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Jaiprakash Associates

BSE: 532532|NSE: JPASSOCIAT|ISIN: INE455F01025|SECTOR: Infrastructure - General
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Mar 14
Auditor's Report (Jaiprakash Associates) Year End : Mar '15
We have audited the accompanying financial statements of Jaiprakash
 Associates Limited (the Company), which comprise the Balance Sheet as
 at March 31, 2015, the Statement of Profit and Loss, and the Cash Flow
 Statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information.
 
 Management''s Responsibility for the 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 financial statements that give a true and
 fair view of the financial position, financial performance and cash
 flows of the Company in accordance with the accounting principles
 generally accepted in India, including the Accounting Standards
 specified under Section 133 of the Act, read with Rule 7 of the
 Companies (Accounts) Rules, 2014.  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 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 financial
 statements based on our audit.
 
 We have taken into account the provisions of the Act, 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
 thereunder.
 
 We conducted our audit 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 financial statements
 are free from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the disclosures in the financial statements. 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. In making those risk
 assessments, the auditor considers internal financial control relevant
 to the Company''s preparation of the financial statements that give a
 true and fair view in order to design audit procedures that are
 appropriate in the circumstances, but not for the purpose of expressing
 an opinion on whether the Company has in place an adequate internal
 financial controls system over financial reporting and the operating
 effectiveness of such controls.  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 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 financial
 statements.
 
 Opinion
 
 Without qualifying our opinion, we draw attention to note 36(d) of the
 financial statements, relating to the order of the Competition
 Commission of India (CCI), concerning alleged contravention of the
 provisions of the Competition Act, 2002 and imposing a penalty of Rs,
 132360 lacs on the Company. As per directions of the Competition
 Appellate Tribunal an amount of Rs, 13747 lacs has been deposited which
 will remain with them and not be disbursed during the pendency of the
 appeal. Based on the advice of the Company''s counsels as well as its
 own assessment, the Company believes that it has strong grounds for the
 success of the appeal, and hence no provision has been considered
 necessary by the Company in this regard.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid 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, 2015, and its loss and its cash flows for the year ended
 on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by Section 143(3) of the Act, we report that:
 
 a) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account.
 
 d) In our opinion, the aforesaid financial statements comply with the
 Accounting Standards specified under Section 133 of the Act, read with
 Rule 7 of the Companies (Accounts) Rules, 2014.
 
 e) On the basis of the written representations received from the
 directors as on March 31, 2015 taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2015
 from being appointed as a director in terms of Section 164(2) of the
 Act.
 
 f) 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, 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 financial statements - Refer Note 36 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 has been no delay in transferring amounts required to be
 transferred to the Investor Education and Protection Fund by the
 Company.
 
 ANNEXURE referred to in paragraph 1 under ''Report on Other Legal and
 Regulatory Requirements'' section of our report of even date to the
 members of Jaiprakash Associates Limited on the accounts of the Company
 for the year ended 31st March 2015.
 
 On the basis of such checks as we considered appropriate and according
 to the information and explanation given to us during the course of our
 audit, we report that:
 
 (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 in our opinion the
 frequency of verification is reasonable having regard to the size of
 the Company & nature of its assets.  According to the information given
 to us and to the best of our knowledge, no material discrepancies were
 noticed on such physical verification.
 
 (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 the procedures of physical verification of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iii) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 189 of the Companies Act, 2013.
 
 (iv) In our opinion and according to the information and explanations
 given to us there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of inventory and fixed assets and for the sale of goods /real
 estate, electrical energy services & supplies under EPC contracts.
 During the course of our audit we have not observed any major weakness
 in such internal control system.
 
 (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 complied with the provisions of Sections 73 to 76 or
 any other relevant provisions of the Companies Act, 2013; however, with
 regard to repayment of unpaid matured deposits which had matured for
 repayment on or before the balance sheet date and were outstanding as
 at 31st March 2015, the New Delhi Bench of the Hon''ble Company Law
 Board, vide its order dated 16.02.2015 and subsequent orders for
 extension of time, the last order being issued on 16.09.2015, has
 granted time up to 31.12.2015 to repay the balance of unpaid deposits
 matured as at 31.03.2015 and deposits matured after 31.03.2015.
 
 (vi) We have broadly reviewed the accounts and cost records maintained
 by the Cement, Power & Real Estate divisions of the Company as
 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 applicable to it like,
 Provident Fund, Employees'' State Insurance, Income-tax, Service Tax,
 Sales Tax/ Value Added Tax, Wealth Tax, Customs Duty, Excise Duty, Cess
 and other material statutory dues applicable to it with 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 royalty on
 limestone amounting to Rs, 858 lacs and electricity duty Rs, 241 lacs.
 
 (b) As per records produced before us and according to the information
 and explanations given to us there are no dues of Income-tax,
 Sales-tax, Wealth tax, Service Tax, Customs duty, Excise Duty, Value
 Added Tax or Cess which have not been deposited on account of any
 dispute, except for the following:
 
                                              (Rs, lacs)
 
 Name of Statute      Period to     Forum where dispute is pending
 (Nature of dues)     which amount 
                                     Commissionarate   Appellate  
                      relates                          authorities- 
                                                       Tribunal
 
 Central Excise       1988 - 2015         2,409.66         - 
 
                      2001 - 2015             -         4,409.46 
 
                      1995 - 2009             -            - 
 
                      1994 - 1995             -            -
 
 Electricity 
 Duty & Cess          1991 - 2002 &           -            - 
  
                      2006 - 2015
 
 Sales Tax/VAT        1999 - 2002 &        1,836.21        - 
 
                      2006 - 2015
 
                      2004 - 2005 &           -          70.67 
 
                      2007 - 2011
 
                      1998 - 2001,            -            - 
 
                      2005 - 2008,
 
                      2012 - 2015
 
                      2002 - 2008
 
 Entry Tax            2000 - 2001,          643.73         - 
  
                      2006 - 2008,  
                      2010 - 2012
 
                      2010 - 11              -          123.31 
 
                      2001 - 2002,           -             -
 
                      2011 - 2015
 
                      2007 - 2015            -             -
 
 Royalty on 
 limestone            Up to June             -             - 
                      2014
 
 Rural Infras-
 tructure Tax         2005 - 2015            -             - 
 
 Tax on trans
 portation            2010 - 2015            -             - 
 of goods in 
 Himachal
 Pradesh
 
 Service Tax          2005 - 2012            -         69,040.13 
 
 Levy on 
 transport of         2007 - 2011            -             -
 limestone
 
 Customs                                     -          4,909.85 
 
 Income Tax            AY 2014-15        1,728.72          - 
 
 
 (Rs, lacs)
 
 Name of Statute       Forum where dispute is pending     Total
 (Nature of dues)  
                       High Court        Supreme
                                         Court
 
 Central Excise            -                -           2,409.66
 
                           -                -           4,409.46
 
                        842.29              -             842.29
 
                           -              16.43            16.43
 
 Electricity 
 Duty & Cess         12,612.26              -          12,612.26
 
 Sales Tax/VAT           -                  -           1,836.21
 
                         -                  -              70.67
 
                      7,140.73              -           7,140.73
 
                         -             9,029.24         9,029.24
 
 Entry Tax               -                  -             643.73
 
                         -                  -             123.31
 
                      2,166.29              -           2,166.29
 
                         -            19,392.85        19,392.85
 
 Royalty on 
 limestone           16,211.03              -          16,211.03
 
 Rural Infra
 structure Tax           -             1,016.12         1,016.12
  
 Tax on tran
 sportation              -             5,387.17         5,387.17
 of goods in 
 Himachal
 Pradesh
 
 Service Tax             -                  -          69,040.13
 
 Levy on 
 transport of            -               582.70           582.70
 
 limestone
 
 Customs                 -                  -           4,909.85
 
 Income Tax              -                  -           1,728.72
 
 
 (c) There are no amounts that were due for being transferred to the
 Investor Education and Protection Fund in accordance with the relevant
 provisions of the Companies Act, 1956 and Rules made thereunder.
 
 (viii) The company does not have any accumulated losses at the end of
 the financial year, and has incurred cash losses amounting to Rs, 61792
 lacs during the financial year covered by our audit and cash losses
 amounting to Rs, Nil in the immediately preceding financial year.
 
 (ix) Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to any financial
 institution, bank or debenture holder, except (a) some instances of
 delay in payment of interest to financial institutions, banks and
 debenture holders ranging for a period from 24 day to 119 days, which
 have been subsequently made good, (b) over-due interest on borrowings
 amounting to Rs, 58008 lacs which is outstanding as at 31st March 2015
 for a period of 1 to 83 days and which is being reflected under Note
 No. 10 - ''Other Current Liabilities'' in the financial statements, and
 (c) over-due principal repayments of borrowings amounting to Rs, 53812
 lacs which is outstanding as at 31st March 2015 for a period of 16 to
 83 days and which is being reflected under Note No. 10 - ''Other Current
 Liabilities'' in the financial statements.
 
 (x) In our opinion and according to the information and explanations
 given to us, where the Company has given guarantee for loans taken by
 its subsidiaries from banks or financial institutions, the terms and
 conditions thereof are not prejudicial to the interest of the company.
 
 (xi) To the best of our knowledge and belief and according to the
 information and explanations given to us, term loans availed by the
 Company were applied by the Company during the year for the purposes
 for which the loans were obtained, other than temporary deployment
 pending application.
 
 (xii) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 year.
 
                                       For M. P. SINGH & ASSOCIATES
 
                                              Chartered Accountants 
 
                                   Firm Registration Number 002183C
 
 
 
                                              (CA. Ravinder Nagpal)
 
                                                           Partner
 
                                                      M.No. 081594
 
 Place : Noida
 
 Dated : 14th November, 2015
Source :
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