We have audited the accompanying Standalone Financial Statements of JBF IndustriesLimited ("the Company”), which comprise the balance sheet as at 31st March 2025,the Statement of Profit and Loss (including Other Comprehensive Income), theStatement of Changes in Equity and the Statement of Cash Flows for the year thenended, and notes to the Standalone Financial Statements, including a summary ofmaterial accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us, the aforesaid standalone financial statements give the information requiredby the Companies Act, 2013 ("the Act”) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section133 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 March 31, 2025, and its profit includingother comprehensive income, changes in equity and its cash flows for the year endedon that date.
Basis for Qualified Opinion
(i) As mentioned in Note 21.1 to the Standalone Financial Statements, provision ofinterest @ NIL% p.a. on its borrowings aggregating to ? 2,473.79 crores for theyear ended from1st April 2024 to 31st March 2025 as against the documentedrate, resulting into lower provision of finance cost for the year ended31st March, 2025 by ? 394.62 crores, which is not in compliance with IndAS -23 "Borrowings Costs” read with Ind AS-109 on "Financial Instruments”.
Aggregate amount of Interest not provided for as at 31st March, 2025 is? 1,561.50 crores. Had the interest been provided at the documented rate,finance cost, net loss after tax for the year, total comprehensive income andEPS for the year ended 31st March, 2025 would have been ? 394.62 crores,? (399.88) crores, ? (399.88) crores, ? (48.84) as against the reported figureof NIL, ? (5.27) crores ? (5.27) crores and ? (0.64) in the above Statements.
Further current financial liabilities-others and other equity as at 31st March,2025 would have been ? 854.47 crores and ? (3,329.24) crores respectively asagainst reported figure of ? 459.85 crores and ? (2,934.62) crores respectivelyin the above results.
(ii) As mentioned in Note 24.3 to the Standalone Financial Statements regardingthe application filed with the National Company Law Tribunal (NCLT), by oneof the operational creditors of JBF RAK LLC (JBF RAK), situated at UAE, asubsidiary of the company, against the Company, for supply of raw materials toJBF RAK and claim of ?128.48 Crores (US$ 19,899,091.53) as per notice dated17th February, 2020. No provision has been considered for the above claim forthe reasons stated therein. The matter described in above has uncertaintiesrelated to the outcome of the legal proceedings and hence we are unable toquantify the provisions for above claim at this stage, if any, and its consequentialimpacts on the financial statements of the Company.
We concluded our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act, 2013 (the Act). Our responsibilitiesunder those Standards are further described In the Auditor's Responsibility forthe Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the Standalone Financial Statements under the provisionsof the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics.We believe that the audit evidence we have obtained are sufficient and appropriate toprovide a basis for our opinion on the Standalone Financial Statements.
We draw your attention to:-
(i) Note 24.2 to the Standalone Financial Statements, regarding invocation ofcorporate guarantee given by the company to the lender of JBF Petrochemicals Ltd.("JPL”). The company has denied above invocation and is of the view that aboveinvocation is not tenable for the reasons explained therein and hence no provisionagainst the claims under the invoked corporate guarantee is considered necessary.
(ii) Note 33 to the Standalone Financial Statements that there is a significant andmaterial impact on the "going concern” status of the Company and its futureoperations. The Company's ability to sustain itself and generate revenuesto meet its financial commitment has been critically dented. Therefore, thecompany ceases to continue as a going concern.
(iii) Note 33 to the Standalone Financial Statements that the Company has receiveddemand notice from Tamilnad Mercantile Bank Ltd, (TMBL) under Section 13(2)of the Securitization and Reconstruction of Financial Assets and Enforcement ofSecurity Interest Act, 2OO2 ("Sarfaesi Act”) and the Rules framed thereunderfor recovery of their dues vide letter dated 23rd November, 2O21 amountingto ? 32.94 Crores plus future interest as applicable thereon in terms of loanagreement. TMBL has denied to release the pro rata charge on assets of thecompany which was transferred to CFM and finally to Madelin EnterprisesPrivate Limited (MEPL).
Thereafter, TMBL approached DRT Mumbai for recovery of their dues from theCompany and CFM. DRT Mumbai has passed interim order and CFM challengedthe maintainability of TMBL application in DRAT where their contention wasupheld. Thereafter, TMBL has approached Gujarat High Court and the matter issubjudice. TMBL has also filed an IA with NCLT.
(iv) Note 36 to the statement, regarding non-preparation of consolidated financialstatement due to the reasons mentioned therein. The company has subsidiariesand is required to present consolidated financial results. The Company has notprepared and presented the consolidated financial statements/results requiredby Companies Act, 2013 and IND AS 110 "Consolidated Financial Statements”and the Listing Regulation. However, as on 31st March 2023, M/s. MadelinEnterprises Pvt. Ltd., has acquired the holding of JBF Industries Ltd. in itsSubsidiary Company JBF Global Pte Limited situated at Singapore under theSarfaesi Act but pending transfer of shares in the name of Madelin EnterprisesPvt. Ltd., the shares are still in the company as on date.
(v) Note 38 to the standalone financial statements, regarding the vacancy of thepost of the Chief Executive Officer and Chief Financial officer since 1st May,2019 and 1st July 2023 due to the reason as mention therein. Also, regardingthe vacancy of Whole-time Company Secretary as Key Managerial personnel(KMP) since 10th June, 2024 as required by section 203 of CompaniesAct 2013 read with Rule 8 & Rule 8A of The Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014.
(vi) The company has not appointed any Internal Auditor, which is required bysection 138 of the Companies Act 2013.
(vii) The company has paid remuneration to Directors amounting to ? 84.72 Lakhsas against the maximum limit of ? 60 Lakhs as laid down under Schedule V ofthe Companies Act, 2013, which is in excess of limit laid down under section197 of the Companies Act, 2013.
(viii) There is a difference of ? 11.46 Lakhs in GST Input credit as appearing in thebooks of accounts and as appearing on the GST Electronic Credit Ledger. Thesame is pending reconciliation.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the Standalone Financial Statements of the current year.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. In addition to the matter described in the Basisfor Qualified Opinion, Material Uncertainty Related to Going Concern & Emphasis ofmatters section, we have determined the matters described below to be key auditmatters to be communicated in our report.
How our audit addressed the key audit matter
(i) Carrying value of trade receivables
As mentioned in Note 5 to the Standalone Financial Statements, total tradereceivables were aggregating to ? 8.09 Crores as on 31st March 2025, out of above4.98 Crores were provided.
The collectability of the Company's trade receivables and the valuation of allowancefor impairment of trade receivables requires a significant management judgment.Management considers Specific factors including the age of the balance, location ofcustomers, existence of disputes, recent historical payment patterns and any otheravailable information concerning the creditworthiness of counterparties. Managementuses this information to determine whether a provision for impairment is requiredeither for a specific transaction or for a customer's balance overall.
Accordingly, it has been determined as a key audit matter.
Our audit procedures included the following:
• We selected a sample of the larger trade receivable balances where a provisionfor impairment of trade receivables was recognized and understood the rationalebehind management's judgment.
• Assessing the ageing of trade receivables, the customer's historical paymentpatterns and whether any post year-end payments had been received up to thedate of completing our audit procedures.
• Reviewing the available evidence including correspondences, if any, legal noticesrelated to disputes, where applicable.
• Assessing the Company's provisioning policy and evaluating with reference toapplicable accounting standards.
• Considered the completeness and accuracy of the disclosures.
The Company's Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director's report included inthe annual report but does not include the Standalone Financial Statements and our auditor's report thereon.
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 identified above and, in doing so, consider whether the otherinformation is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those chargedwith governance. We have nothing to report in this regard.
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 standalone financial statements thatgive a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includesmaintenance 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 fraudsand other Irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe 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 Company's ability to continue as a going concern, disclosing, as applicable, mattersrelated 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 realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
The Company was admitted under CIRP vide an order dated 25.01.2024 passed by the National Company of Law Tribunal (NCLT), Ahmedabad Bench and the management of theCompany is undertaken by the Resolution Professional (RP) and the powers of the Board of Directors stand suspended w.e.f. 25.01.2024.
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 orerror, 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 accordancewith 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:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsiveto 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 fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls 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 with reference to Standalone FinancialStatements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertaintyexists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modifyour 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 tocease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope ofour 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 anysignificant 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 where applicable, relatedsafeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone FinancialStatements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure aboutthe 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 wouldreasonably be expected to outweigh the public interest benefits of such communication.
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 Companies Act, 2013, we give in the "Annexure B” 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, we report that:
a) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above, we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary orthe purposes of our audit.
b) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above, in our opinion, proper books of account as required by lawhave been kept by the Company so far as it appears from our examination ofthose books.
c) The Balance Sheet, the Statement of Profit and Loss (including othercomprehensive income), the statement of change in equity and the CashFlow Statement dealt with by this Report are in agreement with the books ofaccount.
d) Except for the effects of matters described in the Basis for Qualified Opinionparagraph above, in our opinion, the aforesaid Standalone Financial Statementscomply with the Indian Accounting Standards specified under Section 133 ofthe Act, read with Companies (Indian Accounting Standards) Rules 2015, asamended.
e) The matters described in paragraph "Basis for Qualified Opinion” and "Emphasisof Matter” have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors ason 31st March, 2025 taken on record by the Board of Directors, none of thedirectors is disqualified as on 31st March, 2025 from being appointed as adirector in terms of Section 164(2) of the Act.
g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls,refer to our separate Report in "Annexure A” to this report.
h) With respect to the other matters to be included in the Auditor's Report inaccordance 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 theexplanations given to us, the remuneration paid or provided by the Companyto its directors during the year is not in accordance with the provisions ofsection 197 of the Act. The Remuneration paid Directors is in excess of limitlaid down under section 197 of the Act.
i) With respect to the other matters to be included in the Auditor's Reportingaccordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014, inour opinion and to the best of our information and according to the explanationsgiven to us:
i. The Company has disclosed the impact of pending litigations as at31st March 2025 on its financial position in its Standalone Financial Statementsas referred in Note 24 to the Standalone Financial Statements.
ii. Except for the effects of matters described in the Basis for Qualified Opinionparagraph above, the Company has made provision, as required under theapplicable law or accounting standards, for material foreseeable losses, if any,on long-term contracts including derivative contracts.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The management has represented that
a. to the best of its knowledge and belief, other than as disclosed in the notes nofunds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind to the accounts, of funds) by thecompany to or in any other person(s) or entity(ies), including foreign entities("Intermediaries”), with the understanding, whether recorded in writing orotherwise, that the Intermediary shall, whether, directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by oron behalf of the company ("Ultimate Beneficiaries”) or provide any guarantee,security or the like on behalf of the Ultimate Beneficiaries.
b. to the best of its knowledge and belief, other than as disclosed in the notesto the accounts, no funds have been received by the company from anyperson(s) or entity(ies), including foreign entities ("Funding Parties”), with theunderstanding, whether recorded in writing or otherwise, that the companyshall, whether, directly or indirectly, lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries”) or provide any guarantee, security or the like onbehalf of the Ultimate Beneficiaries.
c. Based on the audit procedures, nothing has come to our notice that hascaused us to believe that the representations under sub-clause (a) and (b)contain any material mis-statement.
v. No dividend has been paid during the year by the company.
vi. Based on our examination, the accounting software used by the company has the
feature to maintain audit trail.
Chartered AccountantsFRN 002908C
Place: Udaipur Membership No. . 078398
Date: 28.05.2025 UDIN: 25078398BMHZCN5440