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Auditor Report of Hindusthan National Glass & Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Hindusthan National Glass & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the company's branches at Pondicherry, Nasik and Risikesh .

Management's responsibility for the standalone financial statements

The Company's 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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash fows 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 Companies (Accounts) Rules, 2014. Tis 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 financial statements that give a true and fair view and 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 our audit.

We have taken into account 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 the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Tose Standards

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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.

The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's 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 control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 qualified audit opinion.

Basis for qualified opinion

As stated in Note no. 2.34.1 of the financial statements, due to inadequacy of profit managerial remuneration to the extent of Rs. 944.63 Lakhs (including Rs. 302.72 Lakhs pertaining to previous year) has become in excess of the limits laid down in the Companies Act, 2013 and Companies Act, 1956 respectively awaiting Central Government approval. Pending such 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 explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its Loss and its Cash Flows for the year ended on that date.

emphasis of Matter

We draw attention to the following matters in the Notes to the Financial Statements:

1. Attention is invited to Note No 2.13.1 regarding carry forward of Minimum Alternate Tax (MAT) Credit Entitlement of Rs. 2,587.57 Lakhs based on future taxable income projected by the company.

2. Attention is invited to Note No 2.29 regarding long term Gas Supply Agreement (GSA) with GAIL(India)Limited; there are under drawn quantities of Liquefed Natural Gas(LNG) for the calendar year 2014. Against these the company has received demand notice from seller aggregating to Rs. 1758 Lakhs only representing an aggregate under drawn quantity of 450774 MMBTU. If this demand is paid, the same will be treated as advance in accounts as the company will be eligible to take under drawn quantities of LNG for the calendar year 2014 in subsequent contract years subject to seller's operational flexibility and price adjustments. The company has also represented to seller for reducing the said amount demanded which is pending resolution. Management is confident about utilization of under drawn LNG as above in subsequent contracted years. Accordingly pending resolution and in view of proposed use of LNG in future as stated above, no effect of the same has been given in these accounts. The said amount has been considered as contingent liability.

Our opinion is not modified in respect of these matters.

Other Matter

We did not audit the financial statements/ information of Puducherry, Rishikesh and Nashik included in the standalone financial statements of the Company whose financial statement/ financial information reflect total assets of Rs. 1,25,758 Lakhs as at 31st March, 2015 and total revenues of Rs. 69,561 Lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements / information's of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the Report of such branch auditors.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("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 statement on the matters specified 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 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 been kept by the Company so far as appears from our examination of those books and proper returns adequate for 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 under section 143(8) of the Act by Branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us;

e) In our opinion, the Balance Sheet, Statement of Profit and loss and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

f) On the basis of the written representations received from the directors as on March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act.

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. Pending litigations (Other than those already recognized in the accounts) having material impact on the financial position of the Company have been disclosed in the financial statement as required in terms of the accounting standards and provisions of the Companies Act, 2013 - refer Note 2.29.A and 2.29.A.1 of the financial statements;

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

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

Annexure to the Auditor's Report of even date:

i) a. Teh Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

b. All the assets have not been physically verified by the management during the year but there is regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifications.

ii) a. The inventory except stock lying with third parties, in few of the units and in transit has been physically verified by the management at regular intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of verification is reasonable.

b. In our opinion, having regard to Para (ii) (a) above the procedure for the physical verification of the inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records for inventory. The discrepancies noticed on verification between the 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, forms or parties covered in the register maintained under Section 189 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, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

v) The Company has not accepted any deposits from public covered under Sections 73 to 76 or any other relevant provisions of the Act and rules framed there under.

vi) We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act in respect of the Company's products to which they said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

vii) a. According to the information and explanations given to us, during the year, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues as applicable to it.

b. According to the information and explanations given to us, the details of disputed dues of sales tax, income tax, customs

duty, wealth tax, excise duty, service tax, and Cess, if any, as at March 31, 2015, are as follows:

(Rs,in Lakhs)

name of the statute nature of the dues Amount

Income Tax Act Income Tax 1.30

Finance Act, 1994 Service Tax 356.12

Maharashtra Recognition Labour Wages 0.39 of Trade Unions and Prevention of Unfair Labour Practices Act, 1972 ("MRTU & PULP Act, 1971")

The Rajasthan Entry Tax - Entry Tax 153.04 Goods Act, 2003

Name of the statute Period to which amount Forum where the relates dispute is pending

Income tax Act 2011-12 CIT (Appeals)- VI, Kolkata

Finance Act 1994 2005-06 to 2008-09 CESTAT

Maharashtra Recognition 1997-98 to 1999-00 Hon'able High Court, of Trade Unions and Mumbai Prevention of Unfair Labour practices Act 1972 ("MRTU & PULP Act, 1971")

The Rajasthan entry 2007-08 to 2013-14 H'ble Supereme Court Tax- Goods Act,2003

Name of the Statute Nature of the dues Amount

Maharashtra Tax On the Levy of Entry Tax on 1,684.80 Entry of Goods Into Local Natural Gas purchased. Areas Act, 2002

Maharashtra Value Added Sales Tax 150.44 Tax Act ,2002

Mathadi Act Labour Wages 45.48

The Central Excise Act 1944 Excise Duty 5.80

90.66

7.78

20.89

25.10

1.18

3.36

115.11

3.94

5.43

13.07

483.19

67.84

195.00

Service Tax 1.19

2.09

4.81

The Sales Tax Act, 1932 Sales Tax 582.70

258.02

1,927.61

210.03

6.68

Civil case (Civil Procedure Challenged the Claims 0.28 Code) under welfare schemes under post retirement benefits



Name of the Statute Period to which amount Forum where the relates dispute is pending

Maharashtra Tax on the 2012-13 to 2014-15 Levy of Entry Challenged in Entry of Goods in to High Court Local Areas Act, 2002 through fling of Writ Petition, Mumbai

Maharashtra Value Added 2004-05 to 2006-07 Jt Commissioner Tax Act,2002 (Sales Tax Appeal) Nashik

Mathadi ACT 1999-01 Hon'able High Court, Mumbai

tHE cENTRAL Excise 2004-06 Addl Commissioner ACT, 1944 Central Excise

2007-08 to 2008-09 Assistant Commissioner Central Excise 2010-11 to 2011-12

2001-02 to 2006-07 CESTAT

1995-96

2010-11

2010-11 Commissioner Appeal

2006-07 Commissioner Central Excise

2006-07 Commissioner of Service Tax

2006-07 to 2010-11 Dy Commissioner Central Excise 1993-97

1994-95 to 1996-97 Supreme Court

1999-2000

2001-02 to 2005-06

2010-11 Asst Commissioner Central Excise

2006-07 to 2008-09 CESTAT

2008-09 to 2009-10 Dy Commissioner Central Excise

The Sales Tax Act,1932 2006-07 JCST

2008-09 Senior Joint Commisioner of Commercial Tax Appeal 2011-12

2009-10 to 2010-11 Sr. Joint Commissioner of sales Tax

2003-04 T.T. Tribunal , Dehradun

Civil Case (Civil 2002-03 Court of the Civil Procedure code) Judge at Pimpri

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act 1956 and Rules made there under.

viii) The Company does not have any accumulated losses as at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix) Having regard to corrective action plan (CAP) and terms of settlement agreed upon by the lenders as given in note 2.3.10, there is no default in repayment of dues to the banks, FI's and debenture holders as on this date. However, as stated in the said note, settlement with one of the banker is yet to be arrived at and pending this and final decision of the court on the matter, it is not possible to ascertain and comment in this respect.

x) The Company has given guarantees for loans taken by others from banks and financial institutions. In our opinion and according to the information and explanations given to us, the terms and conditions of these guarantees are prima facie not prejudicial to the interest of the Company.

xi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised other than Rs. 100 Crore disbursed by the lender as on March 31, 2015 and pending utilization for intended use the amount so received has been temporarily invested in Mutual Funds (Refer Note No. 2.12.2 of the financial statements).

xii) During the course of our examination of books of account carried out in accordance with generally accepted auditing practices in India, we have neither come across any incidence of fraud on or by the Company nor have we been informed of any such cases by the management.

For Lodha & Co.

Chartered Accountants

Firm's ICAI Registration No.:301051E



Place: Kolkata h. K. Verma

Date: May 28, 2015 Partner

Membership No: 055104


Mar 31, 2014

We have audited the accompanying financial statements of Hindusthan National Glass & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and 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 our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards 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 misstatement.

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 the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management 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 qualified audit opinion.

Basis for Qualified Opinion

As stated in Note no. 2.35.1 of the Financial Statements due to inadequacy of profit managerial remuneration to the extent of Rs. 1,121.70 Lakhs (including Rs. 579.43 Lakhs pertaining to previous year) has become in excess of the limits laid down in the Companies Act, 1956 awaiting Central Government approval. Pending such 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 explanations given to us, except for possible effect of the matter described in the Basis for Qualified Opinion paragraph, the financial statements read with notes thereon give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(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.

Emphasis of Matter

1. Attention is invited to Note No 2.13.1 regarding carry forward of Minimum Alternate Tax (MAT) Credit Entitlement of Rs. 2,587.57 Lakhs based on future taxable income projected by the Company.

Independent Auditors'' Report

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order"), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(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 purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The report on the accounts of the branch offices audited under section 228 by a person other than the Company''s auditor has been forwarded to us as required by clause (c) of sub-section (3) of section 228 and have been dealt with in preparing our report in the manner considered necessary by us;

(d) 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;

(e) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 to the extent applicable;

(f) On the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Independent Auditors'' Report (Referred to in Paragraph 1 of our Report of even date)

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

b. All the assets have not been physically verified by the Management during the year but there is regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifications.

c. During the year, the Company has not disposed off substantial part of its fixed assets.

ii) a. The inventory except stock lying with third parties, in few of the units and in transit has been physically verified by the Management at regular intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of verification is reasonable.

b. In our opinion, having regard to Para (ii) (a) above, the procedure for the physical verification of the inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records for inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material to the extent verified.

iii) a. The Company has not granted any loans, secured or unsecured, to companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. The Company had not taken any unsecured loan from companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

v) a. To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Act have been so entered.

b. In our opinion, having regard to the remarks as given in Para (iv) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of Act and aggregating during the year to Rupees Five Lakhs or more in respect of each party have been at prices which are considered reasonable having regard to prevailing market price for such goods and materials.

vi) The Company has not accepted any deposits from the public during the year.

vii) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by Central Government for the maintenance of cost records under section 209(1)(d) of the Act and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix) a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Wealth Tax, Service Tax, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at March 31, 2014.

b. According to the information and explanations given to us, the statutory dues which have not been deposited as on March 31, 2014 on account of disputes are as under :

Annexure to the Independent Auditors'' Report

Name of the Statute Nature of Amount Period to which the dues (Rs. In Lakhs) amount relates

Bombay Sales Tax Act Sales Tax 5.13 1997-98 1959

Finance Act, 1994 Service Tax 96.73 2005-06 to 2007-08 2.95 2006-07 to 2008-09

Maharashtra Value Added Sales Tax 36.44 2004-05 Tax Act, 2002

114.00 2005-06 & 2006-07

The Central Excise Excise Duty 16.60 2002 to 2006 Act, 1944 3.99 2006 to 2007

13.06 1993-97

22.26 1994-97

483.19 1995-97

25.10 1995-96

67.84 1999-2000

195.00 2001-02, 2002-03, 2003-04, 2004-05 & 2005-06

33.88 2002-03

0.30 2002-03

105.31 2003-04

5.79 2004-05, 2005-06

115.11 2006-07

3.94

5.03

4.47 2007-08

0.61 2007-08

4.15 2007-08 to 2010-11

267.22 2007-08, 2008-09 and 2009-2010

86.19 2008-09

7.38 2010-11

7.71 2010-11

0.61 2010-11

4.77 2011-12

The Central Excise Act, Service Tax 9.05 2004-05 1944

0.82 2006-07

0.27 2006-07 & 2007-08

0.01 2007-08 & 2008-09

Name of the Statute Forum where the dispute is pending

Bombay Sales Tax Act 1959 Commissioner Sales Tax, Pune

Finance Act, 1994 CESTAT

CESTAT

Maharashtra Value Added Tax Act, 2002 Jt. Commissioner (Sales Tax Appeal), Nashik

Maharashtra Sales Tax Tribunal, Mumbai

The Central Excise Act, 1944 CESTAT

CESTAT

Dy. Commissioner Central Excise

CESTAT

Supreme Court

CESTAT

Supreme Court

Supreme Court

CESTAT

CESTAT

Supreme Court

Addl. Commissioner Central Excise

Commissioner Central Excise

Commissioner of Service Tax

Joint Commissioner Central Excise

Assistant Commissioner Central Excise

High Court, Madras

Bombay High Court

Commissioner of Service Tax

Assistant Commissioner Central Excise

Assistant Commissioner Central Excise

Commissioner Appeal

Commissioner Appeals Central Excise

Assistant Commissioner Central Excise

The Central Excise Act, 1944 CESTAT

CESTAT

CESTAT

CESTAT

Name of the Statute Nature of Amount Period to which the dues (Rs. In Lakhs) amount relates

0.99 2008-09

4.17 2008-09

0.64 2009-10

1.19 2010-11

The Sales Tax Act, 1932 Sales Tax 6.68 2003-2004

582.70 2006-07

258.02 2008-09

12.48 2009-10

2010-2011 198.27

721.11 2013-14

Name of the Statute Forum where the dispute is pending

CESTAT

Dy. Commissioner Central Excise

Dy. Commissioner Central Excise

Asst. Commissioner Central Excise

The Sales Tax Act, 1932 T.T. Tribunal, Dehradun

JCST

Senior Joint Commisioner of Commercial Tax Appeal

Senior Joint Commissioner of Sales Tax

Senior Joint Commissioner of Sales Tax

Mumbai High Court

x) The Company has no accumulated losses at the end of the financial year. It has not incurred cash losses in the current year. However, it has incurred cash losses in the immediately preceding financial year.

xi) In our opinion and on the basis of information and explanations given to us by the Management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by body corporate from bank are not prima facie prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii) According to the information and explanations and on an overall examination of the Balance Sheet of the Company, we report that the Company has used funds to the extent ofRs. 4,845.44 Lakhs raised on short term basis mainly on account of losses and fixed assets.

xviii) During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any secured debenture during the year. Accordingly, clause 4(xix) of the Order is not applicable to the Company.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For LODHA & CO. Chartered Accountants

Firm''s ICAI Registration No. : 301051E

H. K. Verma

Place : Kolkata Partner

Date : May 20, 2014 Membership No : 055104


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Hindusthan National Glass & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and 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 our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards 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 misstatement.

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 the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, 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.

Basis for Qualified Opinion

As stated in Note no. 2.35.1 of the financial statements due to inadequacy of profit, managerial remuneration to the extent of Rs. 579.43 lacs has become in excess of the limits laid down in the Companies Act, 1956 awaiting Central Government approval. Moreover the appointment and remuneration of Rs. 4.76 lacs to the Executive Director is also subject to approval of Shareholders and Central Government. Pending such approvals, impact thereof on the financial statements is not ascertainable.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for possible effect of the matter described in the Basis for Qualified Opinion paragraph, the financial statements read with notes thereon give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(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, 2003 (“the Order"), issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(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 purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The report on financial statements of units audited by Branch Auditors has been considered by us in preparing our report;

(d) 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;

(e) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 to the extent applicable;

(f) On the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a Director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

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

b. All the assets have not been physically verified by the Management during the year but there is regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifications.

c. During the year, the Company has not disposed off a substantial part of its fixed assets.

ii) a. The inventory except stock lying with third parties, in few of the units and in transit has been physically verified by the Management at regular intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of verification is reasonable.

b. In our opinion, having regard to Para (ii) (a) above the procedure for the physical verification of the inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records for inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material to the extent verified.

iii) a. The Company has not granted any loans, secured or unsecured, to companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. The Company had not taken any unsecured loan from companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

v) a. To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Act have been so entered. b. In our opinion, having regard to the remarks as given in Para (iv) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of Act and aggregating during the year to Rs. Five lacs or more in respect of each party have been at prices which are considered reasonable having regard to prevailing market price for such goods and materials.

vi) The Company has not accepted any deposits from the public during the year.

vii) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by Central Government for the maintenance of cost records under section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix) a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Wealth Tax, Service Tax, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at March 31, 2013.

x) The Company has no accumulated losses at the end of the financial year. It has incurred cash losses in the current year. However, it has not incurred cash losses in the immediately preceding financial year.

xi) Having regard to the matter dealt with in the note 2.10.1 of the financial statements being sub-judice and default as such, presently not being ascertainable, according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi or a mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by body corporate from bank are not prima facie prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii) According to the information and explanations and on an overall examination of the Balance Sheet of the Company, we report that the Company has used funds to the extent of Rs. 3,186.84 lacs raised on short term basis mainly on account of losses and fixed assets.

xviii) During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

xix) The Company has not issued any secured debenture during the year. Accordingly, clause 4(xix) of the Order is not applicable to the Company.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Lodha and Co.

(Chartered Accountants)

Firm''s ICAI Registration No. 301051E

(H.K. Verma)

Partner

Membership Number: 055104

Place : Kolkata

Date : May 30, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Hindusthan National Glass & Industries Limited ("the Company") as at March 31, 2012 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("Act") and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

i) (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the Management during the year but there is regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verifications.

(c) During the year, the Company has not disposed off a substantial part of its fixed assets.

ii) (a) The inventory except stock lying with third parties and in transit has been physically verified by the Management at regular intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of verification is reasonable.

(b) In our opinion, the procedure for the physical verification of the inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records for inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) (a) The Company has not granted any loans, secured or unsecured, to companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii)(a) to (d) or the order are not applicable to the Company.

(b) The Company had not taken any unsecured loan from companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4(iii) (e) to (g) of the order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Act, have been so entered.

(b) In our opinion, having regard to the remarks as given in para (iv) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, and aggregating during the year to Rupees Five Lacs or more in respect of each party have been at prices which are considered reasonable having regard to prevailing market price for such goods and materials.

vi) The Company has not accepted any deposits from the public during the year.

vii) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by Central Government for the maintenance of cost records under section 209(1 )(d) of the Act and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Wealth Tax, Service Tax, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at March 31, 2012.

(b) According to the information and explanations given to us, the statutory dues which have not been deposited as on March 31, 2012 on account of disputes are as under:

Amount Period to which Nature (Rs.in the amount relates Forum where Name of the Statute of Dues Lacs) (Financial Year) dispute is pending

Employees' State Insurance Act, ESIC 3.48 2000-01 ESIC Court, Pune 1948 Damages 92.82 2005-06, 2007-08 and Assistant 2008-09 Commissioner of Central Excise 17.82 1993-94, 1994-95, Dy.Commissioner of The Central Excise Act, 1944 Excise 1995-96, 1996-97, Central Excise Duty 2007-08, 2008-09 and 2009-10 5.79 2004-05 and 2005-06 Addl.Commissionerof Central Excise

121.43 1998-99, 1999-2000, Commissioner of 2004-05 and 2006-07 Central Excise 5.03 2006-07 Jt.Commissioner of Central Excise 122.47 1994-95, 1995-96, CESTAT 1996-97, 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 11.14 2001-02 and 2005-06 High Court 656.34 1995-96, 1996-97,1999- Supreme Court 2000 and 2003-04 1.19 2010-11 Asst. Commissioner of Central Excise Service 4.06 2008-09 and 2009-10 Dy. Commissioner of Tax Central Excise 2.33 2006-07, 2007-08 and CESTAT 2008-09 Industrial Dispute Act, 1947 Labour 0.35 2002-03 Labour Court, Pune Wages 0.39 2003-04 High Court Mathadi Act Labour 90.79 1999-2000 and 2000-01 High Court Wages Bombay Sales Tax Act, 1959 Sales Tax 42.81 1997-98 Commissioner Sales Tax, Pune 36.44 2004-05 Jt. Commissioner (Sales Tax Appeal), Maharashtra Value Added Tax Sales Tax Nashik Act, 2002 114.00 2005-06 & 2006-07 Maharashtra Sales Tax Tribunal, Mumbai 582.70 2006-07 Jt.Commissioner of Sales Tax 743.96 2008-09 Senior Joint The Sales Tax Act, 1932 Sales Tax Commisioner of Commercial Tax Appeal 6.69 2003-04 T.T.Tribunal, Dehradun Finance Act, 1994 Service 2.95 2006-07, 2007-08 and CESTAT Tax 2008-09 The Electricity Act, 2003 Electri city 77.44 2011-12 Appellate Authority, Duty Mumbai

x) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a Financial Institution, Bank or Debenture holders.

xii) According to the information and explanations given to us, the Company has not granted any

loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a Chit Fund or a Nidhi/ Mutual Benefit Fund/Society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by body corporate from bank are not prima facie prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that short-term fund have not been used for long-term investment.

xviii) During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

xix) According to the information and explanations given to us, the Company has created security in respect of debentures issued during the year.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

2. Further to above, we report that

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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.

iii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.

iv) The report on accounts of units audited by Branch Auditors has been considered by us in preparing our report.

v) In our opinion, the Balance Sheet, Statement of 1 Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act to the extent applicable.

vi) On the basis of the written representations from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director under Section 274(1) (g) of the Act.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements read together with Notes on Financial Statements give the information required by the Act in the manner so required and also give a true and 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, 2012;

b) In the case of Statement of Profit and Loss of the Company, of the profit for the year ended on that date and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Lodha & Co.

Chartered Accountants

Firm's ICAI Registration No. 301051E

H K Verma

Place: Kolkata Partner

Date: May 15, 2012 Membership No: 55104


Mar 31, 2011

We have audited the attached Balance Sheet of Hindusthan National Glass & Industries Limited as at 31st March 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

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

(b) All the assets have not been physically verified by the management during the year but there is regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In respect of assets verified during the year and to the extent reconciled with book records, there were no material discrepancies.

(c) During the year, the Company has not disposed off a substantial part of its fixed assets. In our opinion, the disposal of such assets has not affected the going concern status of the Company.

ii) (a) The inventory except stock lying with third parties and in transit has been physically verified by the management at regular intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of verification is reasonable.

(b) In our opinion, the procedure for the physical verification of the inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As explained to us, discrepancies noticed on physical verification of inventory were not material.

iii) (a) The Company has not granted any loans, secured or unsecured, to companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (a) to (d) are not applicable to the company.

b) The Company had not taken any loans, secured or unsecured from companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (e) to (g) are not applicable to the company

iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, having regard to the remarks as given in para (iv) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to five lacs or more in respect of each party have been at prices which are considered reasonable having regard to prevailing market price for such goods and materials.

vi) The Company has not accepted any deposits from the public during the year.

vii) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business.

viii) The Central Government has not prescribed for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of any of the Companys product.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Wealth Tax, Service Tax, Income Tax, Sales Tax, Custom duty, Excise duty, cess and other material statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at 31st March 2011.

(b) According to the information and explanations given to us, the statutory dues which have not been deposited as on 31st March 2011 on account of disputes are as under:

Name of the Nature of Dues Amount Period to which the amount relates Forum where dispute is Statute (Rs.in (Financial year) pending lacs)

Employees State ESIC Damages Insurance ACT 3.48 2000-01 ESIC Court, Pune 1948

2005-06, 2006-07, 2007-08 and Assistant Commissioner 66.86 2008-09 Central Excise

1993-94, 1994-95, 1995-96, 1996-97, Asst/Dy- Commissioner 21.65 2007-08, 2008-09 and 2009-10 Central Excise

Addl Commissioner of 5.79 2004-05 and 2005-06 Central Excise

1995-96, 1998-99, 1999-2000, 2004- The Central Commissioner Central Excise Duty 156.37 05, 2005-06, 2006 -07, 2007-08 and Excise Act 1944 Excise 2008-09

1994-95, 1995-96, 1996-97, 2002- 103.28 03,2003-04, 2004 -05, 2005-06, CESTAT 2006-07, 2007-08 and 2008-09

4.38 2001-02 and 2007-08 High Court

1995-96,1996-97, 1997-98, 1999- 1,207.37 Supreme Court 2000, 2000 - 01

Industrial Labour Wages 2.60 1998-2000 & 2000-2003 Labour Court Pune Dispute Act 1947

Mathadi Act Labour Wages 73.33 1999-2001 High Court

Bombay Sales Sales Tax 42.81 1997-98 Commissioner Sales Tax, Pune Tax Act 1959

Haryana General Sales Tax 77.52 2002-03 Sales Tax Tribunal, Haryana Sales Tax Act

Jt Commissioner (Sales Tax Maharashtra 36.44 2004-05 Appeal) Nashik Value Added Tax Sales Tax

Maharashtra Sales Tax Act, 2002 114.00 2005-06 & 2006-07 Tribunal, Mumbai

6.89 2003-04 J.C. (Appeal), Dehradun

779.46 2005-06 and 2006-07 JCST

The Sales Tax Senior Joint Commisioner of Sales Tax 68.30 2007-08 Act, 1932 Commercial Tax Appeal

1996-97, 1997-98, 1998-99 & 1999- 58.59 T.T. Tribunal, Dehradun 2000

Finance Act, Service Tax 2.95 2006 - 07, 2007 - 08 and 2008 - 09 Commissioner (Appeals) 1994

x) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003, are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003, are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by a body corporate from bank are not prima facie prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that short term fund have not been used for long-term investment.

xviii) During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix) According to the information and explanation given to us, the Company has not issued secured debentures during the year.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

2. Further to above, we report that

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.

iv) The report on accounts of units audited by Branch Auditors has been considered by us in preparing our report.

v) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

vi) On the basis of the written representations from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director under Section 274(1)(g) of the Companies Act, 1956.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Notes on Accounts of Schedule "S" give the information required by the Companies Act, 1956 in the manner so required and also give a true and 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 31st March, 2011;

b) In the case of Profit and Loss Account of the Company, of the profit for the year ended on that date; and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Lodha & Co.

Chartered Accountants

Firms ICAI Registration No. 301051E

H. K. Verma

Place: Kolkata Partner

Date: 21st May 2011 Membership No: 55104


Mar 31, 2010

We have audited the attached Balance Sheet of HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

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

b) All the assets have not been physically verified by the management during the year but there is regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. There were no material discrepancies with regard to book records in respect of the assets verified during the year.

c) During the year, the Company has not disposed off a substantial part of its fixed assets. In our opinion, the disposal of such assets has not affected the going concern status of the Company.

ii) a) The inventory except stock lying with third parties and in transit has been physically verified by the management at regular intervals during the year. In our opinion and

according to the information and explanations given to us, the frequency of verification is reasonable.

b) In our opinion, the procedure for the physical verification of the inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. As explained to us, discrepancies noticed on physical verification of inventory were not material.

iii) a) The Company has not granted any loans, secured or unsecured, to companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (a) to (d) are not applicable to the company.

b) The Company had not taken any loans, secured or unsecured from companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (e) to (g) are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items are of special nature for which alternative quotations are not available, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

v) a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion, having regard to the remarks as given in para (iv) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to five lacs or more in respect of each party have been at prices which are considered reasonable having regard to prevailing

market price for such goods and materials.

vi) The Company has not accepted any deposits from the public during the year.

vii) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business.

viii) The Central Government has not prescribed for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of any of the Company’s product.

ix) a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance Wealth Tax, Service Tax, Income Tax, Sales

Tax, Custom duty, Excise duty, cess and other material statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at 31st March 2010.

There are no undisputed statutory dues payable for a period of more than six months from the date these dues became payable as at March 31, 2009.

b) According to the information and explanations given to us, the statutory dues which have not been deposited as on 31st March 2010 on account of disputes are as under:

Name of the Nature of Dues Amount Statute (Rs in lacs)

The Central Excise Excise Duty 656.34 Act, 1944

4.38

235.06

0.30

19.40

The Sales tax Sales Tax 40.15 Act, 1932

6.89

455.04

213.65

Maharshtra Value Sales Tax 114.00 Added Tax Act, 2002

Bombay Sales Tax Sales Tax 51.31 Act, 1959

Haryana General Sales Tax 77.52 Sales Tax Act

The Central Excise Service Tax 3.16 Act, 1944



Name of the Statute Period to which Forum where dispute the amount relates is pending (Financial year)

The Central Excise 1995-96,1996-97,1997-98, Supreme Court

Act, 1944 2000 - 01

2001-02 and 2007-08 High Court

1995-96,1996-97,1997-98, CESTAT

1998-99,1999-2000,2002-03,

2003-04,2004-05,2005-06,

2006-07 and 2008-09

2000-01and 2001-02, Commissioner (Appeals)

1993-96,2005-06 and 2008-09 Assistant Commissioner

The Sales Tax 1996-97, 1997-98, 1998-99, T.T. Tribunal, Dehradun

Act, 1932 1999-00

2003-04 J.C. (Appeal), Dehradun

2005-06 JCST

2001-02 ACCT

Maharshtra Value 2005-06, 2006-07 Maharshtra Sales

Added Tax Tax Tribunal, Act, 2002 Mumbai

Bombay Sales Tax 1997-98 Commissioner sales Tax, Pune

Act, 1959

Hary General 2002-03 Assessing Sales Tax Act Authority (Jhajjar)

The Central Excise 2007-08, 2008-09 and Commissioner (Appeals) Act, 1944 2009-10



x) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003, are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003, are not applicable to the Company.

xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by a body corporate from bank are not prima facie prejudicial to the interest of the Company.

xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that short term fund have not been used for long-term investment.

xviii)During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix) According to the information and explanation given to us, the Company has created security in respect of debentures issued during the year.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

2. Further to above, we report that

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of these books.

iv) The report on accounts of units audited by Branch Auditors has been considered by us in preparing our report.

v) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

vi) On the basis of the written representations from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director under Section 274(1)(g) of the Companies Act, 1956.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Notes on Accounts of Schedule “S” give the information required by the Companies Act, 1956 in the manner so required and also give a true and 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 31st March, 2010;

b) In the case of Profit and Loss Account of the Company, of the profit for the year ended on that date and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Lodha & Co.

Chartered Accountants

Firms ICAI Registration No. 301051E

H. K. Verma Place: Kolkata - 700 069 Partner

Date: May 19, 2010 Membership No: 55104

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