iag glass company ltd Auditors report

To the members of IAG Glass Company Limited Report on the financial statements

We have audited the accompanying financial statements of IAG Glass Company Limited which comprise the Balance Sheet as at 31^st March 2018, and statement of Profit & Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134 (5) of the Companies Act. 2013 ("the Act") 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 Accounting principles generally accepted in India, including the accounting standards specified under section 133 of the act, read with rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies: making judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into accounts the provisions of the act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the act and rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143 (10) of the Act and other applicable authoritative pronouncements issues by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply

with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of risk of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by company ‘s directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements subject to qualified opinion given below and read together with the notes and significant accounting policies thereon, and attached thereto give the information required by the Companies Act 2013 prepared under GAAP in the manner so required and in view of qualifications we are unable to confirm whether the accounts give a true & fair view in conformity with the accounting principles generally accepted in India.

a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2018.

b) In the case of the statement of Profit and Loss, 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. 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 Act, we give in the Annexure "A" statements on the matters specified in paragraphs 3 and 4 of the order.

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

a. 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.

b. In our opinion proper books of account as required by law have not been properly maintained by the company so far as appears from our examination of those books

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with accounting standards referred to in section 133 of the Companies Act, 2013, read with rule 7 of the Companies(Accounts) Rule, 2014, except non provisions of depreciation, non provisions of interest on Unsecured loans and secured loans (Refer note no 37) non provisions of impairments loss on Fixed Assets, cash basis treatment of Administrative & Other expenses and as disclosed in qualified opinion mentioned below. Financial impact of the same could not be ascertained at this stage.

e. On the basis of written representation received from the directors as on March 31, 2018, and taken on record by the Board of directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of sub section(2) of section 164 of the Companies Act 2013 except one director.

f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the companys internal financial controls over financial reporting.

g. 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 in our opinion and to the best of our information and according to the explanations given to us:

(i) The company has disclosed the impact of pending litigations on its financial position in its financial statements, if any( Refer note No 26)

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Qualified Opinion

(a) The Company has not followed the SEBI guidelines of publishing of unaudited financial

results of the year within the prescribed time. *

(b) Due to closure of Factory during the year we could not visit the Factory and as such we have relied upon stock statements of Inventory as certified by the management.

(c) These accounts have been prepared on going concern basis. Net Worth of the company has been fully eroded. However, in our opinion, the ability of the Company to continue as a going concern depends on introduction of sufficient injection of funds and its profitability.

(d) As stipulated by the State Bank of India, Unsecured Loans of Rs 24.50 crores obtained by the Company from a party had to be converted into Non Cumulative 0% dividend paying Preference Shares within March 2010. Out of the above, Rs.6.50 crores Preference Shares have

been issued so far and the balance remains outstanding. No interest has been provided on other inter corporate loans. During the year the company has taken Rs 1.34 lacs unsecured loan from a party.

(e) Gratuity premium of Rs.22.76 Lakhs claimed by L.I.C during the year for 2008-09 have not been paid. Loans of Rs.72.40 Lakhs taken by the Company from the Gratuity fund have not been repaid. Employees Group Gratuity Policy with LIC of India has not been renewed and the gratuity for the year has not been provided for during the year.

(f) In absence of reconciliation and balance confirmation from unsecured Loans received, debtors, creditors, advances and deposits, we have relied on the companys book balances and is subject to scrutiny. There are several debit/credit balances of different debtors/creditors for which no party wise details were available. Substantial amounts due from debtors, other debts and advances to suppliers appear to be doubtful of recovery. We are unable to quantify the same at this stage.

(g) Depreciation on tangible assets has neither been provided for last 6 years nor the useful lives together with scrap percentage of the assets has been determined by the company.

(h) Interest have not been provided on the unsecured loans taken from two parties as we are informed that the matter is subjudice.

(i) On the basis of loan balance confirmation from Term & Cash Credit loans have been reclassified resulting reduction of Rs. 31.88 lakhs in loan balance which have been treated as waiver of loan and considered as extra ordinary income in Profit & Loss a/c.

(j) Service Tax, Excise Duty & Cenvat recoverable balances need reconciliation and steps are - to be taken for suitable adjustments.

(k) We have been informed that various bank accounts of the Company have been attached by the Income tax and P.F. Authorities.

(l) Capital work-in-Progress amounting to Rs. 1052.82 lakhs is outstanding for a long time and

needs to be looked into for impairment. *

(m) We have been informed that the company has no possessional right on the premises at 3 Hungerford Street, Kolkata, 700017 and E-auction Sale notice has been issued for the same. (Refer note no. 32)

	For S Samanta & Co.
	Chartered Accountants
	Firm Registration No.
	305020E
	S. Samanta
	Partner
	Membership No 7200
Date: 30.05.2018
Place: Kolkata

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to paragraph (1) under the heading "Report on Other legal and regulatory requirements" of Independent Auditors report of even date:

On the basis of such checks as we consider appropriate and according to the information

and explanations given to us during the course of audit, we report that:

(i)

(a) Due to closure of factory we could not verify the records of Fixed Assets and are unable to comment on the same.

(b) No physical verification has been conducted by the management during the year and as

such we are unable to comment whether there is material discrepancies with book records. Technical assessment is required to be made to determine condition/absolution. •

(c) As explained to us that the title deeds of immovable properties are held in the name of the company but are mortgaged against bank finance

(ii) As informed by the management, during the year no physical verification of Inventories have been conducted. No records of inventories were made available to us, hence we are unable to comment whether there is material discrepancies with book records. Step should be taken to indentify obsolete / damage inventories.

(iii) The Company has not granted any loan secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) According to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of investments, guarantees and securities.

(v) The Company has not accepted any deposits from the public within the meaning of Section

73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified. *

(vi) No cost records has made available to us.

(vii)

(a) In our opinion and according to the information and explanations given to us, the Company is not regular in depositing with appropriate authorities undisputed statutory dues in respect of provident fund, investor education protection fund, employees state insurance, income tax, sales tax, excise duty, service tax and other statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of income tax, sales tax, excise duty, service tax etc., as at 31.03.2018 except the following statutory dues are outstanding for more than six months as at the end of the financial year.

Particulars	Amount (Rs. In Lakhs)
Provident Fund	192.17
Interest On Employees State Insurance	0.79
Tax Deducted At Sources(Payable)	24.57
Sales Tax	16.48
Consumer Durable Loan	19.56
Recurring Deposit/CTD with Post Office	20.40
LIC(Factory)	32.61
Salary & wages(Head Office & Factory)	586.56
Employees State Insurance	73.69
Statutory Bonus(2008-2009) (For 2009-10 to 2015-16 amount not ascertained)	12.56
Interest, due on Bank Loans, not paid	9124.61
Gratuity Premium	68.25
Term Loan and Cash credit from Banks and financial institution	4475.59

(c) According to records of the company the undemoted dues of Sales Tax, Income Tax, Excise duty and Provident Fund are pending on account of disputes:

Name of the Statute	Nature of Dues	Amount (Rs. In lakhs)	Period to which the amount relates	Forum where dispute is pending
1 The Central Excise Act,	Excise duty Leviable on special packing & forwarding	Unascertainable	1987	CEGAT- DELHI
2 Income Tax Act, 1961	Exchange Fluctuation Losses on foreign currency loan	Unascertainable	1989-1990 to 1992-1993	IT Deptt.
3 The Employees Provident Fund	Penal Damage	214.68 (Net of Deposit of Rs.	April 2001 to September 2004	Employees P.F Appellate

 

&MiscAct, 1952		25 Lakhs)		Tribunal, New
				Delhi
				West Bengal Sales Tax
4 West Bengal Sales Tax Act, 1949	Import of machinery for Repair treated as tumover(ex-parte)	26.01	2003-04	Tribunal, remanded back to Department for examination.

(viii) The Company has not made payments of interest and installment to banks / financial Institution loan of Rs. 4475.59 lakhs and interest of Rs. 9124.61 lakhs

(ix) Neither any term loan has been obtained nor any money was raised by way of initial public

offer or further public offer (including debt instruments) by the Company during the year.

(x) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, as far as verified by us, we have neither come across any incident of fraud by the Company or on the Company by its officers or employees nor have we been informed of any such cases by the management.

(xi) The trianagerial remuneration has been paid or provided in accordance with the

provisions of Section 197 read with Schedule V of the Act.

(xii) The Company is not a Nidhi Company, accordingly paragraph 3(xii) of the Order is not applicable

(xiii) The details of related parties transactions have been disclosed in the Financial

Statements as required by AS-18.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to information and explanations by the management the Company has not

entered into any non-cash transactions with the directors or persons connected with him. ,

(xvi) The Company is not required to be registered under Section 451A of the Reserve Bank of India Act, 1934

	For S Samanta& Co.
	Chartered Accountants
	Firm Registration No. 305020E
Date: 30.05.2018 Place: Kolkata	S. Samanta Partner Membership No 7200

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

Referred to paragraph 2 (f) under the heading "Report on Other legal and regulatory requirements" of the Independent Auditors report of even date of the members of IAG GLASS COMPANY LIMITED on the financial statements for the year ended March 31, 2018.

Report on the Internal financial controls under Clause (i) of Sub- section 3 of section 143 of the Act.

1. We have audited the internal financial controls over financial reporting of IAG Glass Company Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the financial statement of the Company for the year ended on that date.

Managements Responsibility for Internal Financial controls.

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal Financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable Financial information, as required under the Act.

Auditors Responsibility

2. Our responsibility is to express an opinion on the Companys internal financial controls over Financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribe under section 143 (10) of the Act to the extent applicable to an audit of internal controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

3. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and reporting effectiveness of internal controls based on the assessed risk. The procedure selected depended on the auditors judgment, including the assessment of the risks of materials misstatement of the financial statements, whether due to fraud or error.

4. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

5. A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable details, accurately and fairly reflect that transactions and depositions of the assets the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the companys assets that could have a materials effect on the financial statement.

Inherent Limitation of Internal Financial Controls Over Financial Reporting

6. Because of the inherent limitations financial control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting period are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

7. In our opinion, the Company has, in all materials respects, internal financial controls systems over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Internal Financial controls systems need improvement.

	For S Samanta& Co. Chartered Accountants Firm Registration No. 305020E
Date: 30.05.2018 Place: Kolkata	S. Samanta Partner Membership No 7200