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Jindal Poly Films Ltd.

BSE: 500227 Sector: Industrials
NSE: JINDALPOLY ISIN Code: INE197D01010
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NSE 09:29 | 28 Jun 989.00 -8.80
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OPEN 999.50
PREVIOUS CLOSE 997.35
VOLUME 687
52-Week high 1444.40
52-Week low 840.10
P/E 3.89
Mkt Cap.(Rs cr) 4,349
Buy Price 991.75
Buy Qty 1.00
Sell Price 993.80
Sell Qty 16.00
OPEN 999.50
CLOSE 997.35
VOLUME 687
52-Week high 1444.40
52-Week low 840.10
P/E 3.89
Mkt Cap.(Rs cr) 4,349
Buy Price 991.75
Buy Qty 1.00
Sell Price 993.80
Sell Qty 16.00

Jindal Poly Films Ltd. (JINDALPOLY) - Auditors Report

Company auditors report

To the Members of Jindal Poly Films Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Jindal PolyFilms Limited ("the Company") which comprise the Balance sheet as at March31 2021 the Statement of Profit and Loss including Other Comprehensive Income theStatement of Changes in Equity and the Cash Flow Statement for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 its profit including othercomprehensive income the changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs)as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor’sResponsibilities for the Audit of the Standalone Financial Statements’ section of ourreport. We are independent of the Company in accordance with the ‘Code ofEthics’ issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit financial statements under theprovisions of the Act and the Rules there under and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Other Matter

Owing to the COVID-19 related lock-down we were unable to participate in physicalverification of inventories carried out by the management at the year-end. Consequentlywe have performed alternative audit procedures to obtain comfort over the existence andcondition of inventory at the year-end as per guidance provided by SA 501 "AuditEvidence Specific Consideration for Selected Items" and have obtained sufficientaudit evidence. Our opinion is not modified in respect of above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2021. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed the matter is provided in that context. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

S.N. Key Audit Matter Auditor’s Response
1. Valuation of inventories How our audit addressed the key audit matter:
We refer to Note 8 and 2 (p) to the financial statements. As at March 31 2021 the total carrying amount of inventories wasRs.70093.52lakhs. We have checked and analyzed the ageing of the inventories reviewed the historical trend on whether there
assessment of impairment of inventories involves significant estimation uncertainty subjective assumptions and the application of significant judgment. Reviews are made periodically by management on inventories for obsolescence and decline in net realizable value below cost. The written off or reversal of thewere significant allowances for inventory obsolescence.
Allowances are recorded against the inventories for any such declines based on historical obsolescence and slow-moving history. Key factors considered include the nature of the stock its ageing shelf life and turnover rate. We conducted a detailed discussion with the key management and considered their views on the adequacy of allowances for inventory obsolescence considering the current economic environment. We have also reviewed the subsequent selling prices in the ordinary course of business andcompared against the carrying amounts of the inventories on a sample basis at the reporting date.
Our Observations:
We found management’s assessment of the allowance for inventory obsolescence to be reasonable based on available evidence

 

2. Valuation of Current and Non-Current Investments How our audit addressed the key audit matter:
Investments As disclosed in Note 4 &9 to the financial statements. As at March 31 2021 the total carrying amount of total investments were Rs. 45280.90 Lakhs. Investments mainly includes mutual funds. Our audit procedures included updating our understanding of the processes employed by the Company for accounting and valuing their investments. We have reviewed year end confirmation of mutual fund and depository participants.
Fair valuation of unquoted current investments involves significant estimation uncertainty subjective assumptions and the application of significant judgment. This was an area of focus for our audit and the area where significant audit effort was directed. We have verified that the Company was the recorded owner of all investments. Our audit procedures over the valuation of the Investments included reviewing valuation of all Investments held at March 31 2021.We have reviewed that investments where probability of realization is very low should not be carried forward.
Our Observation:
Based on the audit procedures performed we are satisfied with existence and valuation of investment at March 31 2021.

Other Information

The Company’s Board of Directors are responsible for the other information. Theother information comprises the information included in the Company’s annual reportbut does not include the standalone financial statements and our auditor’s reportthereon. The annual report is expected to be made available to us after the date of ouraudit report. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Whenwe read the Annual Report if we conclude that there is a material misstatement thereinwe are required to communicate the matter to those charged with governance and takenecessary actions as applicable under the applicable laws and regulations.

Responsibilities of Management 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 preparation ofthese Financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and statement ofchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the StandaloneFinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone 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 standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast continue as a going concern. If weconclude that a material uncertainty significant exists we are required to draw attentionin our auditor’s report to the related disclosures in the financial or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure financial statements including the andcontent of the standalone disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A"a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. 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 the Statement of Change 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 standalone financial statements comply with theIndian Accounting Standards (Ind AS) read with the Companies (Indian Accounting Standards)Rules 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016 as amendedspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2013;

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company with reference to these standalone financialstatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure B" to this report;

(g) In our opinion the remuneration paid /provided by the Company to its directorsduring the year is in accordance with the provisions of section 197 (16) 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 as amended 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 standalone financial statements Refer Note 40.1 to the standalonefinancial statements;

ii. The Company has made provision for material foreseeable losses on long-termcontracts including derivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Bimal Kumar Sipani
Partner
Place: Noida (Delhi-NCR) Membership No. 088926
Date: May 28 2021 UDIN:21088926AAAAGV7877

Annexure A referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re: Jindal Poly Films Limited)

(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipment except in case oflands which is in process of reconciliation with title deeds (Registry documents).

b. The Company has a regular programme of physical verification of its property plantand equipment by which a phased manner over a period of three years which in propertyplant and equipment are verified our opinion is reasonable having regard to the size ofthe Company and nature its property plant and equipment. However physical verificationof property plant & equipment was not conducted during the year as required under theprogramme.

c. The title deeds of all the immovable properties included under the head‘Property plant and equipment’ are held in the name of the Company except freehold land (to the extent reconciled) having gross value of Rs. 45.70 lakhs for whichregistration in the name of the company is pending. Further lands are in process ofreconciliation with title deeds (Registry documents). In view of pending reconciliation oflands we are not in position to comment whether or not all lands are register in the nameof the Company.

(ii) The management has conducted physical verification of inventories except stock intransit during the year at reasonable interval and no material discrepancies were noticedon such physical verification.

(iii) The Company has granted unsecured loans during the year to two companies coveredin the register maintained under Section 189 of the Companies Act 2013. The terms andconditions of the grant of such loans are not prima facie prejudicial to the interest ofthe Company. The Company has stipulated schedule of repayment of principal and payment ofinterest and repayment of principal and interest are regular wherever applicable. TheCompany has not granted any loan to Firms Limited Liability Partnership or any otherparties covered in the register maintained under section 189 of the Companies Act 2013.

(iv) The Company has complied with provisions of Section 186 of the Companies Act 2013in respect of loan granted and investments made during the year. There is no loan grantedor guarantee or security provided under section 185 and no guarantee or security providedunder section 186 of the Companies Act 2013 during the year.

(v) The Company has not accepted any deposit covered under sections 73 to 76 of theCompanies Act 2013and the Companies (Acceptance of Deposits) Rules 2014 (as amended)during the year. Therefore provisions of clause

Note to the Standalone Financial Statement

3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of the Company’s products towhich the said rules are applicable and are of the opinion that prima facie theprescribed records have been made and maintained. We have not however made a detailedexamination of the said records with a view to determine whether they are accurate orcomplete.

(vii) a. According to the records of the Company the Company is generally regular indepositing amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including provident fund employees’ state insurance income-taxgoods and service tax sales tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues where applicable with the appropriateauthorities. There was no undisputed outstanding statutory dues as at the yearend for aperiod of more than six months from the date they became payable.

b. According to the records of the Company and information and explanation given to usthere are no dues outstanding of income tax sales tax service tax goods and servicetax duty of customs duty of excise and value added tax on account of any dispute otherthan the followings:

Name of Statue Nature of Dues Period to which it relates Amount (Rs. in Lakhs)* Forum where dispute is pending
Disallowance of expenses and other deductions 1993-1994 52.60 ITAT- Delhi
Disallowance of expenses and depreciation 1999-2000 391.45 CIT(A)- Ghaziabad
The Income Tax Act1961 Disallowance of expenses 2006-07 to 2009-10 68.57 ITAT- Delhi
Disallowance of expenses 2016-17 1309.66 CIT(A)- 22 Delhi
Addition on account of unexplained credit u/s 68 2012-2013 289.52 CIT(A)- 22 Delhi
Disallowance u/s 14A 2014-2015 28.11 CIT(A)- 22 Delhi
Disallowance u/s 14A and other expenses 2017-2018 1385.24 CIT(A)- 22 Delhi
Sales Tax Act Purchase against Form A disallowed 2005-06 2.41 Sales Tax Tribunal Nasik
Duty on Import of secondhand machinery 2002-03 366.00 Hon'ble Supreme Court
The Central Excise Act 1944 Duty on Supply of materials 2002-03 6.60 Commissioner Nashik
Disallowance of Cenvat Credit 2012-13 124.99 CESTAT Mumbai
Disallowance of Cenvat Credit on Commission 2015-16 473.05 Commissioner Nashik
The Custom Act 1962 Mar2006 26.46 Commissioner Delhi
Import of Spare parts under EPCG Licence Jun2003-May2008 82.57 CESTAT Mumbai
Spet2006 - Dec2008 85.56 CESTAT Mumbai
Disallowance of Rebate 2013-2014 to 2017-18 438.99 CGST Delhi
The CGST Act2017 Exemption from Additional Duty of Custom (equivalent to GST) availed on import of the raw materialsnot allowed Nov. 2017 to Feb. 2018 106.27 Directorate of Revenue Intelligence Kolkata

* Net of deposit.

(viii) The Company has not defaulted in repayment of dues to banks and financialinstitution. The Company did not have any borrowing from Government and dues to debentureholders.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Term loans raised during theyear were applied for the purpose for which loans were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us no fraud by the Company or no fraud on the Company by its officers andemployees has been noticed or reported during the year.

(xi) The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct 2013.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable.

(xiii) According to the information and explanations given by the management and basedon our examination of the records of the Company transactions with the related parties asidentified by the management are in compliance with section 177 and 188 of the CompaniesAct 2013 where applicable and details for the same have been disclosed in the standalonefinancial statements as required by the applicable Indian accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Therefore theprovisions of clause 3(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withthem. Therefore the provisions of clause 3(xv) of the Order are not applicable to theCompany.

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

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Bimal Kumar Sipani
Partner
Place: Noida (Delhi-NCR) Membership No. 088926
Date: May 28 2021 UDIN:21088926AAAAGV7877

Annexure B referred to in paragraph 2(f) of our report of even date on the other legaland regulatory requirements Report on the Internal Financial controls under Clause (i) ofSub - section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to standalone financialstatements of Jindal Poly Films Limited (‘the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 the financial reporting criteriaestablished by the Company considering the essential components control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "guidance Note") and the standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to as audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those standards and the Guidance Note require that we comply withethical requirements of and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient the Company’s internal financial controls system withreference to financial statements.

Meaning of Internal Financial controls with reference to financial statements

A Company’s internal financial controls with reference to financial statements isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal; financialcontrol with reference to financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company ;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorization of management and directors of the company ; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial controls with reference to financialstatements

Because of the inherent limitations of Internal Financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India however same need tobe further strengthened.

Emphasis of Matter

We draw attention that the Company has defined risk control matrix of various processbasis Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India but the same is required to befurther strengthened by incorporating more controls related to entity level controlsprocess level controls and controls related to financial statements review and closureprocess.

Our opinion under Section 143(3)(i) of the Act is not modified in respect of abovematter.

Explanatory Statement

The weakness in operating effectiveness of internal financial control system as statedin ‘Emphasis of Matter was considered in determining the nature timing and extentof audit tests applied in our audit of the March 31 2021 standalone financial statementsof the Company and this report does not affect our report dated May28 2021 whichexpressed an unqualified opinion on those standalone financial statements.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Bimal Kumar Sipani
Partner
Place: Noida (Delhi-NCR) Membership No. 088926
Date: May 28 2021 UDIN:21088926AAAAGV7877

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