IAG Glass Company Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2010

1. We have audited the attached Balance Sheet of IAG COMPANY LIMITED as at 31st March, 2010, the Profit & Loss Account and also 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.

2. We conducted our audit in accordance with the 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditor Report Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, on the basis of such checks as we considered appropriate, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. We further report that:

(a) Accumulated losses of Rs. 836.38 lakhs adjusted in the earlier years against Revaluation Reserve on certain fixed assets and the treatment was against the accounting policies laid down by the Institute of Chartered Accountants of India. Out of the profits of the current year a sum of Rs. 111.53 lakhs is reinstated (Sch.K, Note No. 5). We have been informed that the balance would be reinstated as soon as surplus is available.

(b) As stipulated by the State Bank of India, Unsecured loans of Rs. 24.50 crores obtained by the Company have not been converted into Non Convertible 0% Dividend paying Preference Shares within March, 2010.

(c) Gratuity premium of Rs. 22.76 lakhs claimed by L.I.C. during the year for 2008-09 have not been paid Rs. 72.40 lakhs paid to the Gratuity Fund by the Company by cheque against repayment of loans during the year is yet to be cleared. We are unable to comment whether any further provision of gratuity is required for 2009-2010.

(d) No interest has been provided from September 2009 onwards on the Secured Loan of Rs. 41.69 lakhs for purchase of pay-loader and D.G. Set and the loan balance is not confirmed. As per the Companys books instalments for the period from January, 2010 to March, 2010 is due for payment.

(e) Total temporary overdrawn of Rs. 34.07 lakhs from several banks is without any arrangement and the same has been grouped under "Other Liabilities" Schedule-G. Chargeable expenses being 10% of net profit earned by the Company have not been provided against Inter Corporate Loan of Rs. 2767 lakhs received from four companies.

(f) In absence of reconciliation and balance confirmation from debtors, creditors advances and deposits we have relied on book balances and is subject to scrutiny. Some balances appear to be subject to adjustment and doubtful of recovery. We are unable to quantify the same at this stage.

(g) The accounts of the Company have been prepared on a going concern concept basis. The current management of the Company has injected substantial funds to improve the Mure profitability of the company.

(h) No. T.D.S. has been deducted on professional and consultancy fees of Rs. 9 lakhs.

(i) Service Tax input balance needs reconciliation and adjustment with Excise Records.

(5) Further to our comments above, 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 Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account as produced before us.

(d) 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 EXCEPTNON PROVISION OF LEAVE ENCASHMENTAND BONUS (SCHEDULE-K, NOTENO. -4) & NON PROVISION OF IMPAIRMENT LOSS OF FIXED ASSETS, INVENTORIES EXCEPTING FINISHED GOODS AND GOODS-IN- PROCESS ARE VALUED AS PER CLOSING PRICE AS ON 31.03.2010 INSTEAD OF WEIGHTED AVERAGE PRICE. THE FINANCIAL IMPACT OF THE SAME COULD NOT BE ASCERTAINED AT THIS STAGE. NON- PROVISION OF GRATUTY (SCHEDULE-K, NOJE - 22).

(e) On the basis of written representation received from the Directors, as on 31 st March,2010, and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as Directors under section 274(1 )(g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts subject to paras 4 & 5 above and read together with the schedules, notes and significant accounting policies thereon, and attached thereto give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(ii) in the case of Profit & Loss Account, of the Profit for the year ended on that date and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of the Auditors Report of even date)

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

(b) The Fixed assets have been physically verified by the Company at the year end and we are of opinion that the said verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The inventory have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As certified by the management, no material discrepancies were noticed on such physical verification.

(b) In our opinion and according to the information and explanations given to us, the procedure 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) On the basis of technical assessment and our examination of records of inventories, the Company has maintained proper records of inventory. The Companys Stores Records need improvement.

(iii) (a) The Company has taken unsecured loan from three companies and the same has been entered in the register maintained under section 301 of the Companies Act ,1956.

(b) The Company has not granted any loans, secured or unsecured to Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, the company has taken up proper steps to improve internal control procedures to make it commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets, stock and consumption of Raw Materials and for the sale of goods. During the course of our verification, we have not come across any continuing failure to correct the major weakness in the internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements exceeding the value of Rupees Five Lakhs are prima facie at prices which are reasonable having regard to the prevailing market price at the relevant time.

(vi) According to the information given to us, the Company has not accepted any deposits from the public.

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

(viii) The maintenance of cost records have hot been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products.

(ix) (a) As certified by the management, following statutory dues are outstanding for more than six months as at the end of the financial year.

(Rs.in lakhs)

Provident Fund 52.11

Interest on Employees Siat3 Insurance 9.79

T.D.S. 15.37

Sales Tax 30.96

Consumer Durable Loan 19.56

Recurring Deposit / CTD 17.21

Salaries & Wages (Factory) 49.47

Statutory Bonus (2008-09)(2009-10 amount not ascertained) 12.56

Salaries (H.O.) 24.07

LIC (Factory) 32.61

(b) According to the records of the Company, the under noted dues of Sales Tax, Income Tax, Excise Duty and

Provident Fund are pending on account of disputes :

Name of the Nature of Dues Amount Statute (Rs. in Lakhs)

1. The Central Excise Excise Duty Unascertainable Act Leviable on special packing & forwarding

2. Income Tax Act, Exchange Unascertainable 1961 Fluctuation Losses on foreign currency loan

3. The Employees Penal Damage 214.68 (Net of Provident Fund & Deposit of Rs. 25 Misc. Act, 1952 lakhs)

4. West Bengal Sales Import of Machinery 26.01 Tax Act, 1949 for repair Treated as turnover (exparte)



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

The Central Excise Act 1987 CEGAT - DELHI

Income Tax Act, 1961 1989-1990 IT Deptt. to 1992 -1993

The Employees Provident Fund & Misc. Act, 1952 April 2001 to Employees P.F. September 2004 appellate Tribunal, New Delhi

West Bengal Sales Tax Act, 1949 2003-04 West Bengal Sales Tax Tribunal remanded tack to Department for examination

(x) The Company has no accumulated losses as at the beginning ot the financial year. The Company has not incurred any cash losses during the current financial year. However, the Company had incurred cash losses during the immediately preceding financial year. Unqualified audit qualifications could not be taken into consideration in computing the above.

(xi) As notified by the bank, the Company is not regular in repayment of dues to the bank.

(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) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund / Society.

(xiv) As explained to us, the Company has maintained proper records of the transactions and contracts of the shares dealt in by the Company and timely entries have been made therein. The investments in shares made by the Company are held in its own name except to the extent of exemptions under Section 49 of the Act.

(xv) According to the information and explanations given to us and to the best of our knowledge, the Company has not given any guarantees of loans taken by others from banks or financial institutions during the year.

(xvi) The Company has availed long term loan from Scheduled Bank during the year and the said loan was applied for the purpose for which the loan was obtained.

(xvii) Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, there are no funds raised on short-term basis, which have been used for long-term investments.

(xviii) According to the information and explanations given to us, 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) The Company has not issued any debenture during the year.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no-fraud on or by the Company has been noticed or reported during the course of our audit for the year.

For D. BASU & CO.

Chartered Accountants

10, Old Post Office Street, Malay Bhaduri

Kolkata 700001 Partner

Date : 31st May, 2010 Membership No. 12724