1. I have audited the attached Balance Sheet of Excel Glasses Limited
(The Company), having its registered office situated at Udayanagar,
Pathirapally, Alappuzha - 688 521 (Kerala), as at 31st December 2011
and the Profit and loss Account and the Cash Flow Statement for the
period ended on that date, annexed thereto. These financial statements
are the responsibility of the Company''s management. My responsibility
is to express an opinion on these financial statements based on my
2. I have conducted my audit in accordance with auditing standards
generally accepted in India. Those Standards require that 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, evidences supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for
3. As required by the Companies (Auditors'' Report) Order, 2003, (as
amended) issued by the Central Government of India in terms of sub
section (4A) of Section 227 of the Companies Act, 1956 of India (the
Act) and on the basis of such checks of the books and records of
the Company, as I have considered appropriate, and on the basis of the
information and explanations given to me during the course of my audit,
I have given in the Annexure a statement on the matters specified in
paragraph 4 and 5 of the said order.
4. I further state that:
(i) Attention is invited to Notes No. 3 of Schedule 16 regarding
non-disclosure of amount payable to Micro, Small and Medium
(ii) Attention is invited to Notes No. 8 of Schedule 16 regarding
change in the regarding change in the accounting practices followed by
the Company in respect of provisioning of excise duty on finished goods
held at the period end, which has no effect on the Profit (Loss) of the
(iii) Attention is invited to Note No. 9 and Note No. 10 of Schedule 16
regarding the scheme of arrangement between the shareholders and the
Company in respect of reduction of nominal value of Capital, Conversion
and adjustment of the of the same against the carried forward losses of
the Company. The accounting effect of the same shall be made in the
ensuing financial year, since it requires the compliances /approval
from various statutory bodies.
(iv) Attention is invited to Note No. 15 of schedule 16 regarding the
recoverability of deferred tax asset of Rs. 1,087.31 laces based on the
revival of the Company, of which I am not in a position to express an
opinion as on Balance Sheet date;
(v) Attention is invited to Note No.21 of schedule 16 regarding the
reversal of provision for impairment loss amounting to Rs. 142.02 laces;
Subject to above and further to my comments in the Annexure referred to
in the above paragraph, I report that:
a) I have obtained all the information and explanations, which to the
best of my knowledge and belief were necessary for the purpose of my
b) In my opinion, proper books of account as required by law have been
kept by the Company so far as it appears from my examination of those
c) The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of account.
d) In my opinion, the Balance Sheet and Profit & Loss Account dealt
with by this report comply with the Accounting Standards (''AS)
referred to in sub-section (3C) of section 211 of the Companies Act,
I) regarding the accounting of provision for gratuity on non actuarial
basis, which is not in compliance with the requirement of AS-15
''Employee benefits, the effect of the same is not quantifiable.
[Refer Note 7(H) of Schedule 15]
II) regarding the non compliance with disclosure requirement of As -
28, impairment of Assets. [Refer Note 2 of Schedule 15]
e) On the basis of written representations received from the directors
of the Company and taken on record by the Board of Directors, I report
that none of the directors of the Company is disqualified from being
appointed as director under Section 274 (1) (g) of the Companies Act,
f) In my opinion and to the best of my information and according to the
explanations given to me, the said accounts subject to what is stated
above having consequential impact on Profit for the period, Reserves
and Surplus and Assets, amount to the extent ascertainable and read
together with Significant Accounting Policies and Notes there on and
schedules thereto give the information required by the Companies Act,
1956 in the manner so required and present a true and fair view in
conformity with the accounting principles generally accepted in India :
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st December, 2011 and
ii. in so far as it relates to the Profit and Loss Account, of the
loss of the Company for the period ended on that date.
iii. in so far as it relates to the Cash Flow Statement, of the cash
flows of the Company for the period ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT REFERRED
TO IN PARAGRAPH 1 OF MY REPORT OF EVEN DATE
1) In respect of its fixed assets,
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) A major part of the fixed assets (in value terms) have been
physically verified by the management during the period. As informed to
me, the programmed is such that all the fixed assets will get physically
verified in five years time. In my opinion, the same is reasonable
having regard to the size of the Company and nature of its fixed
assets. No material discrepancies were noticed on such verification.
c) In my opinion, the Company has not disposed of substantial part of
fixed assets during the period.
2) In respect of inventories:
a) As explained to me, the inventories have been physically verified by
the management at the year end.
b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to me, the material discrepancies noticed in the physical
verification of inventory as compared to the book records is duly
3) In respect of Loans, secured or unsecured, granted or taken by the
Company to/from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956:
a) The Company has not granted any loans to Company, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956.
b) The Company has taken temporary loans from 3 parties amounted to Rs.
312 laces. The maximum amount involved during the period and period end
balances of loans taken from such companies were Rs. 619.79 laces and
Rs. 619 laces, respectively.
c) In my opinion, the rate of interest and other terms and conditions
on which loan have been taken are not, prima facie, prejudicial to the
interest of the Company.
d) There is no overdue amount in respect of loan granted/ taken by the
4) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the. Company and the nature of its
business for the purchase of inventory, fixed assets and also for the
sale of goods. During the course of my audit, I have not observed any
major weaknesses in internal controls.
5) In my opinion and according to the information and explanation given
to me, there were no transactions made by the Company in pursuance of
contracts or arrangements required to be entered in the register
maintained under section 301 of the Companies Act, 1956.
6) As informed to me, the Company has not accepted any deposits from
7) In my opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
8) The Central Government has not prescribed maintenance of cost
records under Section 209(1 )(d) of the Companies Act, 1956 for the
products of the Company.
9) In respect of statutory dues,
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Employees State Insurance, Income Tax, Value
added Tax, Sales Tax, Customs duty, Excise Duty, Cess and other
statutory dues have not been deposited regularly with the appropriate
authorities. According to the information and explanations given to me,
no undisputed amounts payable in respect of the aforesaid dues were in
arrears as at 31st December 2011 for a period of more than six months
from the date of becoming payable, except in case of Works Contract Tax
under KVAT of Rs.0.35 laces.
b) According to the information and explanations given to me, there are
no dues of Customs duty, Wealth tax, Service tax, excise duty and cess
which have not been deposited on account of any dispute.
10) The Company has been registered for a period exceeding five years
and its accumulated losses have exceeded fifty percent of its net worth
and has incurred cash losses during the financial year covered by my
audit as well as in the case of immediately preceding financial period.
I further states that the Company is a Potential Sick Industrial
Company within the meaning of Section 23 (1) of the Sick Industrial
Companies (Special Provisions) Act, 1985 as the accumulated losses of
the Company have resulted into erosion of more than fifty percent of
its net worth during the last year.
11) Based on my audit procedures and according to the information and
explanations given to me, I am of the opinion that the Company has not
in default in repayment of dues to financial institutions, banks or
debenture holders at the period end except in case of a bank amounted
to Rs. 0.99 laces [subject to reconciliation] since July 2009.
12) In my opinion and according to the information and explanations
given to me, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
13) In my opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditor''s Report) Order 2003 is not applicable to the Company.
14) The Company is not dealing or trading in shares, securities,
debentures and other investments.
15) According to the information and explanations given to me and the
records examined by me, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
16) According to the information and explanations given to me and the
records examined by me, the term loans have been applied for the
purpose for which they were raised.
17) Based on my audit procedures and according to the information and
explanations given to me, I am of the opinion that the Company has not
used for long term investments, the funds raised on short term basis
and vice versa.
18) During the period, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19) The Company has not issued any debentures during the Period.
20) The Company has not raised any money by way of public issue during
21) In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the period that causes the financial statements to be materially
For JOSEPH & NAMPIATHIRI
CA. BIJU NARAYANAN A.C.A