central Excise Act Excise Duty 8.71 Commissioner of Customs & Central Excise Guntur Aug 2013 to Mar 2015
The Central Excise Act Excise Duty 1.66 Commissioner of Customs & Central Excise Tirupathi Aug 2013 to Mar 2015

(viii) (a) The company has defaulted in repayment of loans/borrowings to banksfinancial institution and debenture holder.

The period and amount of default are as under:

Name of the Bank

November

December

January

February

March

Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest
HDFC - 152.90 112.50 158.00 - 158.00 - 142.71 112.50 158.00
Syndicate Bank - 107.36 187.50 110.94 - 110.94 - 100.20 187.50 110.94
DBS Bank - - 512.00 - 2205.00 - - - - 290.03
LT Finance - - 156.25 - - - - - 156.25 69.54
State Bank of India - - 496.00 - - - - - 1996.00 897.67
Axis Bank - - 375.00 - - - - - 440.00 113.48
Exim Bank - - 91.74 75.03 - 83.06 - 75.02 91.75 83.06
Edelweiss Asset Reconstruction Co. Ltd. - - 172.86 180.63 - 180.63 - 163.15 172.86 180.63
Rabo Bank - - 975.00 - - - - - - 307.59
Standard Chartered Bank - - - 42.04 - 42.04 - 37.96 - 42.04
Life Insurance Corporation - - - - - - - 1040.00 - -
Bank of Baroda - - - - - - - - - 28.02

(b) List of LC bills not honoured as on 31st March 2018 by the company:

Name of the bank November 2017 December 2017 January 2018 February 2018 March 2018
HDFC Bank 1263.77 174.24 337.34 220.56 296.01
Syndicate Bank 267.19 310.12 161.49 364.11 64.80
Axis Bank - - - - 11.19

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument). 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 by the Company or material fraud on the Company by itsofficers or employees nor have we been informed 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 during the year the Company has paidremuneration of Rs.606 Lakhs to the Chairman and Managing Director and Vice Chairman andManaging Director which has exceeded the limits prescribed under Section 197 of the Actread with Schedule V of the Act. The company has applied to the Central Government forapproval for such managerial remuneration paid in excess of prescribed limits includingRs.1212 Lakhs for previous years.

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 Standalone Ind AS financial statements as requiredby the applicable accounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has made preferential allotment of2215000 Equity Shares during the year. The requirements of Section 42 of Companies Act2013 have been complied with and the Funds have been used for the purpose for which thesewere raised.

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 Doshi Chatterjee Bagri & Co LLP
Chartered Accountants
Firm's ICAI Registration No. : 325197E/E300020
MRIDULA JHUNJHUNWALA
Place : Kolkata Partner
Date : 16th May 2018 Membership No: 056856