Excel Glasses Ltd Auditor Reports

To

The Resolution Professional of

EXCEL GLASSES LTD

I. Report on the Audit of the Standalone Financial

Statements

1. Qualified Opinion

A. We have audited the accompanying Standalone Financial Statements of EXCEL GLASSES LTD CIN : L26109KL1970PLC002289 (“the Company”), which.comprise the Balance Sheet as at 31st March 2019, and the Statement Of Profit And Loss, the Statement of Changes in Equity and the Statement of Cash Flow for the year .ended on that date, Notes to the financial statements, including a summary of significant accounting policies and other explanatory information hereinafter referred to as “ the Standalone Financial Statements”)

B. In our opinion and to the best of our information and according to the explanations given to us,except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report the aforesaid financial statements give the information required by the Companies Act, 2013 ( “the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indain Accounting Standard) Rules 2015 , as amended, *( “Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and its profit and total Comprehensive income, changes in equity and its cash flows for the year ended on that date.

2. Basis for Qualified Opinion

The following are the Basis for Qualified Opinion

(i) The accumulated losses of the Company have exceeded its entire net worth and became a Sick Industrial Company within the meaning of the Sick Industrial Companies [Special Provisions] Act, 1985. The NCLT has ordered for the commencement of Corporate Insolvency Resolution Process (ClRP, w.e.f March 27,2019. The accounts have, however, been prepared by the management on a ‘Going Concern basis. This being a technical matter and in view of uncertainties and other facts and circumstances of the case, as discussed elsewhere in the report, we are unable to express an opinion as

to whether the Company can now operate as a Going Concern. However, should the Company be unable to continue as a Going Concern, the extent of the effect of the resultant adjustment on the net worth of the Company as at the year end and loss of the year, as explained by the management, is presently not ascertainable; [Refer Note No.32,33,36]

(ii) No provision for Gratuity has been made during the period under Audit.

We are unable to determine the financial impact of the above qualifications in points (i) to (ii) in the absence of appropriate details

3. Emphasis of Matter

(i) Attention is invited to Notes No. 44 regarding pending reconciliation and / or confirmations of accounts of Trade Receivables, Trade Payables, secured loans, unsecured loans, loans and advances given;

(ii) Attention is invited to Note No. 37 (a) regarding the matter that the compilation of accounting details/ information on the basis of records available on the best effort basis due to closure of its operations w.e.f 27th December 2012.

(iii) Attention is invited to Note No. 37 (b) regarding non provisioning of wages, salary etc.

(iv) Attention is invited to Note No. 3 regarding the provisioning of depreciation as per The Companies Act 2013.

(v) Attention is invited to Note no :34 on Contingent Liabilities not accounted due to litigations with tax departments and Note no:39,40,and 41 on litigation with various parties, the financial effect of which is not ascertained by the Management.

Our opinion is not qualified in respect of this matter

4. Disclaimer of Opinion:

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion in respect of the below mentioned points.

5. Basis for Disclaimer of Opinion:

The following are the Basis for Disclaimer of Opinion

(i) Attention is invited to Note No 37, regarding compilation of accounting details / information on the basis of records available at the company on best efforts basis due to suspended activities

in the Company .As a result of these matters, we were unable to determine whether any adjustments might have been found necessary in respect of the state of affairs as well as the loss reported by the Company

(ii) We were not able to verify physical inventories as well as the valuation of inventories declared in the statement due to the limitation placed on scope of our audit;

(iii) We were not able to form an opinion on the realizable value of Trade Receivables as well as to confirm its existence, since the management is not able to produce the confirmations in respect of Trade Receivables;

(iv) We were not able to form an opinion on the realizable value of Short Term Loans & Advances as well as to confirm its existence, since the management is not able to produce the confirmations in respect of Short Term Loan & Advances;

(v) Attention is invited to Note no :30 where the profit of Rs.3.66 crs fully represents write back of sundry balances and is not out of normal business of the company.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our opinion.

6. Key Audit Matters

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

7. Responsibilities of Management and Those

Charged with Governance for the Standalone

Financial Statements

A. The Companys Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indain Accounting Standard) Rules 2015 , as amended, ( “Ind AS”) and other accounting principles generally accepted in India. However pursuant to order issued by Honble National Company Law Tribunal (NCLT), Chennai Bench, dated March 26, 2019, the company is under Corporate insolvency Resolution Process (CIRP) with effect from March 27, 2019 under Insolvency and Bankruptcy Code (IBC), 2016 and a Resolution Professional - (RP) is appointed by the Committee of Creditors, under the provisions and for the purpose of compliance of IBC. The accompanying Standalone Financial Statements has been approved by the RP along with Suspended Board of Directors, in terms of provision of section 17 of the IBC, 2016. . However the financial statements have been approved by the RP solely on the basis of and on relying on the information and representation

given by the Suspended Board of Directors of the Company for the financial transactions incurred before the date of CIRP commencement. The RP has approved the said financials only to the limited extend of discharging the powers of the boards of Directors of the Company which have been conferred upon him inter alia in- terms of provision of section 17 of the IBC, 2016 and do not make any representations, verification or issue any statements in relations to the financial statements are true, complete and accurate in all respects.

B. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy

and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

C. In preparing the Standalone Financial Statements, Management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing

the Companys financial reporting process.

8. Auditors Responsibilities for the Audit of the

Financial Statements

A. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

B. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

i. Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

ii. Obtain an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate Internal Financial Control system in place and the operating effectiveness of such control.

iii. Evaluate the appropriateness of accounting

policies used and the reasonableness

of accounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of

managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

v. Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

C. Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in

i. planning the scope of our audit work and in evaluating the results of our work; and

ii. to evaluate the effect of any identified misstatements in the Standalone Financial Statements

D. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during our audit.

E. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

F. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

II. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016(“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of The Companies Act 2013, we give in “Annexure A” a statement on the matter specified in paragraphs 3 and 4 of the said order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

i. We have sought and obtained all the information and explanations, to the extent available which is to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid Standalone Financial Statements.

ii. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

iii. The Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

iv. In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards prescibed under

Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

v. On the basis of written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164(2) of the Act.

vi. With respect to the adequacy of the Internal Financial Controls with reference to the Financial Statements of the Company and the operating effectiveness of such controls, refer to our Separate Report in Annexure B”. Our report expresses an Modified opinion on the adequacy and operating effectiveness of the Companies Internal Financial with reference to the Financial Statements.

vii. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

With respect to the other matters to be included in the Auditors Report in accordance with Rule ,11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i) the Company is under Corporate Insolvency Resolution and has various pending litigations which would impact its financial position and going concern status. (Refer note no:32,33,34,39,40 and 41)

ii) the Company does not have any long-term contracts requiring a provision for material foreseeable losses.

iii) The Company does not have any amounts required to be transferred to the Investor Education and Protection Fund.

	For Balakrishnan and co
	Chartered Accountants
	FRN:011890S
	CA Balakrishnan M FCA DISA
	(Partner)
Place: Ernakulam	M.No:218798
Date :30.05.2019	UDIN: 19218798AAAAA06494