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You Are Here : Markets  |  Equity   |   Company Profile  |   Auditor's Report
Jindal Steel & Power Ltd(Industry :   Steel - Sponge Iron)
 
BSE Code:532286NSE Symbol: JINDALSTELP/E  (TTM): 0
ISIN Demat:INE749A01030Div Yield %:0EPS   (TTM) :0
Book Value (Rs):131.950489Market Cap (RsCr):6093.26Face Value (Rs) :1
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To The Members of Jindal Steel & Power Limited

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 of 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.

Basis for Qualified Opinion

a) As detailed in note 40(i) and (ii) of the financial statements, based on the Order of Hon'ble Supreme Court of India, the Company is to pay an additional levy of Rs 295 per metric ton on gross coal extracted from operational mines. Through March 31, 2015, such levy on the gross extraction amounts to Rs 2,082.23 crore of which Rs 1,989.83 crore has been paid under protest and Rs 38.86 crore has been accrued. Of the total amount paid or accrued, based on legal opinion the Company has recorded Rs 807.77 crore as an exceptional item representing the levy on net extraction (run of mines less shale, rejects and ungraded middling) of coal. Had the gross levy been recorded, exceptional items and net loss before tax for the year ended March 31, 2015 would have been higher by Rs 1,274.46 crore.

b) As detailed in note 40 (iii) of the financial statements and referred above note, the Company has not made adjustment in the net carrying value of investment made in mining assets including land, infrastructure and clearance, etc., of Rs 419.72 crore as at March 31, 2015, pending finalization of the compensation claim filed by the Company with the Government authorities. We are unable to comment on the matter including any consequential adjustments that may be required in this regard in these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us except for the effects of our observation stated in

(a) above and possible effects of our observations in (b) above, 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 31 March 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 the Companies (Auditor's Report) Order, 2015 ("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 statement on the matters specified in paragraphs 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 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 the 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) Except for the effects of matter (a) and possible effect of matter (b) described in the Basis for Qualified Opinion paragraph above, 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) The matters described in the Basis for Qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(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 29 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.

For S.R.Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 301003E

Anil Gupta

Partner

Membership No. 87921

Place : new Delhi

Dated: 27th May, 2015

Annexure referred to in paragraph under the heading "Report on Other Legal and Regulatory requirements" of our report of even date

Re: Jindal Steel and Power Limited ('the Company')

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed for significant inventory balance as at the year end.

(b) The procedures of physical verification of inventory 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. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, 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. Accordingly, the provisions of clause 3(iii) (a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(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 and services. during the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture/generation of Mineral Products, Iron & Non alloy Steel, Power and other products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) (i) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

(ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added taxes, cess and any other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of the statue Nature of dues Amount (Rs in Crore) Amount of deposit (Rs in crores) Period to which amount relates Forum where dispute is pending
Income tax Act,1961 Income Tax 751.52 296.57 FY 2005-06 to FY 2009-10 Income Tax Appellate Tribunal
Income tax Act,1961 Income Tax 4.20 4.20 FY 2004-05 Commissioner of income Tax (Appeals), Rohtak
Income tax Act,1961 Income Tax 42.26 FY 2003-04 and FY 200405 Punjab and Haryana High Court, Chandigarh
Central Excise Act, 1944 Excise duty 132.19 - FY 2001-02 to FY 2013-14 CESTAT, delhi
Central Excise Act, 1944 Excise duty 0.10 - FY 95-96 Madhya Pradesh High Court, Jabalpur
Central Excise Act, 1944 Excise duty 0.64 - FY 2003-04 High Court Bilaspur
Building & Other Construction Workers Welfare Cess Act, 1996 Building Cess 3.72 0.05 FY 2007-08 to 2013-14 Odisha High Court
Clean Energy Cess Rules, 2010 Clean Energy Cess 29.72 FY 2010-11 to FY 2011-12 CESTAT, delhi
Finance Act,1994 Service tax 0.11 - FY 2003-04 to 2009-10 CESTAT, delhi
Finance Act,1994 Service tax 0.01 - FY 2006-07 Asst. Commissioner Bilaspur
Finance Act,1994 Service tax 0.35 FY 2001-02, FY 2002-03 & 2013-14 Additional Commissioner, Raipur
Chhattisgarh Upkar Adhiniyam 1981 Energy Development Cess 333.06 38.17 FY 2004-05 to 2014-15 Supreme Court
Odisha Entry Tax Act & Rules Entry Tax 96.66 23.52 FY 2007-2008 to 2010-2011 Sales Tax Tribunal Cuttack, Odisha
Odisha Entry Tax Act & Rules Entry Tax 11.37 2.84 Nov2010 to July2011 Odisha High Court, Cuttack
Odisha Entry Tax Act & Rules Entry Tax 0.07 0.04 FY 2007-2008 Add. Commissioner of Sales Tax, Cuttack
Odisha Entry Tax Act & Rules Entry Tax 0.01 0.00 FY 2006-2007 deputy Commissioner, Commercial Tax (Appeals), Cuttack
Central Sales Tax Act, 1956 Central Sales Tax 0.24 0.15 FY 2005-2006 deputy Commissioner, Sales tax, Rourkela
Central Sales Tax Act, 1956 Central Sales Tax 0.48 0.03 FY 2006-2007 deputy Commissioner, Commercial Tax, Cuttack
Central Sales Tax Act, 1956 Central Sales Tax 0.45 0.45 FY 2004-2005 Odisha High Court, Cuttack
Odisha value added Tax State Sales Tax 0.20 0.04 FY 2006-2007 deputy Commissioner, Commercial Tax (Appeals), Cuttack
Odisha value added Tax State Sales Tax 0.30 0.17 FY 2007-2008 Add. Commissioner of Sales Tax, Cuttack

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year. It has incurred cash losses in the current year after considering the effect of matter stated in paragraph (a) of 'Basis for qualified Opinion' of our auditor's report and the Company has not incurred cash losses in the immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks/ financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xi) Based on the information and explanations given to us by the management, term loans taken during the current year were applied for the purpose for which the loans were obtained.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R.Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 301003E

Anil Gupta

Partner

Membership No. 87921

Place : new Delhi

Dated: 27th May, 2015

   

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