To The Members of JAI BALAJI INDUSTRIES LIMITED
Report on the audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Jai Balaji Industries Limited (the Company), which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information.
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 Companies Act, 2013 ("the Act ") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended ("Ind AS ") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI)
together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI s Code of Ethics. We believe that the audit evidence obtained by us is su fficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.
Emphasis of Matter
Our opinion is not modified in respect of this matters.
Key Audit Matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
S. NO. |
THE KEY AUDIT MATTERS |
HOW THE MATTER WAS ADRESSED IN OUR AUDIT |
1. |
LOAN CLASSIFIED as Non Performing Assets (NPA), TRANSFERRED TO ASSET RECONSTRUCTION COMPANIES (ARC) |
OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING: |
(Refer Note 20 to the Standalone Financial Statements)
|
We reviewed the correspondence of the company with the relevant Asset reconstruction companies and we have examined the agreement made with them. We reviewed the proposal of the company with the Bank. We obtained the understanding of these reconstruction schemes through meetings with management and review of the minutes of the Board of Directors. We reviewed the further correspondences of the Company with the relevant Banks/ARCs. |
2. |
THE COMPANYS EXPOSURE TO LITIGATION RISK |
OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING: |
(Refer Note 35A to the Standalone Financial Statements) The Company is exposed to different laws, regulations and interpretations thereof and hence, there is a litigation risk. Consequently, the Company has significant litigation cases pending with Custom Authorities, Excise Authorities, Service tax Authorities and Income tax Authorities. Given the nature and amounts involved in such cases and the appellate forums at which these are pending, the ultimate outcome and the resultant accounting in the financial statements is subject to significant judgement, which can change over time as new facts emerge and each legal case progresses, and therefore, we have identified this as key audit matter. |
We obtained details of completed tax assessments and demands for the year ended March 31, 2022 from management. We examined the assumptions used in estimating the tax provision and the possible outcome of the disputes. We considered legal precedence and other rulings in evaluating managements position on these tax positions. |
|
3. |
THE COMPANY HAS ISSUED CONVERTIBLE SHARE WARRANT DURING THE YEAR |
OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING: |
(Refer Notes 17 and 18 to the Standalone Financial Statements.) During the financial year 2022-2023, the Company has issued 5,00,00,000 and 2,20,00,000 convertible Share warrant on preferential basis at Rs. 52 and Rs. 45 each respectively, out of which 3,50,00,000 share warrant has been converted into equity share during the year and the balance 3,70,00,000 share warrant is pending for conversion. Consideration received towards these warrants which are pending for conversion (25% of Issue price, i.e, Rs. 52/- for 1.5 crore warrant and Rs. 45/- for 2.2 crore warrant) was depicted in Other Equity which subsequently will be utilized for conversion into equity. As the conversion of Share warrants by the company during the financial year 2022-2023, has the effect of enhancing the Equity of the Company the same is considered to be a key audit matter. |
Our audit procedure includes gaining an understanding of the process of issue of share warrants followed by the company, to include amongst others:
|
Information Other than the Standalone Financial Statements and Auditors Report
Thereon
The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Annual Report does not include the Standalone Financial Statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read Annual Report, if we conclude that there is a material misstatement there in we are required to communicate the matter to those charged with Governance.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, Statement of Changes in Equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companys financial reporting process.
Auditors Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
For S K Agrawal And Co. Chartered Accountants LLP
Chartered Accountants Firms Registration Number-306033E/E300272
Sd/- CA J. K. Choudhury
Partner
which were required to be transferred to the Investor Education and Protection Fund by the Company.
Place: Kolkata Date: 30.05.2023
Membership No: 009367 UDIN : 23009367BGWVBS1097
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report to the Members of Jai Balaji Industries Limited of even date)
(B) The Company has maintained proper records showing full particulars of intangible assets.
10% or more in the aggregate for each class of inventory were noticed during such physical verification.
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been sanctioned working capital limits in excess of 5 crore, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii)(b) of the Order is not applicable.
guarantees, and security in respect of which provisions of sections 185 and 186 of the Companies Act, 2013 are applicable and accordingly, reporting under clause 3(iv) of the Order is not applicable to the Company.
prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2023 for a period of more than six months from the date of becoming payable.
Nature of Statute |
Nature of dues |
Period to which the matter pertains |
Forum where matter is pending |
Amount (in lakhs) |
Pre-Deposit (in lakhs) |
Net Amount (in lakhs) |
The Central Excise Act, 1944 |
Excise Duty |
2003-04, 2006-07 to
2017-18 |
Central Excise and Service Tax Appellate Tribunal, Commissioner |
20,082.77 |
226.43 |
19,856.34 |
The Goods and Service Tax Act, 2017 |
GST |
2017-18 to 1019-20 | High Court (Kolkata, Bhilai), Commissioner (Appeal), West Bengal Appellate & Revisional Board |
3,344.17 |
38.98 |
3,305.19 |
Customs Act, 1962 |
Custom Duty |
2012-13 | Central Excise and Service Tax Appellate Tribunal, Commissioner |
362.32 |
0.00 |
362.32 |
The Income Tax Act, 1961 |
Income Tax |
2009-10 | DCIT/CIT(A) |
5.70 |
0.00 |
5.70 |
The Finance Act, 1994 |
Service Tax |
2004-05 to 2017-18 | Central Excise and Service Tax Appellate Tribunal, Commissioner, High Court (Kolkata) |
1,098.25 |
20.37 |
1,077.89 |
The Value Added Tax, 2005 |
Vat |
2005-06. 2006-07, 2008-09, 2010-11, 2011-12, 2013-14, 2015-16, 2017-18 |
W.B.C.T. Appellate & Revisional Board, Large Taxpayer Unit |
2,813.06 |
118.71 |
2,694.35 |
The Central Sales Tax Act, 1956 |
Central Sales Tax |
2006-07, 2008-09, 2010-11 to 2013-14, 2015-16 to 2017-18 |
W.B.C.T. Appellate & Revisional Board, Large Taxpayer Unit |
1,104.17 |
36.53 |
1,067.64 |
Entry Tax Act, 1976 |
Entry Tax |
2012-13 to 2017-18 |
W.B.C.T. Appellate & Revisional Board |
4,204.34 |
0.00 |
4,204.34 |
(b) The company has issued Convertible Share Warrant on preferential basis during the year and the requirements of section 42 and section 62 of the Companies Act, 2013 have been complied with and the funds raised have been used for the purposes for which the funds were raised.
(b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.
when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements section of our report to the Members of Jai Balaji Industries Limited of even date)
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 with reference to Standalone Financial Statement of Jai Balaji Industries Limited ("the Company ") as of 31st March, 2023 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys policies, the safeguarding of its assets,the prevent ion 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 Companys 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 auditors 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 Companys internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys 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 standalone financial statements in accordance with generally accepted accounting
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys 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, to the best of our information and according to the explanations given to us, 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 31 March 2023, 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 And Co. Chartered Accountants LLP
Chartered Accountants Firms Registration Number-306033E/E300272
Sd/ CA J. K. Choudhury
Partner
principles, and that receipts and expenditures of the company are being made only in accordance with authorization of
Place: Kolkata
Date: 30.05.2023
Membership No: 009367
UDIN : 23009367BGWVBS1097
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