Jindal Poly Films Ltd.
|BSE: 500227||Sector: Industrials|
|NSE: JINDALPOLY||ISIN Code: INE197D01010|
|BSE 00:00 | 14 May||784.90||
|NSE 00:00 | 14 May||787.00||
|Mkt Cap.(Rs cr)||3,437|
|Mkt Cap.(Rs cr)||3437.08|
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
We have audited the accompanying standalone financial statements ofJindal Poly Films Limited ("the Company") which comprise the Balance sheet asat March 31 2020 the Statement of Profit and Loss including Other Comprehensive Incomethe Statement of Changes in Equity and the Cash Flow Statement for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "the financialstatements").
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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020its profit including other comprehensive incomethe changes in equity and its cash flowsfor the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs)as specified under section 143(10) of theAct. Our responsibilities 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 of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.
Owing to the COVID-19 related lock-down we were unable to participatein physical verification of inventories carried out by the management at the year-end.Consequently we have performed alternative audit procedures to obtain comfort over theexistence and condition of inventory at the year-end as per guidance provided by SA 501"Audit Evidence - Specific Consideration for Selected Items" and have obtainedsufficient audit evidence.
Our opinion is not modified in respect of above matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements for the financial yearended March 31 2020. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
The Company's Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany'sannual report but does not include the 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 financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial 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. Wehave nothing to report in this regard.When we read the Annual Report if we conclude thatthere is a material misstatement thereinwe are required to communicate the matter tothose charged with governance and take necessary actions as applicable under theapplicable laws andregulations.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Financial statements that give a true and fair view of the financialposition financial performance including other comprehensive incomecash flows andstatement of changes in equityof the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified underSection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from
fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. 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 of the Act we give in the "Annexure A"a statement on thematters specified 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Change in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards (Ind AS) read with the Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules 2016 as amended specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2013;
(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company with reference to these standalonefinancial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" to this report;
(g) In our opinion the remuneration paid /provided by the Company toits directors during the year is in accordance with the provisions of section 197 (16) ofthe Act;
(h) 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 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements - Refer Note 35 to thestandalone financial statements;
i. The Company has made provision for material foreseeable losses onlong-term contracts including derivative contracts;
ii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
AnnexureA referred to in paragraph 1 of our report of even date on theother legal and regulatory requirements (Re:
Jindal Poly Films Limited)
(i) a. The Company has maintained proper records showing fullparticulars including quantitative details and situation
of property plant &equipment except in case of land which is inprocess of reconciliation with title deeds (Registry documents).
b. The Company has a regular programme of physical verification of itsproperty plant and equipment by which property plant and equipment are verified in aphased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and nature its property plant and equipment. Howeverphysical verification of property plant & equipment was not conducted during the yearas required under the programme.
in the name of the Company except free hold land having gross value ofRs. 45.70 lakhs for which registration in the name of the company is pending. Furtherlands are in process of reconciliation with title deeds (Registry documents).
(ii) The management has conducted physical verification of inventoriesexcept stock in transit during the year at reasonable interval and no materialdiscrepancies were noticed on such physical verification.
(iii) The Company has granted unsecured loans during the year to twocompanies covered in the register maintained under Section 189 of the Companies Act 2013.The terms and conditions of the grant of such loans are not prima facie prejudicial tothe interest of the Company. The Company has stipulated schedule of repayment of principaland payment of interest and repayment of principal and interest are regular whereverapplicable. The Company has not granted any loan to Firms Limited Liability Partnershipor any other parties covered in the register maintained under section 189 of the CompaniesAct 2013.
(iv) The Company has complied with provisions of Section 186 of theCompanies Act 2013 in respect of loan granted and investments made during the year. Thereis no loan granted or guarantee or security provided under section 185 and no guarantee orsecurity provided under section 186 of the Companies Act 2013 during the year.
(v) The Company has not accepted any deposit covered under sections 73to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014(as amended) during the year. Therefore provisions of clause 3(v) of the Order are notapplicable to the Company.
(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 in respect of the Company'sproducts to which the said rules are applicable and are of the opinion that prima faciethe prescribed records have been made and maintained. We have not however made adetailed examination of the said records with a view to determine whether they areaccurate or complete.
(vii) a. According to the records of the Company the Company isgenerally regular in depositing amounts deducted/ accrued in the books of account inrespect of undisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax sales tax service tax duty of customs duty ofexcise value added tax cess and other material statutory dues where applicable with theappropriate authorities. There was no undisputed outstanding statutory dues as at theyearend for a period of more than six months from the date they became payable.
b. According to the records of the Company and information andexplanation given to us there are no dues outstanding of income tax sales tax servicetax goods and service tax duty of customs duty of excise and value added tax on accountof any dispute other than the followings:
* Net of deposit.
(viii) The Company has not defaulted in repayment of dues to banks andfinancial institution. The Company did not have any borrowing from Government and dues todebenture holders.
(ix) The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) during the year. Term loansraised during the year were applied for the purpose for which loans were raised.
(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given to us no fraud by the Company or no fraud on theCompany by its officers and employees has been noticed or reported during the year.
(xi) The Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act 2013.
(xii) In our opinion the Company is not a Nidhi company. Thereforethe provisions of clause 3(xii) of the Order are not applicable.
(xiii) According to the information and explanations given by themanagement and based on our examination of the records of the Company transactions withthe related parties are in compliance with section 177 and 188 of the Companies Act 2013where applicable and details for the same have been disclosed in the standalone financialstatements as required by the applicable Indian accounting standards.
(xiv) The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible
debentures during the year. Therefore the provisions of clause 3(xiv)of the Order are not applicable to the Company.
(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with them. Therefore the provisions of clause 3(xv) of the Order arenot applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Annexure B referred to in paragraph 2(f) of our report of even date onthe other legal and regulatory requirements
Report on the Internal Financial controls under Clause (i) of Sub -section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference tostandalone financial statements of Jindal Poly Films Limited ('the Company") as ofMarch 31 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over the financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting (the "guidance Note") and the standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act2013 to the extent applicable to as audit of internal financial controls both applicableto an audit 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 aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial 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 judgement 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 andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to financial statements.
Meaning of Internal Financial controls with reference to financialstatements
A Company's internal financial controls with reference to financialstatements is a process designed to 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 with reference tofinancial statements includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company ; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorization ofmanagement and directors of the company ; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial controls with reference tofinancial statements
Because of the inherent limitations of Internal Financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at March 31 2020 based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia however same need to be further strengthened.
Emphasis of Matter
We draw attention that the Company has defined risk control matrix ofvarious process basis Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India but the same isrequired to be further strengthened by incorporating more controls related to entity levelcontrols process level controls and controls related to financial statements review andclosure process.
Our opinion under Section 143(3)(i) of the Act is not qualified inrespect of this matter.
Our observation as stated in 'Emphasis of Matter was considered indetermining the nature timing and extent of audit tests applied in our audit of theMarch 31 2020 standalone financial statements of the Company and this report does notaffect our report dated June 29 2020 which expressed an unqualified opinion on thosestandalone financial statements.