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
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
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
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.
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
ICAI Firm Registration No. 301003E
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
(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:
(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
(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
(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
ICAI Firm Registration No. 301003E
Membership No. 87921