Report on the Financial Statements
We have audited the accompanying financial statements of Jaiprakash
Associates Limited (the Company), which comprise the Balance Sheet
as at March 31, 2013, and 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
Management is responsible for 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementation and maintenance of internal control 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.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 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 control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Without qualifying our opinion, we draw attention to note 34(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.
1,323.6 crores on the Company. The Company is advised by its counsels
that it has a good case for the Competition Appellate Tribunal setting
aside the order passed by CCI, and accordingly 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 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
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(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
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
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
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE referred to in paragraph 1 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 2013.
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.
(c) Fixed assets disposed off by the Company during the year were not
substantial; hence it does not affect the Company as a going concern.
(ii) (a) The inventories have been physically verified by the
management at reasonable intervals during the year. In our opinion the
frequency of verification is reasonable.
(b) 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) The company is maintaining proper records of inventory. The
discrepancies noticed on physical verification were not material and
these have been properly dealt with in the books of account.
(iii) The Company has not granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(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 continuing
failure to correct major weakness in internal control system.
(v) Based on the audit procedures applied by us and according to the
information and explanations given to us we are of the opinion that the
particulars of contracts or arrangements referred to in section 301 of
the Companies Act, 1956 have been entered into the register required to
be maintained under that section. The transactions made in pursuance of
such contracts or arrangements have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
(vi) In our opinion and according to the information and explanations
given to us the Company has complied with the provisions of Section
58a, 58AA and any other provisions of the Companies Act, 1956, and the
rules framed thereunder with regard to the deposits accepted from the
public. As informed to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
court or any other Tribunal.
(vii) In our opinion the Company has an internal audit system
commensurate with the size & nature of its business.
(viii) We have broadly reviewed the accounts and cost records
maintained by the Cement & Power divisions of the Company pursuant to
the Rules made by the Central Government for the maintenance of cost
records under Section 209(1)(d) of the Companies Act, 1956, and are of
the opinion that prima-facie the prescribed accounts and records have
been maintained. We have not, however, made a detailed examination of
(ix) (a) As per records produced before us, the Company is generally
regular in depositing undisputed statutory dues like Provident Fund,
Investor Education and Protection Fund, Employees'' State Insurance,
Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom 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
year end which have remained outstanding for a period of more than six
months from the date they became payable.
(b) As per records produced before us the dues of Income-tax,
Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty and cess
which have not been deposited on account of any dispute are stated
Name of Statute which amount
(Nature of dues) relates Commissionarate
Central Excise 1988-92 13.65
Name of Statute Forum where dispute is pending
Appellate Supreme Total
authorities- High Court Court
Central Excise - - - 13.65
1.32 2.16 - 3.48
88.22 - - 88.22
150.59 - - 150.59
(x) The company does not have any accumulated losses and has not
incurred any cash losses during the financial year covered by our audit
or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders.
(xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause (xiii) of Para 4 of the Order
is not applicable.
(xiv) In our opinion the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly,
clause (xiv) of Para 4 of the Order is not applicable.
(xv) 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.
(xvi) 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
(xvii)According to the information and explanations given to us and on
the overall examination of the Balance Sheet of the Company for the
year under report, we are of the opinion that no funds raised on short
term basis have been used for long term investment.
(xviii)According to the information and explanations given to us the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
Company has created security/charge in respect of secured
non-convertible debentures issued and outstanding at the year end.
(xx) As the Company has not raised any money by way of public issues
during the year, Clause (xx) of Para 4 of the Order is not applicable.
(xxi) According to the information and explanations given to us, no
material fraud by or on the Company has been noticed or reported during
For M.P. SINGH & ASSOCIATES
Firm Registration No. 002183C
(CA Ravinder Nagpal)
Place : Noida Partner
Dated : 4th May, 2013 M.No.081594