We have audited the accompanying Financial Statements of Jai
Balaji Industries Limited ("the Company"), which comprise the
Balance Sheet as at 31st March, 2026, 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 material accounting
policies information and other explanatory information.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid 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, 2026, and its profit, total comprehensive loss, its cash
flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the 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 Auditor's Responsibility for the Audit of the
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 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
sufficient and appropriate to provide a basis for our opinion on the
Financial Statements.
Key Audit Matter
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Financial
Statements of the current period. These matters were addressed in
the context of our audit of the 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.
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S.
NO.
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THE KEY AUDIT MATTERS
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HOW THE MATTER WAS ADRESSED IN OUR AUDIT
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1
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BORROWINGS
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OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING:
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(Refer Note 20 to the Financial Statements)
In the FY 2025-26 the Rupee Term Loan of H519.00 crore which
was sanctioned by the Tata Capital Limited and its assignees, the
company has fully repaid & foreclosed the entire outstanding
debt pertaining to two assignees (combined sanctioned
amount is H146.98 crore).
During the period under audit FY 2025-26:
1. The company has raised H85.00 crore towards
reimbursement of capex expenditure incurred in projects
of the company from two NBFCs named Akra Fincap
Limited amounting H25.00 Crore and Aditya Birla Capital
Ltd amounting H60.00 Crore.
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We reviewed and examined the relevant agreements.
We reviewed and checked that the payment is made as per
repayment schedule during the FY 25-26.
We obtained the understanding of these refinancing schemes
through meetings with management and review of the minutes
of the Board of Directors.
We have also verified the related compliances including creation
of Charge with Registrar of Companies.
During the period under audit FY 2025-26, the company has not
defaulted or delay on any repayment of borrowings.
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S.
NO.
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THE KEY AUDIT MATTERS
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HOW THE MATTER WAS ADRESSED IN OUR AUDIT
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The company also facilitate by freshly sanctioned Working
Capital Demand Loan of H60 crore (H30 crore from each
lender) from two NBFCs named Piramal Capital, Housing
Finance Limited & Akra Fincap Limited.
2. Indian Overseas Bank has sanctioned and disbursed
fund base and non-fund base working capital facilities
aggregating up to H100 crore to the company.
3. Kotak Mahindra Bank has disbursed the working capital
limit from H40 crore to H90 crore.
Primary security of the aforesaid loans:
a. Rupee Term Loans from various lenders are secured by 1st
pari passu charge over the entire fixed assets (both present
and future) and 1st pari passu charge over the entire current
assets (both present and future) of the Company's units at
Ranigunge and Durgapur in the state of West Bengal and
Durg in the state of Chattisgarh.
b. Working Capital Loan /Working Capital Demand Loan from
various lenders are secured by 1st pari passu charge over
the entire fixed assets (both present and future) and 1st pari
passu charge over the entire current assets (both present
and future) of the Company's units at Ranigunge and
Durgapur in the state of West Bengal and Durg in the state
of Chattisgarh.
The above loans are further secured as follows.
i. Personal Guarantees of Promoter Directors of the Company.
ii. Pledge of 15,39,11,165 number of equity shares of the
Company held by the promoters are against the sanctioned
term loan of H519 crore (Present outstanding H92.45 crore)
by Tata Capital Limited and Co lenders/Assignees and
Working Capital Demand Loan up to H40 crore given by
Tata Capital Limited.
As on 31.03.2026 the exposure in:
Rupee term loan from Tata Capital and Co lenders is H92.45 Crore,
Rupee term loan from NBFC's is H101.50 Crore,
Working Capital Demand Loan from NBFC's is H129.00 Crores,
Working Capital Loan from Bank - Fund Base is H85.16 Crore and
Working Capital Loan from Indian Overseas Bank - Non Fund
Base is H84.75 Crore.
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S.
NO.
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THE KEY AUDIT MATTERS
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HOW THE MATTER WAS ADRESSED IN OUR AUDIT
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2.
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THE COMPANY'S EXPOSURE TO LITIGATION RISK
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OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING:
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(Refer Note 35A to the 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, GST Authorities, Sales Tax and VAT. 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.
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We obtained details of completed tax assessments and demands
for the year ended March 31,2026 from management.
We assessed the process and relevant controls implementec
to identify legal and tax litigations and pending administrative
proceedings.
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
management's position on these tax positions.
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3.
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THE COMPANY HAS IMPLEMENTED THE NEW LABOUR CODE
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OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING:
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(Refer Note 39 and 19B to the Financial Statements.)
In the FY 25-26, the company pursuant to the implementation
of the New Labour Codes effective from 21 November 2025,
the definition of wages has undergone changes, resulting in an
impact on the measurement of employee benefit obligations,
including gratuity and leave encashment.
Based on the management's assessment and an actuarial
valuation obtained by the Company, an additional employee
benefit expense amounting to H3.31 crores has been recognized
as past service cost during the financial year ended 31 March
2026. The said amount has been disclosed as an exceptional
item in the Statement of Profit and Loss.
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Obtained an understanding of the changes introduced by the new
Labour Codes effective from 21 November 2025 and evaluated
their impact on the Company's employee benefit obligations,
including gratuity and leave encashment.
Assessed the appropriateness of the accounting treatment
adopted by the Company, including the recognition of the
additional employee benefit expense as past service cost in
accordance with Ind AS 19 - Employee Benefits.
Obtained the actuarial valuation report prepared by the
independent actuary and evaluated the competence, capabilities
and objectivity of the actuary in accordance with the applicable
Standards on Auditing.
Evaluated whether the recognition of the additional liability as
past service cost and its presentation as an exceptional item in the
Statement of Profit and Loss are in accordance with the applicable
financial reporting framework.
Assessed the adequacy and appropriateness of the disclosures
made in the financial statements with reference to the
requirements of Ind AS 19, Schedule III to the Companies Act,
2013, and other applicable financial reporting requirements.
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4.
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APPROVAL OF CLOSURE OF OVERSEAS SUBSIDIARY AND
JOINT VENTURE
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OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING:
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(Refer Note 49 and 50 to the Financial Statements.)
During the year, the overseas subsidiary, Kesarisuta Industries
Uganda Limited ceased to be a subsidiary pursuant to approval
of its closure by the Board of Directors and publication of the
notice of cessation of business in the Uganda Gazette.
The financial statements of the Joint Venture Companies, namely
Rohne Coal Company Private Limited and Andal East Coal
Company Private Limited (under liquidation), were not available
and accordingly have not been considered for the purpose of
consolidation. The Company has fully provided for diminution in
the value of its investments in these entities.
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Verified the basis for the full provision recognised towards
diminution in the value of investments in the Joint Venture
Companies and tested the related accounting entries.
Assessed the adequacy and appropriateness of the disclosures
made in the financial statements in accordance Indian Accounting
Standards.
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S.
NO.
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THE KEY AUDIT MATTERS
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HOW THE MATTER WAS ADRESSED IN OUR AUDIT
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Further, the Board of Directors has approved termination of
the Joint Venture Agreement relating to Rohne Coal Company
Private Limited on 12th February 2026 consequent upon de¬
allocation of the Rohne Coking Coal Block. The Joint Venture
arrangements relating to the coal block ventures have ceased
or are in the process of being terminated/liquidated as the
underlying purpose for which such ventures were formed no
longer subsists. Consequently, consolidated financial results for
the relevant period have not been submitted.
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5.
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ACCOUNTING SOFTWARE AND AUDIT TRAIL
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OUR AUDIT PROCEDURES INCLUDE THE FOLLOWING:
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Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for
maintaining books of account using accounting software which
has a feature of recording audit trail (edit log) facility is applicable
to the Company with effect from April 1, 2023, and accordingly,
reporting under Rule 11(g) of Companies (Audit and Auditors)
Rules, 2014.
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We have examined the ERP system implemented by the Company
during the year and noted that the audit trail (edit log) feature has
been enabled.
The Company has commenced using the ERP software anc
is in the process of fully implementing and utilizing all its
functionalities. Upon complete implementation, the ERP system
is expected to enhance the efficiency and effectiveness of the
Company's operations and internal controls.
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Emphasis of Matter
1. We draw attention to Note no. 53 to the Financial Statements
in relation to outstanding balances of trade receivables,
trade payables and loans and advances which are subject to
confirmation and subsequent adjustments, if any. Our report is
not modified in respect of this matter.
2. We draw attention to Note no. 49 to the Financial Statements
where the company has provided for the diminution in the
value of investment in two joint ventures companies as the
Hon'ble Supreme Court vide its order date 24th September, 2014
has cancelled number of coal blocks allotted to the companies.
These included two coal blocks under development viz. Andal
East in West Bengal and Rohne in Jharkhand allocated to the
company jointly with the other parties. However, the company
had submitted claims w.r.t the cancellation of coal blocks which
are still pending.
Our opinion is not modified in respect of this matters.
Information Other than the Financial Statements
and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation
of the other information. The other information comprises the
information included in the Board's Report including Annexures
to Board's Report and Shareholder's Information but does not
include the Financial Statements and our auditor's report thereon.
The Board's report including annexures to the Board's report and
Shareholder's Information is expected to be made available to us
after the date of this auditor's report.
Our opinion on the 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 Financial Statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the 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.
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 Act with respect to the preparation
of these 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 Financial Statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, management is responsible
for assessing the Company's 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 Company's
financial reporting process.
Auditor's Responsibility for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's
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 Financial Statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the
audit. We also:
Ý I dentify and assess the risks of material misstatement of the
Financial Statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
Ý Obtain an understanding of internal financial control relevant
to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of
the Act, we are also responsible for expressing our opinion
on whether the Company has adequate internal financial
controls system in place and the operating effectiveness of
such controls.
Ý Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
Ý Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures
in the 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 auditor's
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
Ý Evaluate the overall presentation, structure, and content of the
Financial Statements, including the disclosures, and whether
the Financial Statements represent the underlying transactions
and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Financial
Statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the 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
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 Financial Statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's 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
1. As required by the Companies (Auditor's Report) Order, 2020
("the Order") issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give
in "Annexure A", a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, based on our audit 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 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
including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flow dealt
with by this Report are in agreement with the relevant
books of account.
d) In our opinion, the aforesaid Financial Statements comply
with the 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 2026 taken on record by the
Board of Directors, none of these directors is disqualified as
on 31st March 2026 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". Our report expresses
an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls
over financial reporting.
g) With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements of
section 197(16) of the Act, as amended:
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.
h) 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 which would impact financial position.
(Refer Note 35A to the financial statement)
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 amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company.
iv. (a) The Management has represented that, to the
best of its knowledge and belief, other than as
referred to Note No. 6 to the Financial Statement,
no funds (which are material either individually or
in the aggregate) have been advanced or loaned
or invested (either from borrowed funds or share
premium or any other sources or kind of funds)
by the Company to or in any other person or
entity, including foreign entity ("Intermediaries"),
with the understanding, whether recorded
in writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend or
invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;
(b) The Management has represented, that, to the
best of its knowledge and belief, other than as
referred to Note No. 23 and Note No. 19A to
the Financial Statement, no funds (which are
material either individually or in the aggregate)
have been received by the Company from
any person or entity, including foreign entity
("Funding Parties"), with the understanding,
whether recorded in writing or otherwise,
that the Company shall, whether, directly or
indirectly, lend or invest in other persons or
entities identified in any manner whatsoever
by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of
Rule 11(e), as provided under (a) and (b) above,
contain any material misstatement
v. The company has not declared dividend in the
previous year and nor during the current year ended
March 31,2026, therefore the company is not required
to comply with section 123 of Companies Act, 2013.
vi. Based on our examination, which included the
performance of test checks, we observed that the
Company has maintained its books of account using
accounting software that incorporates an audit trail
(edit log) feature. This functionality was active and
in operation throughout the financial year and was
applied to all relevant transactions recorded in the
system. The audit trail feature captures and retains a
log of changes made to accounting entries, thereby
supporting the integrity and traceability of financial
records. During the course of our procedures, we did
not come across any evidence to suggest that the
audit trail functionality had been disabled, altered, or
otherwise tampered with.
For Das & Prasad
Chartered Accountants
FRN:303054E
Sd/-
CA Sweta Shah
Partner
Place: Kolkata MRN: 067564
Date: 30th May, 2026 UDIN: 26067564VULNDR1244
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