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Jai Balaji Industries Ltd.

BSE: 532976 | NSE: JAIBALAJI |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE091G01018 | SECTOR: Steel - Sponge Iron

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BSE Live

Jan 21, 13:25
26.60 1.25 (4.93%)
Volume
AVERAGE VOLUME
5-Day
3,423
10-Day
14,163
30-Day
12,274
1,702
  • Prev. Close

    25.35

  • Open Price

    26.00

  • Bid Price (Qty.)

    25.70 (99)

  • Offer Price (Qty.)

    26.60 (48)

NSE Live

Jan 21, 13:36
26.00 -0.15 (-0.57%)
Volume
AVERAGE VOLUME
5-Day
16,644
10-Day
20,857
30-Day
18,744
1,035
  • Prev. Close

    26.15

  • Open Price

    26.15

  • Bid Price (Qty.)

    25.90 (500)

  • Offer Price (Qty.)

    26.00 (5)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of JAI BALAJI INDUSTRIES LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone 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 and presentation of these standalone 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 Indian Accounting Standards (Ind AS) 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 standalone 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. 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 standalone financial statements.

Basis for Qualified Opinion

Referring to Note - 38 of the financial statement, company has not provided for interest amounting to Rs. 83,288.81 lacs of which Rs. 43,744.25 lacs pertains to the current financial year, on various loans & credit facilities availed from banks & financial institution on the ground that same is being treated as Non Performing Assets by the lenders. Due to this loss for the current financial year has been understated by Rs. 43,744.25 lacs and accordingly loss for the year ended 31st March, 2018 would’ve been Rs. 69,410.31 lacs instead of *25,666.06 lacs.

Qualified Opinion

Except for the possible effects of the matters described in “Basis for Qualified Opinion”, in our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31st March, 2018, and its losses and its cash-flows for the year ended on that date.

Emphasis of Matter

We want to draw attention of the users of the financial statements on following matters:

1. As explained in Note - 39 of the financial statement, company has been incurring losses and its net worth is completely eroded, also its current liability exceeds current assets by Rs. 3,28,544.25 lacs. However the financial statements of the company have been prepared on a going concern basis and accordingly Deferred Tax Assets amounting to Rs.29,085.14 lacs created up to 31st March 2015 has been carried forward.

2. As explained in Note - 55(a) of the financial statement, regarding de-allocation of coal blocks by Hon’ble Supreme court vide its order dated 24th September 2014, pending finalization of the compensation receivable for the cancelled mines, the book values of investment in mining assets has been brought down to a nominal value of Re. 1 per share.

3. We further want to draw attention on Note 55(b) of the financial statements regarding transfer of control in 100% subsidiary M/ s Nilachal Iron & Power Limited during the current financial year. The entire shares in M/s Nilachal Iron & Power Limited were taken over by the Asset Reconstruction Company in order to settle the loan from IFCI Ltd excluding 600 shares held by the company as beneficiary shareholder and therefore the accounts of M/s Nilachal Iron & Power Limited have not been consolidated with the accounts of the company.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

I. 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 the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

II. 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 accounts 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 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 financial statements comply with the Indian Accounting Standards (Ind AS) 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 31st March, 2018 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2018 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 B’;

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, 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 No. 35A 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, which were required to be transferred to the Investor Education and Protection Fund by the Company.

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets

(b) The Company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification, in our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii. The inventories have been physically verified during the year by the management at regular intervals. In our opinion and according to the information and explanations given to us, no material discrepancies were noticed on physical verification.

iii. According to information and explanation given to us and on the basis of our examination of the records of the Company, the Company has granted unsecured loans to one company covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’), Accordingly xoe report that:-

(a) The terms and condi tions of such loans are prima facie prejudicial to the. company’s interest in respect to loan granted to a company.

(b) The above loans are re-payable on demand.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and securities made.

v. The Company has not accepted any deposits from the public. Accordingly, paragraph 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 148 (1) of the Act, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

vii. According to the information and explanations given to us in respect of statutory dues:

(a) The Company has not been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Value Added Tax, duty of Excise, Cess and other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, the following undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2018 for a period of more than six months from the date they became payable:-

Name of statute

Nature of Dues

Amount Outstanding {Rs. in Lacs)

Period to which amount relates

Income Tax Act, 1961

TDS

474.46

AprilRs.16 to SeptemberRs.17

Finance Act, 1994

Service Tax

214.13

SeptemberRs.16 to JuneRs.17

The Central Excise Act, 1944

Excise Duty

2477.82

MayRs.15 to MayRs.17

Provident Fund Act, 1952

Provident Fund

742.26

MayRs.16 to SeptemberRs.17

Employee State Insurance Act, 1948

ESI

5.10

AprilRs.17 to SeptemberRs.17

Finance Act, 1994

Swachh Bharat Cess

10.22

SeptemberRs.16 to JuneRs.17

Finance Act, 1994

Krishi Kalyan Cess

2.35

SeptemberRs.16 to juneRs.17

Punjab Value Added Tax Act

Value Added Tax

53.57

SeptemberRs.13 to FebruaryRs.14

(b) According to information and explanations given to us, the following dues of income tax, sales tax, duty of excise, duty of custom, service tax and value added tax have not been deposited by the Company on account of disputes:

Name of the statute

Nature of dues

Amount under dispute not yet deposited (Rs. in lacs)

Financial year to which the amount relates

Forum where dispute is pending

The Central Excise Act, 1944

Excise Duty

26,021.16

2007-08 to 2017-18

CESTAT, Commissioner (Appeals)

Finance Act, 1994

Service Tax

776.72

2010-11 to 2017-18

CESTAT, Commissioner (Appeals)

Custom Act, 1962

Custom Duty

1742.28

2016-17 & 2017-18

CESTAT, Commissioner (Appeals)

The West Bengal Sales Tax Act, 1994

Sales Tax

3.59

2004-05

West Bengal Appellate & Revisional Board

The Central Sales Tax Act, 1956

Central Sales Tax

705.58

2006-07 to 2014-15

West Bengal Appellate & Revisional Board

The West Bengal Value Added Tax Act, 2003

Value Added Tax

1,672.71

2005-06 to 2014-15

West Bengal Appellate & Revisional Board

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

5.51

2014-15, 2015-16

Joint Commissioner (Appeals)

The Income Tax Act, 1961

Income Tax

6.85

2008-09

DCIT/CIT(A)

viii. In our opinion and according to information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to banks and financial institution during the year at different maturities as given below:-

(Rs. in lacs)

Banks

Default of Principal

Default of Interest*

Less than 1 year**

More than 1 year

Less than 1 year

More than 1 year

Bank of India

9,622.85

3,304.17

Nil

2,982.71

Canara Bank

2,750.41

370.60

Nil

211.29

Corporation Bank

1,026.81

608.05

Nil

517.92

Federal Bank

342.44

57.31

Nil

3.46

Indian Overseas Bank

16,054.10

2,110.64

Nil

785.27

TDBI Bank

873.14

154.55

Nil

29.25

Oriental Bank of Commerce

24,718.50

1,412.43

Nil

328.67

Punjab National Bank

2,324.52

435.70

Nil

66.20

State Bank of India

80,878.80

5,879.52

Nil

1,027.93

United Bank of India

21,815.40

3,843.17

Nil

1,062.42

Vijaya Bank

3,847.12

2,230.33

Nil

2,077.51

Total

1,64,254.07

20,406.47

Nil

9,092.63

Financial Institution

Default of Principal

Default of Interest*

Less than 1 year**

More than 1 year

Less than 1 year

More than 1 year

WBIDFC

3,215.36

1145.81

Nil

589.28

Total

3,215.36

1145.81

Nil

589.28

*abovefigures doesn’t include interest amounting to ^83,288.81 lacs of which Rs. 43,744.25 lacs pertains to financial year 2017-18 and Rs. 39,544.56 lacs for the financial year 2016-17, as interest has not been provided in the books as mentioned in Note - 38 of the financial statements.

**The lenders have initiated the recovery procedures and have already served the call up notice for their exposure. Therefore instead of structured repayment schedule, the entire exposure of the banks/financial institution 1ms fallen due on immediate basis.

ix. To the best of our knowledge and belief and according to the information and explanations given to us, during the year the Company did not avail any term loan faciiity from bank or financial institution. Also Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanation given by the management, the company has not paid remuneration over and above the limits prescribed under section 197, read with Schedule - V of the act to executive director. Accordingly, paragraph 3{xi) of the Order is not applicable.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards (Ind AS).

xiv. According to the information and explanations given to us and based on our examination of the records, the Company has made private placement of shares during the year under review and the requirements of section 42 of the Act have been complied with.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

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 over financial reporting of M/ s Jai Balaji Industries Limited (“the Company”) as of 31st March 2018 in conjunction with our audit of the 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 (‘ICAI’). 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.

Auditors’ 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”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 authorisations 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, 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 31st March 2018, 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.

For, S. K. AGRAWAL & CO.

Chartered Accountants

Firms Registration No: 306033E

(J. K. CHOUDHURY)

Place : Kolkata Partner

Dated : June 30, 2018 Membership No: 009367