We have audited the accompanying financial statements of SEZAL GLASS
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.
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 auditor''s 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. 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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the 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
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
ii. in the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date; and
iii. 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 (Auditor''s 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
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
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
d) 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;
e) 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.
The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of SEZAL GLASS LIMITED on the accounts of the company
for the year ended 31st March, 2013.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. In respect of Fixed Assets:
a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets. The fixed assets register needs to be updated to reconcile
with the general Ledger.
b) As explained to us, the assets have been physically verified by the
Management during the year. According to the information and
explanations given to us, no material discrepancies were noticed on
c) During the year, the Company sold part of its Building which did not
form substantial part of its fixed assets. This sale has not affected
the going concern status of the Company.
2. In respect of Inventories:
a) As informed to us, the inventory has been physically verified by the
Management during the year. In our opinion, the frequency of
verification is reasonable.
b) In our opinion, the procedure of physical verification of
inventories 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 has maintained proper records of inventory. No material
discrepancies have been noticed on verification of inventories as
compared to book records.
d) Proper procedure needs to be in place to assess the non-moving and
obsolete items in the inventory.
3. In respect of Loans taken or granted:
a) Company has granted unsecured loans amounting to Rs.1078.37 Lacs in
addition to the Rs.1561.88 Lacs as at the beginning of the year, to
Companies, firms or other parties listed in the Register under section
301 of the Companies Act, 1956. Out of these loans, a refund of Rs.95.69
Lacs has been received and the balance outstanding as at the end of the
year was Rs.2544.56 Lacs. Maximum balance in these accounts during the
year was Rs.2544.56 Lacs.
b) The Company had taken loans amounting to Rs.NIL during the year in
addition to the loans taken and outstanding as at the beginning of the
year, from Companies, firms or other parties listed in the Register
under section 301 of the Companies Act, 1956 amounting to Rs.8.00 Lacs.
Out of these loans, a sum of Rs.NIL was outstanding as at the end of the
year. Maximum balance in these accounts during the year was Rs.8.00 Lacs.
c) In our opinion, the rates of interest wherever paid or charged, to
the parties covered in the Register under section 301 of the Companies
Act, 1956, were not prejudicial to the Interests of the Company.
d) In our opinion, since no specific stipulations as to the terms of
repayment were agreed upon, this clause does not apply.
4. In our opinion and according to the information and explanations
given to us, and as reported by the Internal Auditors of the Company,
the internal control procedures with regard to the purchases of
inventory and with regard to sale of goods, collection from customers,
inventory management, Cash management, credit notes monitoring need to
be strengthened, to commensurate with the size of the Company and the
nature of its business.
5. (a) According to the information and explanations given to us, we
are of the opinion that the transactions need to be entered in the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five Lacs in
respect of any party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
6. In our opinion and according to the information and explanations
given to us, the Company has generally complied with the provisions of
section 58A & 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the Deposits
accepted from public (except that there have been delays in payment of
interest for the months of February 2013 and March 2013, which has
since been paid. The Company has also not repaid matured fixed deposits
amounting to Rs.1.88 Crores as at 31st March, 2013 (Since paid ''36.20
Lacs). Intimation of non payment of matured deposits in respect of
small depositors has not been given to the Company Law Board. The
requirement of maintaining Liquid Assets against deposits maturing by
31st March, 2014 has not been complied with). According to the
information and explanations given to us, no order has been passed by
the Company Law Board or National Company Law Tribunal or Reserve Bank
of India or any Court or any other Tribunal, on the Company.
7. The internal audit reports covered only systems and processes for
the first quarter of the financial year which pointed out deficiencies
in procedures and internal control. Subsequent reports did not clarify
whether corrective steps are taken by the Company to rectify the
deficiencies and also did not cover the major areas of financial
transactions and internal control.
8. According to the information and explanations given to us and to
the best of our knowledge and belief, consequent upon notification of
the Companies (Cost Accounting Records) Rules, 2011, the Central
Government has prescribed audit of the cost records maintained by the
Company under Section 209(1) (d) of the Companies Act, 1956 for the
products of the Company from the current financial year.
9. a) The company has generally been regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor education protection fund, Employees'' State insurance
and Customs Duty, Excise Duty, Cess, wealth tax and other material
statutory dues as applicable to it. However, there have been delays in
payment of following statutory liabilities. The outstanding balance in
these accounts as at 31st March, 2013 was as follows:-
- Provident Fund -X12.60 Lacs.
- Income Tax i.e. Tax Deducted at source (TDS) X93.02 Lacs.
- Central Sales Tax - X99.23 Lacs.(Since paid Rs.0.65 Lacs)
- Maharashtra VAT - Rs.63.81 Lacs. (Since paid X11.87 Lacs)
- Service Tax - X22.74 Lacs
- Employees'' State Insurance - 0.50 Lacs (Since paid)
- Excise Duty - ^45.15 Lacs. (Since paid Rs.5.01 Lacs)
- Profession Tax - X0.29 Lacs (Since paid)
In our opinion and according to information and explanations given to
us, no undisputed amounts payable in respect of Income Tax, Wealth Tax,
Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears as at
31st March 2013 for the period of more than six months from the date
they became payable, except Income Tax Deducted at Source (TDS) -
Rs.40.38 Lacs, Central Sales tax - Rs.53.67 Lacs and Maharashtra VAT 60.68
Lacs; Service Tax - X7.20 Lacs.
b) According to the information and the explanations given to us, there
are no dues outstanding of Sales Tax, Custom Duty, Wealth Tax, Excise
Duty or cess applicable to it, which have not been deposited on account
of any dispute. However, according to the information and explanations
given to us, the following dues of Income tax have not been deposited
by the Company on account of dispute:-
Amount Period to Forum where
Name of the
Statute_ Nature of dues (Rs.) which it
relates dispute is
Act Penalty 3696564/- AY
2006-07 CIT (A)
Act Penalty 4900913/- AY
2007-08 CIT (A)
Act Penalty 4087154/- AY
2008-09 CIT (A)
10. The Company has accumulated losses at the end of the financial
year but it has not incurred cash losses in the financial year under
report. The Company suffered cash losses during the immediately
preceding financial year.
11. There have been delays in repayment of quarterly Installments of
Term Loans (Principle) taken from the bank for the processing division
of the company as follows:-
Due date Date of payment Amount Delay (Days)
30.06.2012 13.09.2012 2700000 75
30.06.2012 20.09.2012 3000000 82
30.06.2012 24.09.2012 700000 86
30.09.2012 15.12.2012 1000000 76
30.09.2012 17.12.2012 437000 78
30.09.2012 19.12.2012 1013000 80
30.09.2012 20.12.2012 1600000 81
30.09.2012 22.12.2012 75000 83
30.09.2012 26.12.2012 2275000 87
31.12.2012 28.03.2013 6400000 87
31.03.2013 Not paid 64000001
Installment oft64 Lacs for the month of March 2013 was unpaid as at the
balance sheet date. There have been regular delays in monthly payment
of Interest on the above said Term Loans ranging from 13 days to 87
There are no borrowings from Financial Institutions. Company has not
issued debentures during the year.
12. In our opinion and according to the information and explanations
given to us, the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
13. In our opinion, the Provisions of any special statute as specified
under clause (xiii) of paragraph 4 of the Order are not applicable to
14. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Order are not
applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the Company has not given any Guarantees for loans taken
by another company from Banks and hence the provisions of this clause
do not apply.
16. In our opinion, the term loans have been applied for the purpose
for which these were raised.
17. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet of the Company, we report
that the Company has not utilised its working capital funds for
acquiring Long Term assets. No long term funds have been used to
finance short term assets.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
year, to the parties covered in the register maintained under section
301 of the Companies Act, 1956, being the core promoters and promoter
19. The company has not issued any debentures during the year and
hence the provisions of clause (xix) of paragraph 4 of the Order are
not applicable to the company.
20. During the year covered by our Audit, the Company has not raised
any money by way of a public issue.
21. According to the information and the explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year. However, we are unable to determine / verify as to whether any
such reporting has been made, during the year.
For S S PURANIK & ASSOCIATES
SHRIPAD S PURANIK
M.Ship No. 030670
Date: May 30, 2013