To the Members of Jai Corp Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Jai Corp Limited("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flow for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2019 and profit including other comprehensive income the changes in equity andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Companies Act 2013 ("theAct"). Our responsibilities under those Standards are further described in the"Auditor's Responsibilities for the Audit of the Financial Statements" sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matters ||How our audit addressed the key audit matter |
|(i) Inventories || |
|As of 31st March 2019 inventories appear on the financial statements for an amount of Rs. 7453.76 Lakh which constitutes 39% of the total current assets. As indicated in Note no. 1(h) to the financial statements inventories are valued at the lower of cost and net realizable value: ||Our audit procedures included the following: Reviewing the Company's process and procedures for physical verification of inventories at year end. Assessing the methods used to value inventories and ensuring ourselves of the consistency of accounting methods. |
|The Company may recognize an inventory allowance if inventory items are damaged if the selling price has declined or if the estimated costs to completion or to be incurred to make the sale have increased. || Reviewing of the reported acquisition cost on a sample basis. Analyzing of the Company's assessment of net realizable value as well as reviewing of assumptions |
|We focused on this matter because of the: Significance of the inventory balance. Complexity involved in determining inventory quantities on hand due to the number location and diversity of inventory storage locations. ||and calculations for stock obsolescence. Assessing of appropriateness of disclosures provided in the financial statements. |
| Valuation procedure including of obsolete inventories. || |
|(ii) Litigations & Contingent liabilities ||Our audit procedures included the following: |
|The Company is subject to number of legal and tax related claims which have been disclosed / provided for in the standalone financial statements based on || Reviewing the process of identification of claims litigations and contingent liabilities. |
|the facts and circumstances of each case. There is a high level of judgment required in estimating the level of provisioning required and appropriateness of disclosure of contingent liabilities. || Reviewing the Company's legal and tax cases and assessed management's position through discussion on both the probability of success in significant cases and the magnitude of any potential loss. |
|Refer to Note 1(q) "Significant Accounting Policies" and Note 41 - "Contingent Liabilities and Commitments" of the standalone financial statements. || Discussion with the management on the development in theses litigations during the year ended 31st March 2019. |
| || Verifying that accounting and /or disclosure as the case may be in the standalone financial statements is in accordance with the assessment of management. |
| || Obtaining representation letter from the management on the assessment of those matters as per SA 580 (revised) - written representations. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the management discussion & analysis and director's reportincluded in the annual report but does not include the financial statements and ourauditor's report thereon. The above information is expected to be made available to usafter the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the above other information if we conclude that there is materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of financial position financial performance cash flows and changesin equity of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) prescribed under section 133of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintaince of accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent year and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under section 133 of the Act read with relevant rules issuedthereunder.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A";
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid/provided by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to in Note no. 41 to the financialstatements.
(b) The Company does not have long term contracts including derivative contracts forwhich there were any material foreseeable losses
(c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
2. 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 "Annexure B" hereto a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
For D T S & Associates
Chartered Accountants Firm Registration No: 142412W
Place: Mumbai Date: 24th May 2019
"ANNEXURE A" TO INDEPENDENT AUDITORS'
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date to the members of Jai Corp Limited on theStandalone financial statements for the year ended 31st March 2019)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Jai CorpLimited ("the Company") as of 31st March 2019 in conjunctionwith our audit of the Standalone financial statements of the Company for the year ended onthat 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 and the Standards on Auditing prescribed under Section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlsover financial reporting and such internal financial controls over financial reportingwere operating effectively as at 31st March 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by ICAI.
For D T S & Associates
Chartered Accountants Firm Registration No: 142412W
Place: Mumbai Date: 24th May2019
"ANNEXURE B" TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of Jai CorpLimited on the Standalone financial statements for the year ended 31st March2019)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b. As explained to us the Company has physically verified fixed assets in accordancewith a phased program of verification which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. No material discrepancies werenoticed on such physical verification as compared with the available records.
c. As per the information and explanation provided to us and the records examined by usand based on the examination of the registered sale deed/ conveyance deed we report thatthe title deeds comprising all the immovable properties of land and building which arefreehold are held in the name of the Company as at the balance sheet date and which areleasehold the lease agreements are in the name of the Company where the Company is thelessee in the agreement except the following:-
|Particulars ||Actual Cost as at 31st March 2019 (Rs. in Lakh) ||Net Block as at 31st March 2019 (Rs. in Lakh) ||Remarks |
|Freehold/ Leasehold land (No of Lands: 7) ||44.86 ||41.23 ||The title deeds are in the names of erstwhile Companies that merged with the Company under Section 391 to 394 of the Companies Act 1956 pursuant to Schemes of Amalgamation and Arrangement as approved by the Honorable High Court. |
|Buildings (No of Buildings: 5) ||8.85 ||5.00 ||Out of Rs. 8.85 Lakh the title deeds of Rs. 4.45 Lakh are in the name of erstwhile companies that merged with the Company under Section 391 to 394 of the Companies Act 1956 pursuant to Schemes of Amalgamation and Arrangement as Approved by the honorable high Court. |
ii. In respect of its inventories:
As explained to us inventories except goods in transit have been physically verifiedduring the year by the management. In our opinion the frequency of verification isreasonable. Discrepancies noticed on physical verification of the inventories between thephysical inventories and book records were not material having regard to the size of theoperations of the Company and the same have been properly dealt with.
iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in register maintained undersection 189 of the Act. Therefore the provisions of the clause (iii) of paragraph 3 ofthe Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of sections 185 & 186 of the Act asapplicable in respect of investments.
v. According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of clause (v) of paragraph3 of the Order are not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant toCompanies (Cost Records & Audit) Rules 2014 prescribed by Central Government undersection 148 (1) (d) of the Act as applicable and are of the opinion that prima-facie theprescribed accounts and records have been made and maintained. We have not however made adetailed examination of the records with a view to determine whether they are accurate andcomplete.
vii. According to the information and explanations given to us in respect of statutorydues:
a. The Company has been generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax Goods & service taxcess and any other statutory dues to the appropriate authorities as applicable during theyear. According to the information and explanations given to us no undisputed amountspayable in respect of such statutory dues were outstanding as at 31st March2019 for a period of more than six months from the date they became payable.
b. Details of dues of Income tax Sales tax / Value added tax aggregating to Rs.1689.90Lakh that have not been deposited on account of disputed matters pending beforeappropriate authorities are as under:
|Name of the Statute ||Nature of the Dues ||Amount (Rs. in Lakh)* ||Period to which the amount relates ||Forum where dispute is pending |
|Income-tax Act1961 ||Income Tax ||204.01 ||AY 2003-04 to AY 2005-06 & AY 2007-08 AY 2010-11 to 2011-12 & AY 2013-14 ||ITAT |
| || ||1098.75 ||AY 2006-07AY 200910 & AY 2015-16 ||Commissioner of Income Tax (Appeal) |
| || ||280.94 ||AY 2016-17 ||Assessing Officer (AO) |
|Central Excise Act 1944 ||Excise Duty ||79.92 ||2001 to 2004 ||Commissioner (Appeal) - GST & Central Excise |
|Bombay Sales Tax Act ||Sales Tax ||26.28 ||2000-01 & 2002-03 ||Maharashtra Sales Tax Tribunal |
|Total || ||1689.90 || || |
(*) Net of deposited under protest and adjusted against refunds.
viii. Based on our audit procedures and according to the information and explanationsgiven by the management we are of the opinion that the Company has not defaulted inrepayment of dues to banks. During the year the Company did not have any loans fromfinancial institutions or by way of debentures.
ix. According to the information and explanations given to us during the year theCompany has not raised any money by way of initial public offer further public offer(including debt instruments) and no term loans raised during the year. Thereforeprovisions of clause (ix) of paragraph 3 of the Order are not applicable to the Company.
x. Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and on the basis of information and explanationsgiven by the management no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.
xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us Company's transactionswith the related parties are in compliance with section 177 and 188 of the Act asapplicable and details of such transactions have been disclosed in the financialstatements as required by the applicable Indian accounting standards.
xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company during the year the Company has not raised anymoney by preferential allotment or private placement of share or debentures. Thereforethe provisions of clause (xiv) of paragraph 3 of the Order are not applicable to theCompany.
xv. According to the information and explanations given to us during the year theCompany has not entered into any non-cash transactions with directors or persons connectedwith him Therefore the provisions of clause (xv) of paragraph 3 of the Order are notapplicable to the Company.
xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For D T S & Associates
Chartered Accountants Firm Registration No: 142412W
Membership No. 122179
Place: Mumbai Date: 24th May 2019