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Jindal Poly Films Ltd.

BSE: 500227 Sector: Industrials
NSE: JINDALPOLY ISIN Code: INE197D01010
BSE 00:00 | 30 Mar 200.40 6.90
(3.57%)
OPEN

192.00

HIGH

209.70

LOW

186.90

NSE 00:00 | 30 Mar 200.20 3.60
(1.83%)
OPEN

183.55

HIGH

208.00

LOW

183.50

OPEN 192.00
PREVIOUS CLOSE 193.50
VOLUME 6662
52-Week high 297.05
52-Week low 150.00
P/E 3.12
Mkt Cap.(Rs cr) 878
Buy Price 199.00
Buy Qty 639.00
Sell Price 214.00
Sell Qty 1.00
OPEN 192.00
CLOSE 193.50
VOLUME 6662
52-Week high 297.05
52-Week low 150.00
P/E 3.12
Mkt Cap.(Rs cr) 878
Buy Price 199.00
Buy Qty 639.00
Sell Price 214.00
Sell Qty 1.00

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 2019 the Statement of Profit and Loss (including the Statement of Other ComprehensiveIncome) the Statement of Changes in Equity and the Cash Flow Statement for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind-AS financial statements give the information required bythe 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 2019 its profit including othercomprehensive incomethe 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 FinancialStatements'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 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 Code of Ethics. We believethat the audit evidence obtained by us is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor's responsibilities forthe audit of the financial statements section of our report including in relation tothese matters. Accordingly our audit included the performance of procedures designed torespond to our assessment of the risks of material misstatement of the financialstatements. The results of our audit procedures including the procedures performed toaddress the matters below provide the basis for our audit opinion on the accompanyingfinancial statements.

S. No. Key Audit Matter Auditor's Response
1. Revenue Recognition How our audit addressed the key audit matter:
For the financial year ended 31 March 2019 the Company has recorded revenue amounting to Rs. 369350.89 Lakhs. The accounting policies for revenue recognition are set out in Note 2.20 to the standalone financial statements and the different revenue streams of the Company have been disclosed in Note 25 to the financial statements. We have identified sales cut-off to be significant because of the high volume of transactions and the varying sales contractual and shipping terms. Revenue recognition is susceptible to the higher risk that the revenue is recognised when the control of goods has not been transferred to the customers. We assessed the overall sales process and the relevant systems and the design of controls over the capture and recording of revenue transactions. We have tested the effectiveness of controls on the processes related to revenue recognition relevant to our audit. We performed sample testing on revenue and checked that the revenue recognition criteria are appropriately applied. We have also performed cut-off tests to ensure the Company has complied with proper cut- off procedures and revenue is recognized in the appropriate accounting period.
Our Observation:
We found the Company's revenue recognition to be consistent with its accounting policy as disclosed in Note 2.20 to the standalone financial statements. We are satisfied that the Company's revenue has been appropriately recognized and in the relevant accounting period.
2. Valuation of inventories How our audit addressed the key audit matter:
We refer to Note 7and 2.5 to the financial statements. As at March 31 2019 the total carrying amount of inventories was Rs. 48176.92 lakhs. The 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. 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 have checked and analyzed the ageing of the inventories reviewed the historical trend on whether there were significant inventories written off or reversal of the allowances for inventory obsolescence. 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 and compared 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.
3. Valuation of Current and Non-Current Investments How our audit addressed the key audit matter:
As disclosed in Note 4 & 8 to the financial statements. 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. 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 2019.We have reviewed that investments where probability of realization is very low should not be carried forward.
As at March 31 2019 the total carrying amount of total investments were Rs. 40567.22 Lakhs. Investments mainly includes unquoted preference shares and mutual funds. 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.
Our Observation:
Based on the audit procedures performed we are satisfied with existence and valuation of investment at March 31 2019.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon. We have obtained allother information prior to the date of this auditor's report.

Our opinion on the standalone 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 standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

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 and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the 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 Financial 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 as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are also responsible foroverseeing the Company's financial reporting 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting 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 the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company 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 Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 about thematter or when 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 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.

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 the Statement of Change inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalonefinancial statements comply with the IndianAccounting Standards (Ind AS) read with the Companies (Indian Accounting Standards) Rules2015 as amended specified 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 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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) 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 opinionand to the best of our information and according to the explanations given to us theremuneration paid /provided by the Company to its directors during the year is inaccordance 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 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 35 to thestandalonefinancial statements;

ii. The Company did not have material foreseeable losses in long-term contractsincluding 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
B. K. Sipani
Place: New Delhi Partner
Date: May 30 2019 Membership No. 088926

ANNEXURE-A TO THE AUDITOR'S REPORT

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 propertyplant &equipment.

b. The Company has a regular programme of physical verification of its property plantand equipment by which property plant and equipment are verified in a phased manner overa period of three years. In accordance with this programme property and plant wereverified during the year. In our opinion periodicity of physical verification is reasnablehaving regard to the size of the Company and nature of its property plant and equipment.

c. According to information and explanations given by the management the title deedsof immovable properties included in Property Plant & Equipment are held in the nameof the Company except free hold land having gross value of Rs. 45.70 lacs for whichregistration in the name of the company is pending.

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) During the year the Company has granted unsecured loan to one wholly ownedsubsidiary company covered in register maintained under section 189 of the Companies Act2013. The terms and conditions of the grant of such loans are notprima facie prejudicialto the interest of the Company. The Company has stipulated schedule of repayment ofprincipal and payment of interest thereon. Repayment of principal and interest for loansgranted including earlier years which are payable on demand are regular in paymentwhenever demanded. However in respect of advance aggregating Rs. 9149 Lakhs (includinginterest) given to Jindal India Thermal Power Limited which was converted into loan inearlier year on cancellation of power purchase agreement were written off during the year[Refer Note 33.2 of standalone financial statements]. The Company has not granted any loanto Firms Limited Liability Partnership or any other parties covered in the registermaintained 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 investments made and guarantee or security given. According toinformation and explanations given by the management there is no loan granted orguarantee or security provided under section 185 of the Companies Act 2013.

v) The Company has not accepted any deposit covered under sections73 to 76 of theCompanies Act 2013 during the year.

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

vi) The maintenance of cost records has not been prescribed by the Central Governmentunder the section 148 (1) of the Act read with companies (Cost Records and Audit) Rules2014 for the goods/product manufactured by the Company and are of the opinion that primafacie the prescribed records have been made and maintained. We have however not 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 is generally regular indepositing 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 deducted/ accrued in thebooks with the appropriate authorities. There was no undisputed outstanding statutorydues as at the yearend for a period of more than six months from the date they becamepayable. b. According to the records of the Company there are no dues outstanding ofincome tax sales tax service tax duty of customs duty of excise and value added tax onaccount of any dispute other than the followings:

Name of Statue Nature of Dues Period to which it relates Amount (Rs. in Lakhs) Forum where dispute is pending
The Income Tax Act1961 Disallowance of expenses and deduction 1993-1994 52.60 ITAT- Delhi
Disallowance of expenses and depreciation 1999-2000 391.45 CIT(A)- GZB
Disallowance of expenses 2006-07 to 2009-10 68.57 ITAT- Delhi
Disallowance of expenses 2016-17 164.34 CIT(A)- 22 Delhi
80 - IB claim reduced due to shifting expenses 2005-06 68.73 ITAT- Delhi
Disallowance u/s 14A and Sales tax subsidy 2013-14 161.68 ITAT- Delhi
Sales Tax Act Purchase disallowance against Form A 2005-06 2.41 Sales Tax Tribunal Nasik
Refund disallowed on building material 2007-08 3.48 Sales Tax Tribunal Nasik
Disallowance of Export sales 1993-94 28.16 Sales Tax Tribunal Delhi
Defective of Form C 2004-05 5.26 Sales Tax Tribunal Guwahati
Non produciton of Way bill 2015-16 1.06 Sales Tax Tribunal West Bengal
The Finance Act 1994 Disallowance of service tax on consultant payment 2011-12 97.17 CESTAT Mumbai
Service tax on GTA 2010-11 1.08 Commissioner Appeal
The Central Excise Act 1944 Duty on Import 2002-03 366.00 Hon'ble Supreme Court
Penalty 2002-03 110.85 Commissioner Nashik
Disallowance of Cenvat Credit Dec. 2006 to March'2011 76.79 Hon'ble High Court Allahabad
Dispute on duty 2010-11 35.67 CESTAT Ahmedabad
Disallowance of Cenvat Credit 2012-13 124.99 CESTAT Mumbai
Disallowance of Cenvat Credit on Commission 2015-16 473.05 Commissioner Nashik

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) During the year the Company did not raise any money by way of initial public offeror further public offer (including debt instruments). Further in our opinion andexplanations given to us term loans raised during the year were applied for the purposefor which loans were raised.

x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Standalone Financial Statements and according to the information andexplanations given to us no fraud by the Company or no fraud on the Company by itsofficers and employees has been noticed or reported during the year.

xi) According to the information and explanations given by the management managerialremuneration has been paid /provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Companies Act 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 managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 wherever applicable and details for the same have been disclosed inthe standalone financial statements as required by the applicable Indian accountingstandards.

xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Therefore the provisions of clause 3(xiv) of the Order are not applicable.

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 withdirectors. Therefore the provisions of clause 3(xv) of the Order are not applicable.

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
B. K. Sipani
Place: New Delhi Partner
Date: May 30 2019 Membership No. 088926

ANNEXURE - B TO THE AUDITOR'S REPORT

Report on the Internal Financial controls under Clause (i) of Sub - section 3 ofSection 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 2019 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 of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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'sjudgment 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 have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial controls with reference to financial statements

A Company's internal financial controls with reference to financial statements is aprocess 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; financial controlwith 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 have amaterial 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 2019 based on the internal control over the 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 however same need to be furtherstrengthened.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
B. K. Sipani
Place: New Delhi Partner
Date: May 30 2019 Membership No. 088926