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Jaiprakash Associates

BSE: 532532|NSE: JPASSOCIAT|ISIN: INE455F01025|SECTOR: Infrastructure - General
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Auditor's Report (Jaiprakash Associates) Year End : Mar '17

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Jaiprakash Associates Limited (“the Company) which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act and the Rules made there under, including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

Without qualifying our opinion, we draw attention to note 32(d) of the standalone Ind AS financial statements, relating to the order of the Competition Commission of India (CCI), concerning alleged contravention of the provisions of the Competition Act, 2002 during F.Y.2009- 10 & 2010-11 and imposing a penalty of '' 132360 lacs on the Company. The Company has filed an appeal against the said Order before the Competition Appellate Tribunal wherein the Tribunal granted stay in depositing the penalty imposed subject to the condition that the Company shall deposit 10% of the penalty calculated on the profit earned by the cement business i.e. ''2377 lacs, which has since been deposited. Further, The Competition Commission of India vide its other order dated 19th January, 2017 held various cement manufacturers liable for alleged contravention of certain provisions of the Competition Act, 2002 in the state of Haryana during F.Y.2012-13 to F.Y. 2014-15 and imposed a penalty of ''3802 lacs on the Company. The Company has filed appeal against the order before Competition Appellate Tribunal.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the year ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 28, 2016 and November 14, 2015 respectively. adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of this matter. 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 best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 32 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There are no amounts that were due for being transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8 November, 2016 of the Ministry of Finance, during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. - Refer Note 45 to the standalone Ind AS financial statements.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in “Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act)

We have audited the internal financial controls over financial reporting of JAIPRAKASH ASSOCIATES LTD (“the Company) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. The situation of the moveable assets used in the construction activity keeps on changing from works sites depending upon requirements for a particular contract.

(b) A substantial portion of the Fixed Assets have been physically verified by the management during the year and to the best of our knowledge and information given to us, no material discrepancies have been noticed on such physical verification.

(c) According to the information and explanations given to us and the records examined by us, we report that, other than the immovable properties acquired on amalgamations with the Company as per schemes approved by the Hon''ble High Courts in earlier years, the title deeds are held in the name of the Company as at the balance sheet date, except the following:

Description & location of

Gross Book

property

Value

(Rs, lacs)

Land at Dera Mandi Gaon, New

153

Delhi & building thereon

Freehold land at Rangpuri,

New Delhi (Compulsorily

3

acquired by the Government)

(ii) (a) As explained to us, the Inventory has been physically

verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act. Hence, the provisions of Clauses 3(iii)(a), 3(iii)(b), and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees, and security, the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

(v) In our opinion and according to the information and explanations given to us the Company has not accepted any deposit during the year. The Company has generally complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, read with the Orders issued by the Hon''ble National Company Law Tribunal (NCLT) from time to time; however, there have been delays in repayment of matured fixed deposits which had matured for repayment on or before the balance sheet date and were outstanding as at 31st March 2017. The Company has been granted extension from time to time for repayment of its outstanding deposits by the Hon''ble NCLT, the last interim extension having been granted till 30th May 2017.

(vi) We have broadly reviewed the accounts and cost records maintained by the segments of the Company where cost records have been prescribed by the Central Government under section 148(1) of the Companies Act, 2013, and are of the opinion that prima-facie the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records.

(vii)(a) As per records produced before us and according to the information and explanations given to us the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales tax, Service tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities, and there were no arrears of such dues at the end of the year which have remained outstanding for a period of more than six months from the date they became payable, except for the following:

Particulars of dues

Rs, (In lacs)

Royalty Payable

3537.60

Excise Duty payable

198.82

District & National Mineral Foundations Payable

2266.37

Electricity Duty Payable

4327.97

Service Tax Payable

207.19

TDS Payable

230.60

(b) As per records produced before us and according to the information and explanations given to us there are no dues of Income-tax or Sales-tax or Service Tax, or duty of Customs or duty of Excise, or Value Added Tax which have not been deposited on account of any dispute, except for the following:

_Figures in Rs, Lacs

Name of Statute (Nature of dues)

Period to which amount relates

Forum where dispute is pending

Total

Commissionarate

Appellate

authorities-

Tribunal

High Court

Supreme

Court

Central Excise

1988-2016

2,624.60

-

-

-

2,624.60

1996-2017

-

5,195.41

-

-

5,195.41

1997-2009

-

-

780.14

-

780.14

Figures in '' Lacs

Name of Statute (Nature of dues)

Period to which amount relates

Forum where dispute is pending

Total

Commission rate

Appellate

authorities-

Tribunal

High Court

Supreme

Court

Electricity Duty & Cess

1991-2002 & 2006-2017

-

-

12,643.47

-

12,643.47

Sales Tax/VAT

1999-2002 to 2006-2015

4,727.39

-

-

4,727.39

2004 -2013

-

630.98

-

-

630.98

2000-2001,

2005-2017

-

-

8,944.59

-

8,944.59

2002-2008

-

-

-

9,029.24

9,029.24

Entry Tax

2000-2001,

2011-2015

192.36

-

-

-

192.36

2006-12

-

240.29

-

-

240.29

2001-2002,

2010-2017

-

-

3,266.23

-

3,266.23

2005-2017

-

-

-

20,709.11

20,709.11

Rural Infrastructure Tax

2005-2017

-

-

-

3,043.51

3,043.51

Tax on transportation of goods in Himachal Pradesh

2010-2017

8,140.97

8,140.97

Service Tax

2005-2013

338.90

69,529.13

-

-

69,868.03

Levy on transport of limestone

2007-2011

-

-

-

555.20

555.20

Cess under Building and other Construction

2008-2012

-

-

-

-

-

Water Cess

2003-2013

-

-

-

-

-

Customs

-

4,487.03

-

-

4,487.03

Income Tax

AY 2014-15

1,674.00

-

-

-

1,674.00

AY 08-09 to 13-14

-

-

17,545.16

-

17,545.16

(viii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion, that during the year, the Company has defaulted in repayment of principal and/or interest to banks, financial institutions, & privately placed debenture-holders wherein the period of delay ranges from 1 day to 634 days.

The overdue interest on borrowings amounts to Rs, 3,31,202.11 lacs as reflected in the standalone Ind AS financial statements “Other Financial liabilities which was outstanding as at 31st March 2017.

The overdue principal repayments of borrowings amounts to Rs, 375,179.13 lacs as reflected in the standalone Ind AS financial statements “Other Financial liabilities which was outstanding as at 31st March 2017.

Lender wise details for overdue interest & overdue principal repayments are given below:

Name of Bank/FI/Debenture holders

Overdue Principal repayments as at 31.3.2017

Period of default for overdue principal repayments

Overdue Interest as at 31.3.2017

Period of default for overdue interest

(Rs,in lacs)

(Rs,in lacs)

Allahabad Bank

2,000.00

1-305 Days

1,292.57

1-335 Days

Axis Bank Limited

-

0.20

1 Day

Bank of India

2,631.50

1-386 Days

859.88

1- 366 Days

Bank of Maharashtra

11,119.00

1-549 Days

15,930.32

1-549 Days

IDBI Bank Ltd

-

33,330.09

1-336 Days

ICICI Bank Ltd.

68,924.41

1-336 Days

76,162.52

1-336 Days

Canara Bank

-

15,452.03

1-547 Days

Central Bank of India

-

350.35

1-336 Days

Corporation Bank

3,157.80

1-477 Days

1,934.29

1-488 Days

Exim Bank

8,756.67

1-365 Days

1,588.93

1-335 Days

Karnataka Bank

4,434.00

1-547 Days

3,437.73

1-549 Days

Karur Vysya Bank

1,204.36

1 Day

418.57

1-60 Days

Name of Bank/FI/Debenture holders

Overdue

Period of

Overdue Interest

Period of

Principal

default for

as at 31.3.2017

default for

repayments as at

overdue principal

overdue interest

31.3.2017

repayments

(Rs,in lacs)

(Rs,in lacs)

Lakshmi Vilas Bank

2,105.20

1-295 Days

1,600.33

1-336 Days

Oriental Bank of Commerce

2,105.20

1-295 Days

962.87

1-275 Days

Punjab & Sind Bank

5,389.00

1-547 Days

2,263.88

1-549 Days

State Bank of Bikaner & Jaipur

1,125.00

1-182 Days

392.82

1-181 Days

Indusind Bank Ltd

-

1,172.99

1-59 Days

Standard Chartered Bank

16,283.17

1-275 Days

19,023.34

1-486 Days

State Bank of Hyderabad

4,500.00

1-275 Days

1,553.92

1-275 Days

State Bank of Indore

1,125.00

1-456 Days

496.76

1-455 Days

Bank of India

-

573.42

1-336 Days

State Bank of India

159,166.55

1-479 Days

70,504.95

1-457 Days

State Bank of Travancore

3,750.00

1-278 Days

1,615.57

1-304 Days

Syndicate Bank

2,496.00

1-455 Days

1,179.61

1-455 Days

The South Indian Bank Ltd

1,000.00

60 Days

903.75

1-60 Days

The Jammu & Kashmir Bank Ltd

1,871.94

275 days

851.42

1-244 Days

Uco Bank

11,664.00

1-273 Days

5,180.08

1-275 Days

United Bank of India

4,500.00

1-455 Days

3,201.54

1-454 Days

Yes Bank Ltd

1,000.00

1 Day

246.21

1 Day

AKA Ausfuhrkredit GmbH

2,661.38

84- 634 Days

75.30

84-634Days

IFCI Ltd.

18,405.78

1-321 Days

11,540.78

1-440 Days

LIC - NCDs

29,000.00

1-341 Days

10,545.29

1-341 Days

LIC Term Loan

-

4,666.78

1-305 Days

SIDBI

3,553.18

91- 275 Days

740.91

1-276 Days

L&T Infrastructure Finance Co Ltd

1,250.00

1 Day

-

Other Including Deferred Payment of Land and Foreign Currency Loans/Bonds

41,152.11

24-570 Days

375,179.13

331,202.11

The Company has not defaulted in repayment dues to the Government.

(ix) The Company has not raised moneys by way of further public offer. Further, in our opinion and according to the information and explanations given to us, the moneys raised by way of debt instruments and term loans have been applied by the Company during the year for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) I n our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Companies Act, 2013.

(xii) The Company is not a Nidhi company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) I n our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) I n our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

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

For M.P. Singh & Associates

Chartered Accountants

Firm Registration Number: 002183C

(CA Ravinder Nagpal) Partner

Membership No. 081594

Place : New Delhi

Date : May 29, 2017

Source : Dion Global Solutions Limited
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