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Sejal Glass Ltd.

BSE: 532993 Sector: Industrials
NSE: SEZAL ISIN Code: INE955I01036
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NSE 05:30 | 01 Jan Sejal Glass Ltd
OPEN 5.55
PREVIOUS CLOSE 5.55
VOLUME 51
52-Week high 5.55
52-Week low 2.82
P/E
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.50
Sell Qty 956.00
OPEN 5.55
CLOSE 5.55
VOLUME 51
52-Week high 5.55
52-Week low 2.82
P/E
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.50
Sell Qty 956.00

Sejal Glass Ltd. (SEZAL) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR’S REPORT

Report on the Financial Statements

Opinion

We have audited the standalone financial statements of SEJAL GLASS LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2018 and thestatement of Profit and Loss (statement of changes in equity) and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and profit/loss (changes in equity) and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Management's Responsibility for the 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 (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

Other Matter

The Comparative Financial Information of the Company for the year ended 31 March 2017and the transition date opening balance sheet as at 1 April 2016 included in these Ind ASfinancial statements are based on the previously issued financial statements prepared inaccordance with the Companies (Accounting Standards) Rules 2006 audited by the us andhave been restated to comply with Ind AS. Adjustments made to the said financialinformation prepared in accordance with the Companies (Accounting Standards) Rules 2006to comply with Ind AS have been audited by us.

The Company has not conducted Internal Audit during the year as required underCompanies Act 2013.

Report on Other Legal and Regulatory Requirements

As required by the 'Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable in Annexure"A".

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 it appears from our examination of those books.

c) 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

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) There is no matters above in our opinion may have an adverse effect on thefunctioning of the company

f) The Company has failed to repay the deposits accepted by the Company and payinterest there on due dates hence the Directors are disqualified from being appointed as aDirector in terms of Section 164(2) of Companies Act 2013.

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 B".

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 opinionand to the best of our information and according to the explanations given to us:

i. The Contingent Liabilities and Pending Litigations have been disclosed in Note 28.2to its financial statements.

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

iii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses;

iv. There has been delay in transferring amounts required to be transferred to theInvestor Protection Fund by the Company.

For Motilal & Associates

Chartered Accountants

FRN: 106584W

CA Mokshesh Shah

Partner

M.No: 172906

Date: 30/05/2018

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Reports on Companies (Auditor's Report) Order 2016('the Order') issued by the CentralGovernment in terms of Section 143(11) of the Companies Act 2013 ('the Act') of SejalGlass Limited:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The fixed assets register needs to beupdated to reconcile with the general ledger.

(b) As explained to us the assets have been physically verified by the managementduring the year. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

(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.

2. As explained to us the Inventories have been physically verified during the year bythe management. In our opinion the frequency of verification is reasonable. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material.

3. (a) The company has granted unsecured loans to companies firms and other partiescovered in the register maintained under section 189 of the Companies Act 2013. Interesthas not been charged on these loans.

(b) In the absence of specific stipulation as to the terms of repayment the loans arerepayable on demand. Accordingly paragraph 3(b) of the Order is not applicable to thecompany for repayment of the principal amount.

4. 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.

5. In our opinion and according to the information and explanations given to us theCompany has not complied with the provisions of section 73 to 76 of the Companies Act2013 with regard to the Deposits accepted from public. According to the information andexplanations given to us no order has been passed by the National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal on the Company except for Orderpassed by Company Law Board on 29.02.2016 in respect of reschedulement of repayment ofPrinciple & Interest to the Fixed Deposit holders. We are informed by the Managementthat as repayment could not be made as per the prescribed repayment schedule whichrequired to clear dues Principle and Interest due to the Public Fixed Deposit Holder by 31March 2017.

6. The Company has continuously defaulted in payment of interest.

• The Balance in Fixed Deposit account is not reconciled.

• The Company has also failed to repay matured fixed deposits amounting to Rs.71488167/-

• The requirement of keeping not less than 15% of the amount of deposits maturingduring the financial year as well as in the following year in a scheduled bank in aseparate bank account titled "Deposit Repayment Reserve Account" has not beencomplied with.

• The Company has not filed the return of Deposits for the past six yearsincluding the year under audit.

7. We have broadly reviewed the books of accounts and records maintained by the companypursuant to the rules prescribed under section 148(1) of the Act for maintenance of costrecords in respect of manufacture of products and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete.

8. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has generally defaulted intimely payment of undisputed statutory dues including provident fund

Employees' State insurance income-tax - TDS sales tax value added tax Excise Dutyduty of customs service tax Cess and other material statutory dues as applicable to it.There have been delays in payment of following statutory liabilities. The outstandingbalance in these accounts as at 31 March 2018 is as follows.

Nature of Statutory Dues Amount in Rupees
Provident Fund 2593038
Income Tax i.e. Tax Deducted at source (TDS) 45769718
Central Sales Tax 39659136
Maharashtra Value Added Tax (MVAT) 9675068
Dadra Value Added Tax (DVAT) 340055
Gujarat Value Added Tax (GVAT) 696996
Service Tax 2877520
ESIC 309023
Profession Tax 176825
Excise Duty 13326523
Property Tax 16406224
Advance License-Duty Saved & Interest Payable 17994214
EPCG- Duty Saved & Interest Payable 237600670
EPCG-Terminal Excise Duty 3312774
GST Payable 3827736
Total 394565520

In our opinion and according to the information and explanations given to us followingundisputed amounts payable in respect of income tax Sales tax Value Added Tax duty ofcustoms Service Tax Excise Duty and Cess were in arrears as at 31 March 2018 for aperiod of more than six months from the date they became payable :

Nature of Statutory Dues Amount in Rupees
Income Tax i.e. Tax Deducted at source (TDS) 44577246
Provident Fund 2228438
Central Sales Tax 39659136
Maharashtra Value Added Tax (MVAT) 9675068
Dadra Value Added Tax (DVAT) 340055
Gujarat Value Added Tax (GVAT) 696996
Service Tax 2877520
ESIC 255783
Profession Tax 147900
Excise Duty 13326523
Property Tax 14906316
Advance License-Duty Saved & Interest Payable 17994214
EPCG- Duty Saved & Interest Payable 237600670
EPCG-Terminal Excise Duty (TED) 3312774

(b) According to the information and explanations given to us following are duesoutstanding of Sales Tax Custom Duty Excise Duty or cess applicable to it which havenot been deposited on account of dispute.

Name of Statute Nature of dues Amount Period to which Forum where dispute is pending
(Rs.) it relates
Income Tax Act Penalty 4900913/- A.Y.2007-08 Order has been passed in Favour of the Company by ITAT on 02.05.2017 by which the penalty has been waived. The Order is in process of being referred to High Court.
Income Tax Act Tax & Interest 3686271/- A.Y.2007-08 Order has been passed in Favour of the Company by ITAT on 29.08.2017 via order no. 2032/Mum//2011 The Order is in process of being referred to High Court.
Income Tax Act Tax & Interest 7156769/- A.Y.2007-08 Order has been passed in Favour of the Company by ITAT on 06.09.2017 order no. ITA5473/Mum/2016 The Order is in process of being referred to High Court.
Income Tax Act Penalty 4087154/- A.Y.2008-09 Order has been passed in Favour of the Company by ITAT on 06.12.2017 .ITA no.7040 MUM/2014
The Order is in process of being referred to High Court.
Income Tax Act Income Tax 5936154/- A.Y.2008-09 Order has been passed in Favour of the Company by ITATon 29.08.2017. No. 8422/Mum/2011
The Order is in process of being referred to High Court.
Central Excise Penalty 4500000/- CESTAT
Service Tax Tax Interest & Penalty 2882970/- F.Y.2007-08 & Commissioner Central Excise (Appeals)
2007-09
Service Tax Tax Interest & Penalty 9982702/- F.Y.2007-08 & Commissioner Central Excise (Appeals)
2007-09
CST Act Tax & Interest 112789/- F.Y.2009-10 Dy Comm of Sales Tax Appeals
CST Act Penalty 657768/- F.Y.2006-07 Dy Comm of Sales Tax Appeals
CST Act Tax & Interest 3661595/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
CST Act Penalty 441898/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
CST Act Tax Interest & Penalty 240082/- F.Y.2010-11 Dy Comm of Sales Tax Appeals
CST Act Tax Interest & Penalty 16330302/- F.Y.2010-11 Dy Comm of Sales Tax Appeals
MVAT Act Penalty 53212/- F.Y.2009-10 Dy Comm of Sales Tax Appeals
MVAT Act MVAT Tax & Interest 4102858/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
MVAT Act Penalty 2519127/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
MVAT Act MVAT Tax & Interest 3534779/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
MVAT Act Penalty 470103/- F.Y.2008-09 Dy Comm of Sales Tax Appeals
MVAT Act MVAT Tax & Interest 15428608/- F.Y.2007-08 Dy Comm of Sales Tax Appeals
MVAT Act Penalty 8339788/- F.Y.2007-08 Dy Comm of Sales Tax Appeals
MVAT Act Penalty 744317/- F.Y.2006-07 Dy Comm of Sales Tax Appeals

9. The Company has defaulted in payment of loans taken from Banks and FinancialInstitutions. Also the Company's Loan accounts have been classified as Non-PerformingAssets by the lending bankers. The Banks have proceeded against the Company under SARFAESIAct for recovery of its advances. The Company has defaulted to the tune of Rs.49.25crores.

10. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year.

11. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

12. According to the information and explanations give to us and based on ourexamination of the records of the Company the Executive Directors have not taken theRemuneration during the year and hence the Company has not provided the same Henceparagraph 3(xi) of the Order is not applicable.

13. 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.

14. 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.

15. According to the information and explanations give 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.

16. 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.

17. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Motilal & Associates

Chartered Accountants

FRN: 106584W

CA Mokshesh Shah

Partner

M.No: 172906

Date: 30/05/2018

ANNEXTURE ‘B’ TO THE INDEPENDENT AUDITOR’S REPORT

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 SEJALGLASS LIMITED ('the Company') as of 31 March 2018.

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 the 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 Companies Act 2013.

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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

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 auditors' 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 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 authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 31 March 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 Motilal & Associates

Chartered Accountants

FRN: 106584W

CA Mokshesh Shah

Partner

M.No: 172906

Date: 30/05/2018