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Jai Balaji Industries Ltd.

BSE: 532976 Sector: Metals & Mining
NSE: JAIBALAJI ISIN Code: INE091G01018
BSE 15:16 | 25 Mar 26.70 -1.40
(-4.98%)
OPEN

29.50

HIGH

29.50

LOW

26.70

NSE 15:04 | 25 Mar 26.75 -1.40
(-4.97%)
OPEN

29.55

HIGH

29.55

LOW

26.75

OPEN 29.50
PREVIOUS CLOSE 28.10
VOLUME 59311
52-Week high 29.50
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 257
Buy Price 26.70
Buy Qty 75.00
Sell Price 26.70
Sell Qty 17918.00
OPEN 29.50
CLOSE 28.10
VOLUME 59311
52-Week high 29.50
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 257
Buy Price 26.70
Buy Qty 75.00
Sell Price 26.70
Sell Qty 17918.00

Jai Balaji Industries Ltd. (JAIBALAJI) - Auditors Report

Company auditors report

To The Members of

JAI BALAJI INDUSTRIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of JAI BALAJIINDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2018 the Statement of Profit and Loss and Cash Flow Statement for the yearended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Basis for Qualified Opinion

Referring to Note – 38 of the financial statement company has not provided forinterest amounting to ` 83288.81 lacs of which

` 43744.25 lacs pertains to the current financial year on various loans &credit facilities availed from banks & financial institution on the ground that sameis being treated as Non Performing Assets by the lenders. Due to this loss for the currentfinancial year has been understated by ` 43744.25 lacs and accordingly loss forthe year ended 31st March 2018 would've been ` 69410.31 lacs instead of `25666.06lacs.

Qualified Opinion

Except for the possible effects of the matters described in "Basis for QualifiedOpinion" in our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2018 and its losses and its cash-flows for theyear ended on that date.

Emphasis of Matter

We want to draw attention of the users of the financial statements on followingmatters:

1. As explained in Note – 39 of the financial statement company has beenincurring losses and its net worth is completely eroded also its current liabilityexceeds current assets by ` 328544.25 lacs. However the financial statements of thecompany have been prepared on a going concern basis and accordingly Deferred Tax Assetsamounting to `29085.14 lacs created up to 31st March 2015 has been carried forward.

2. As explained in Note – 55(a) of the financial statement regardingde-allocation of coal blocks by Hon'ble Supreme court vide its order dated 24th September2014 pending finalization of the compensation receivable for the cancelled mines thebook values of investment in mining assets has been brought down to a nominal value of Re.1 per share.

3. We further want to draw attention on Note 55(b) of the financial statementsregarding transfer of control in 100% subsidiary M/s Nilachal Iron & Power Limitedduring the current financial year. The entire shares in M/s Nilachal Iron & PowerLimited were taken over by the Asset Reconstruction Company in order to settle the loanfrom IFCI Ltd excluding 600 shares held by the company as beneficiary shareholder andtherefore the accounts of M/s Nilachal Iron & Power Limited have not been consolidatedwith the accounts of the company. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the ‘Annexure A' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

II. As required by Section 143 (3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b. in our opinion proper books ofaccounts as required by law have been kept by the Company so far as it appears from ourexamination of those books. c. the Balance Sheet the Statement of Profit and Loss and theCash Flow Statement dealt with by this Report are in agreement with the books of account.d. in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014. e. on the basis of the written representationsreceived from the Directors as on 31st March 2018 taken on record by the Board ofDirectors none of the Directors is disqualified as on 31st March 2018 from beingappointed as a director in terms of Section 164 (2) of the Act. f. with respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate report in‘Annexure B'; g. with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous: i. the Company has disclosed the impact of pending litigations on its FinancialPosition in its financial statements - Refer Note No. 35A to the financial statements. ii.the Company did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii. there has been no delay in transferringamounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

For S. K. AGRAWAL & CO.
Chartered Accountants
Firm's Registration No-306033E
(J. K. CHOUDHURY)
Place : Kolkata Partner
Dated : June 30 2018 Membership No: 009367

Annexure - A to the Independent Auditors' Report

The Annexure referred to in our Independent Auditor's Report to the members of JAIBALAJI INDUSTRIES LIMITED (‘the Company') on the standalone financial statementsfor the year ended on 31st March 2018. We report that: i. (a) The Company has maintainedproper records showing full particulars including quantitative details and situation offixed assets (b) The Company has a regular program of physical verification of its fixedassets by which fixed assets are verified in a phased manner over a period of three years.In accordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

(c) According to information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company. ii. The inventories have been physically verified duringthe year by the management at regular intervals. In our opinion and according to theinformation and explanations given to us no material discrepancies were noticed onphysical verification. iii. According to information and explanation given to us and onthe basis of our examination of the records of the Company the Company has grantedunsecured loans to one company covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act'). Accordingly we report that:-

(a) The terms and conditions of such loans are prima facie prejudicial to thecompany's interest in respect to loan granted to a company.

(b) The above loans are re-payable on demand. iv. In our opinion andaccording to the information and explanations given to us the Company has complied withthe provisions of sections 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and securities made. v. The Company has not accepted any depositsfrom the public. Accordingly paragraph 3(v) of the Order is not applicable. vi. We havebroadly reviewed the books of account maintained by the Company pursuant to the rulesprescribed by the Central Government for maintenance of cost records under section 148 (1)of the Act and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. vii. According to the information and explanations given tous in respect of statutory dues: (a) The Company has not been regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance IncomeTax Service Tax Value Added Tax duty of Excise Cess and other statutory dues with theappropriate authorities during the year.

According to the information and explanations given to us the following undisputedamounts payable in respect of the aforesaid dues were outstanding as at 31st March 2018for a period of more than six months from the date they became payable:-

Name of statute Nature of Dues Amount Outstanding (` in Lacs) Period to which amount relates
Income Tax Act 1961 TDS 474.46 April'16 to September'17
Finance Act 1994 Service Tax 214.13 September'16 to June'17
The Central Excise Act 1944 Excise Duty 2477.82 May'15 to May'17
Provident Fund Act 1952 Provident Fund 742.26 May'16 to September'17
Employee State Insurance Act 1948 ESI 5.10 April'17 to September'17
Finance Act 1994 Swachh Bharat Cess 10.22 September'16 to June'17
Finance Act 1994 Krishi Kalyan Cess 2.35 September'16 to June'17
Punjab Value Added Tax Act Value Added Tax 53.57 September'13 to February'14

(b) According to information and explanations given to us the following dues of incometax sales tax duty of excise duty of custom service tax and value added tax have notbeen deposited by the Company on account of disputes:

Name of the statute Nature of dues Amount under dispute not yet deposited (` in lacs) Financial year to which the amount relates Forum where dispute is pending
The Central Excise Duty 26021.16 2007-08 to 2017-18 CESTAT
Excise Act 1944 Commissioner
(Appeals)
Finance Act 1994 Service Tax 776.72 2010-11 to 2017-18 CESTAT Commissioner (Appeals)
Custom Act 1962 Custom Duty 1742.28 2016-17 & 2017-18 CESTAT Commissioner (Appeals)
The West Bengal Sales Tax Act 1994 Sales Tax 3.59 2004-05 West Bengal Appellate & Revisional Board
The Central Sales Tax Act 1956 Central Sales Tax 705.58 2006-07 to 2014-15 West Bengal Appellate & Revisional Board
The West Bengal Value Added Tax Act 2003 Value Added Tax 1672.71 2005-06 to 2014-15 West Bengal Appellate & Revisional Board
The Uttar Pradesh Value Added Tax Act 2007 Value Added Tax 5.51 2014-15 2015-16 Joint Commissioner (Appeals)
The Income Tax Act 1961 Income Tax 6.85 2008-09 DCIT/CIT(A)

viii. In our opinion and according to information and explanations given by themanagement we are of the opinion that the Company has defaulted in the repayment of duesto banks and financial institution during the year at different maturities as givenbelow:-

(` in lacs)

Default of Principal

Default of Interest*

Banks
Less than 1 year** More than 1 year Less than 1 year More than 1 year
Bank of India 9622.85 3304.17 Nil 2982.71
Canara Bank 2750.41 370.60 Nil 211.29
Corporation Bank 1026.81 608.05 Nil 517.92
Federal Bank 342.44 57.31 Nil 3.46
Indian Overseas Bank 16054.10 2110.64 Nil 785.27
IDBI Bank 873.14 154.55 Nil 29.25
Oriental Bank of Commerce 24718.50 1412.43 Nil 328.67
Punjab National Bank 2324.52 435.70 Nil 66.20
State Bank of India 80878.80 5879.52 Nil 1027.93
United Bank of India 21815.40 3843.17 Nil 1062.42
Vijaya Bank 3847.12 2230.33 Nil 2077.51
Total 164254.07 20406.47 Nil 9092.63

 

Default of Principal

Default of Interest*

Financial Institution
Less than 1 year** More than 1 year Less than 1 year More than 1 year
WBIDFC 3215.36 1145.81 Nil 589.28
Total 3215.36 1145.81 Nil 589.28

*above figures doesn't include interest amounting to `83288.81 lacs of which `43744.25 lacs pertains to financial year 2017-18 and ` 39544.56 lacs for thefinancial year 2016-17 as interest has not been provided in the books as mentioned inNote – 38 of the financial statements.

**The lenders have initiated the recovery procedures and have already served the callup notice for their exposure. Therefore instead of structured repayment schedule theentire exposure of the banks/ financial institution has fallen due on immediate basis.

ix. To the best of our knowledge and belief and according to the information andexplanations given to us during the year the Company did not avail any term loan facilityfrom bank or financial institution. Also Company did not raise any money by way of initialpublic offer or further public offer (including debt instruments) during the year.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanation given by the management the companyhas not paid remuneration over and above the limits prescribed under section 197 readwith Schedule – V of the act to executive director.

Accordingly paragraph 3(xi) of the Order is not applicable.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian Accounting Standards (Ind AS).

xiv. According to the information and explanations given to us and based on ourexamination of the records the Company has made private placement of shares during theyear under review and the requirements of section 42 of the Act have been complied with.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For S. K. AGRAWAL & CO.
Chartered Accountants
Firm's Registration No: 306033E
(J. K. CHOUDHURY)
Place : Kolkata Partner
Dated : June 30 2018 Membership No: 009367

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s JaiBalaji Industries Limited ("the Company") as of 31st March 2018 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S. K. AGRAWAL & CO.
Chartered Accountants
Firms Registration No: 306033E
(J. K. CHOUDHURY)
Place : Kolkata Partner
Dated : June 30 2018 Membership No: 009367