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INDEPENDENT ADITORS' REPORT
TO THE MEMBERS OF JAIPRAKASH ASSOCIATES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Jaiprakash Associates Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, and the 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
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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting 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.
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. 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 the 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 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 controls 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 audit opinion on the financial statements.
Without qualifying our opinion, we draw attention to note 36(d) of the financial statements, relating to the order of the Competition Commission of India (CCI), concerning alleged contravention of the provisions of the Competition Act, 2002 and imposing a penalty of 7 132360 lacs on the Company. As per directions of the Competition Appellate Tribunal an amount of 7 13747 lacs has been deposited which will remain with them and not be disbursed during the pendency of the appeal. Based on the advice of the Company's counsels as well as its own assessment, the Company believes that it has strong grounds for the success of the appeal, and hence no provision has been considered necessary by the Company in this regard.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, and its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books.
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) 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.
f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position
in its financial statements – Refer Note 36 to the financial statements.
ii. The Company did 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 AUDITORS' REPORT
ANNEXURE referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date to the members of Jaiprakash Associates Limited on the accounts of the Company for the year ended 31st March 2015.
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:
(i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. The situation of the moveable assets used in the construction activity keeps on changing from works sites depending upon requirements for a particular contract.
b) A substantial portion of the Fixed Assets have been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company & nature of its assets. According to the information given to us and to the best of our knowledge, no material discrepancies were noticed on such physical verification.
c) i.As explained to us, the Inventory has been physically verified by the management at reasonable intervals during the year.
ii. In our opinion 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.
iii. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods /real estate, electrical energy services & supplies under EPC contracts. During the course of our audit we have not observed any major weakness in such internal control system.
(v) In our opinion and according to the information and explanations given to us the Company has not accepted any deposit during the year. The Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013; however, with regard to repayment of unpaid matured deposits which had matured for repayment on or before the balance sheet date and were outstanding as at 31st March 2015, the New Delhi Bench of the Hon'ble Company Law Board, vide its order dated 16.02.2015 and subsequent orders for extension of time, the last order being issued on 16.09.2015, has granted time upto 31.12.2015 to repay the balance of unpaid deposits matured as at 31.03.2015 and deposits matured after 31.03.2015.
(vi) We have broadly reviewed the accounts and cost records maintained by the Cement, Power & Real Estate divisions of the Company as prescribed by the Central Government under section 148(1) of the Companies Act, 2013, and are of the opinion that prima–facie the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records.
(vii) (a) As per records produced before us and according to the information and explanations given to us the Company is generally regular in depositing undisputed statutory dues applicable to it like, Provident Fund, Employees' State Insurance, Income–tax, Service Tax, Sales Tax/ Value Added Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities, and there were no arrears of such dues at the end of the year which have remained outstanding for a period of more than six months from the date they became payable, except for royalty on limestone amounting to 7 858 lacs and electricity duty 7 241 lacs.
(b) As per records produced before us and according to the information and explanations given to us there are no dues of Income–tax, Sales–tax, Wealth tax, Service Tax, Customs duty, Excise Duty, Value Added Tax or Cess which have not been deposited on account of any dispute, except for the following:
(c) There are no amounts that were due for being transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and Rules made thereunder.
(viii) The company does not have any accumulated losses at the end of the financial year, and has incurred cash losses amounting to 7 61792 lacs during the financial year covered by our audit and cash losses amounting to 7 Nil in the immediately preceding financial year.
(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holder, except (a) some instances of delay in payment of interest to financial institutions, banks and debenture holders ranging for a period from 24 day to 119 days, which have been subsequently made good, (b) over–due interest on borrowings amounting to 7 58008 lacs which is outstanding as at 31st March 2015 for a period of 1 to 83 days and which is being reflected under Note No. 10 – 'Other Current Liabilities' in the financial statements, and (c) over–due principal repayments of borrowings amounting to 7 53812 lacs which is outstanding as at 31st March 2015 for a period of 16 to 83 days and which is being reflected under Note No. 10 – 'Other Current Liabilities' in the financial statements.
(x) In our opinion and according to the information and explanations given to us, where the Company has given guarantee for loans taken by its subsidiaries from banks or financial institutions, the terms and conditions thereof are not prejudicial to the interest of the company.
(xi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.
(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.
For M. P. SINGH & ASSOCIATES
Firm Registration Number 002183C
(CA. Ravinder Nagpal)
Place : Noida
Dated : 14th November, 2015