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J K Cements Ltd.

BSE: 532644 Sector: Industrials
NSE: JKCEMENT ISIN Code: INE823G01014
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VOLUME 4399
52-Week high 3690.00
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P/E 30.71
Mkt Cap.(Rs cr) 24,250
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OPEN 3240.00
CLOSE 3195.65
VOLUME 4399
52-Week high 3690.00
52-Week low 1462.80
P/E 30.71
Mkt Cap.(Rs cr) 24,250
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

J K Cements Ltd. (JKCEMENT) - Auditors Report

Company auditors report

To the Members of J.K. Cement Limited

Report on the Audit of the Standalone Ind AS

Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof J.K. Cement Limited ("the Company") which comprise the Balance sheet as at31 March 2021 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the standalone Ind AS financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2021 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct.

Our responsibilities under those Standards are further described in the'Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements'section of our report. We are independent of the Company in accordance with the 'Code ofEthics' issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone ind AS financial statements.

Emphasis of Matter on COVID-19

We draw attention to Note 45 to the standalone Ind AS financialstatements which describes the management's assessment of the impact of uncertaintiesrelated to outbreak of COVID-19 on the future business operations of the Company.

Our opinion is not modified in respect of this matter.

Emphasis of Matter on CCI Case

We draw attention to Note 36 (A) to the standalone Ind AS financialstatements wherein it has been stated that the Competition Commission of India (' CCI')has imposed penalty of Rs. 12854 lacs ('first matter') and Rs. 928 lacs ('second matter')in two separate orders dated 31 August 2016 and 19 January 2017 respectively for allegedcontravention of provisions of Competition Act 2002 by the Company. The Company has filedappeals against the above orders.

The National Company Law Appellate Tribunal (' NCLAT') on hearing theappeal in the first matter upheld the decision of CCI for levying the penalty vide itsorder dated 25 July 2018. Post order of the NCLAT CCI issued a revised demand noticedated 7 August 2018 of Rs. 15492 lacs consisting of penalty of Rs. 12854 lacs andinterest of Rs. 2638 lacs. The Company has filed appeal with Hon'ble Supreme Courtagainst the above order. Hon'ble Supreme Court has stayed the NCLAT order. While theappeal of the Company is pending for hearing the Company backed by a legal opinionbelieves that it has a good case and accordingly no provision has been considered in thebooks of accounts.

In the second matter demand had been stayed and the matter is pendingfor the hearing before NCLAT. While the appeal of the Company is pending for hearing theCompany backed by a legal opinion believes that it has a good case and accordingly noprovision has been considered in the books of accounts.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended 31 March 2021. These matters were addressed in the context of ouraudit of the standalone Ind AS financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Impairment assessment of Investments in J.K. Cement (Fujairah) FZC a wholly owned subsidiary (as described in note 4A 4B & 5 of the standalone Ind AS financial statements)
As at 31 March 2021 the Company has an investment in J.K. Our audit procedures included the following:
Cement (Fujairah) FZC a wholly owned subsidiary of Rs. 69237.51 lacs (including share application money of Rs. 2180.05 lacs) paid in current year against 3% non-cumulative redeemable preference shares in J.K. Cement (Fujairah) FZC the allotment which is expected to be made by end of June 2021. • Gained an understanding of the impairment assessment process and evaluated the design and tested the operating effectiveness of controls.
J.K. Cement Works (Fujairah) FZC (step down subsidiary) is incurring losses and its entire net worth is eroded. As a result an impairment assessment was required to be performed by the Company by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be recognised. • Assessed the Company's valuation methodology applied in determining the recoverable amount.
Accordingly during the current year based on business valuation of J.K. Cement Works (Fujairah) FZC" by an independent external valuer the Company has recognized provision towards diminution of carrying amount of investment J.K. Cement (Fujairah) FZC of Rs. 16686.50 lacs (Previous Year Rs. 16151.42 lacs). The Total amount of Rs. 16686.50 lacs (Previous Year Rs. 16151.42 lacs) has been disclosed as exceptional item. • Assessed the assumptions of the cash flow forecasts including weighted average cost of capital expected growth rates and terminal growth rates used.
For the purposes of the above impairment testing value in use has been determined by forecasting and discounting future cash flows. Furthermore the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. • Discussed potential changes inputs as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were appropriate.
Further the determination of the recoverable amount of the investments in J.K. Cement (Fujairah) FZC involved judgments due to inherent uncertainty in the assumptions supporting the recoverable amount of these investments. • Involved specialists to assist us in evaluating the valuation methodologies and sensitivity testing of key assumptions used by management in determining the recoverable value headroom.
Accordingly the impairment assessment of investments in J.K. Cement (Fujairah) FZC was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • Tested the arithmetical accuracy of the valuation model.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Claims litigations and contingent liabilities
(as described in note 36A of the standalone Ind AS financial statements)
As of 31 March 2021 the Company has disclosed contingent liabilities of Rs. 20635.15 lacs relating to tax and legal claims. Our audit procedures included the following:
There are several pending legal and regulatory cases against the Company across various jurisdictions. Accordingly management exercises its judgement in estimation of provision required • Gained an understanding of the process of identification of claims litigations and contingent liabilities and evaluated the design and tested the operating effectiveness of key controls.
in respect of such cases. The evaluation of management's judgements including those that involve estimations in assessing the likelihood that a pending claim will succeed or a liability will arise and the quantification of the ranges of potential financial settlement have been a matter of most significance during the current year audit. • Obtained the summary of Company's legal and tax cases and assessed management's position through discussions with the legal head tax head and Company's management on both the probability of success in significant cases and the magnitude of any potential loss.
Furthermore the Company has operations across many jurisdictions and is subject to taxation related litigations as per local tax regulations. Evaluation of the outcome of the taxation related matters and whether the risk of loss is remote possible or probable requires judgement by management given the complexities involved. • Obtained responses from third-party legal counsel against independent confirmation rolled out by us and conducted discussion with them regarding material cases.
Accordingly due to large number of claims and complexity/ judgement involved in outcome of these litigations. Claims litigations and contingent liabilities was determined to be a key audit matter in our audit of the standalone Ind AS financial statements • Inspected external legal opinions and other evidence to corroborate management's assessment of the risk profile in respect of legal claims.
• Engaged tax specialists to assess management's application and interpretation of tax legislation affecting the Company and to consider the quantification of exposures and settlements arising from disputes with tax authorities in the various tax jurisdictions.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Revenue Recognition - Discounts incentives rebates etc.
(as described in note 27 of the standalone Ind AS financial statements)
For the year ended 31 March 2021 the Company has recognized revenue from operations of Rs. 623341.79 lacs. Our audit procedures included the following:
Revenue is measured net of discounts incentives rebates etc. earned by customers on the Company's sales. • Considered Company's revenue recognition policy and its compliance in terms of Ind AS 115 'Revenue from contracts with customers'.
Due to the Company's presence across different marketing regions within the country and the competitive business environment the estimation of the various types of discounts incentives and rebate schemes to be recognised based on sales made during the year is material and considered to be complex and judgmental and dependent on various performance obligations and market conditions. • Assessed the design and tested the operating efi'ectiveness of internal controls with regards to approvals calculation provision and disbursement of discounts incentives and rebates.
Therefore there is a risk of revenue being misstated as a result of faulty estimations over discounts incentives and rebates. • Performed sample test of supporting documentation for computation of discounts incentives and rebates recorded and/or disbursed during the year including credit notes issued after the year end date.
Accordingly given the complexity and judgement involved in the assessment of provisions required for discounts incentives and rebates Revenue recognition - Discounts incentives rebates etc. was determined to be a key audit matter in our audit of the Standalone Ind AS financial statements. • Performed analytical review and compared the management's assessment of discounts incentives and rebates recorded for the current year with historical trends of discount given and reversal of such discounts incentives and rebates to assess the adequacy of provisions made during the current year.
• Performed sample test of manual journals posted to discounts incentives and rebates to identify unusual or irregular items.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Estimate with respect to recognition of Minimum Alternate Tax
(as described in note 20 of the standalone Ind AS financial statements)
As at 31 March 2021 deferred tax assets in respect of 'MAT credit entitlement' recognized in the standalone Ind AS financial statements is Rs. 13462.96 lacs. • Our audit procedures included the following:
Deferred tax assets are recognized for MAT credit available to the extent that it is probable that the Company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward. • Developed an understanding of the nature of the Company's tax structure and of the key tax positions.
The Company's ability to recognize deferred tax assets for 'MAT credit entitlement' is assessed by management at the end of each reporting period considering forecasts of future normal taxable profits and if required the Company will write down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period. The assumptions used in the projections are determined by management. • Assessed the design and tested the operating efi'ectiveness of internal controls related to recognition of deferred tax assets with respect to MAT credit entitlement.
Given the degree of estimation and judgement involved in projection of future taxable normal profits and the fact that if the MAT credit is not utilized within the block of 15 years (immediately succeeding the assessment year in which the credit was generated) it will lapse management's decision to create deferred tax assets in respect of 'MAT credit entitlement' is determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • Assessed the Company's tax planning in relation to the recovery of MAT credit assets by comparing the forecasted taxable profit with historical data and budgets approved by the board of directors.
• Analyzed and tested management's projections and corresponding assumptions used to determine the likelihood that MAT Credit recognized as on the reporting date will be recovered through future tax as per normal provisions.
• Checked the consistency of business plan with the latest management estimates prepared as a part of the budgeting process and also the reliability of the process by which the estimates were computed by assessing the reasons for differences between projected and actual performances.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.

We have determined that there are no other key audit matters tocommunicate in our report.

Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the standalone Ind AS financial statements and our auditor'sreport thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Actread with [the Companies (Indian Accounting Standards) Rules 2015 as amended]. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether

a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone IndAS financial statements for the financial year ended 31 March 2021 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("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 1" a statement on thematters 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changes

in Equity dealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) The matter described in Emphasis of Matter on CCI case' paragraphabove in our opinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controlswith reference to standalone Ind AS financial statements and the operating effectivenessof such controls refer to our separate Report in "Annexure 2" to this report;

(h) In our opinion the managerial remuneration for the year ended 31March 2021 has been paid / provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;

(i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 36 A to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company

Annexure 1 Referred to in Paragraph 1 of our Report of Even Date UnderSection 'Report on other Legal and Regulatory Requirements'

J.K. Cement Limited ('the Company')

i. a. The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

b. All property plant and equipment have not been physically verifiedby the management during the year but there is a regular programme of verification whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. No material discrepancies were noticed on such verification.

c. According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company except 1 case of leasehold land 2 case offreehold land and 2 cases of freehold mining land having gross block of Rs. 1353 lacs(net block of Rs. 0.75 lacs) gross block of Rs. 168.43 lacs (net block: Rs. 168.43 lacs)and gross block of Rs. 54.19 lacs (net block: Rs. 40.98 lacs) respectively as at 31 March2021 for which title deeds are in the name of the erstwhile company that merged with theCompany pursuant to a scheme of amalgamation and arrangement as approved by the honorableHigh Court in earlier years. Also refer note 2 of the accompanying standalone Ind ASfinancial statements.

ii. The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat 31 March 2021 and no material discrepancies were noticed in respect of suchconfirmation.

iii. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of the investments made and guarantees provided by it. TheCompany has not granted any loan or provided any security to the parties covered undersection 185 and 186.

v. The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to the manufacture ofcement and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.

vii. a. The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax duty of custom goods and service tax cess and other statutorydues applicable to it.

b. According to the information and explanations given to us and auditprocedures performed no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax duty of custom goods and service tax cess andother statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

c. According to the records of the Company the dues of income-taxexcise duty wealth tax sales-tax value added tax goods and service tax cess onaccount of any dispute are as follows:

Name of the Statute Nature of Dues Period to which Amount relates Forum where dispute is pending Amount (' in lacs)
The Uttar Pradesh Tax on Entry of Goods into Local Areas Act 2007 Entry tax 2005-2006 to 2009-2010 Supreme Court 314.48
The Bihar Tax on Entry of Goods into Local Areas for Consumption Use or Sale Therein Act 1993 Entry Tax 2008-2009 to 2015-2016 Appellate Authorities 203.15
Central Excise Act 1944 Excise Duty 1989-1990 Supreme Court 419.02
Excise Duty 1999-2000 to 2007- 2008 High court 23.97
Excise Duty 1999-2000 to 2007- 2008 Appellate Authorities 1828.45
Service Tax(Finance Act1994) Service Tax 2005-2006 to 2007- 2008 Tribunal(s) 48.56
Finance Act 2008 (State) Environment & Health Cess 2008-2009 to 2015-2016 High court 3323.44
Sales tax/value added tax (VAT) Sales Tax VAT interest and Penalty 2013-14 to 2016-2017 High Court 232.04
Sales Tax VAT interest and Penalty 2012-2013 Tribunal(s) 122.28
Sales Tax VAT interest and Penalty 1991-1992 to 2016-2017 Appellate Authorities 401.05
Income-tax Act 1961 Income Tax 2007-2008 to 2008-2009 High Court 1087.48

According to information and explanation given to us there are no duesof Provident Fund and ESI which have not been deposited on account of any dispute.

viii. In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto a financial institution banks debenture holders or government.

ix. In our opinion and according to the information and explanationsgiven by the management and audit procedures performed monies raised by way of term loansand debt instruments were applied for the purposes for which they were raised.

Further based on the information and explanations given by themanagement the Company has not raised any money way of initial public offer / furtherpublic offer.

x. Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the Standalone Ind AS financial statements andaccording to the information and explanations given by the management we report that nofraud by the company or no material fraud on the company by the officers and employees ofthe Company has been noticed or reported during the year.

xi. According to the information and explanations given by themanagement and audit procedures performed the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.

xii. In our opinion the Company is not a Nidhi company. Therefore theprovisions of clause 3(xii) of the order are not applicable to the Company and hence notcommented upon.

xiii. According to the information and explanations given by themanagement and audit procedures performed transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the notes to the financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the Company and not commented upon.

xv. According to the information and explanations given by themanagement and audit procedures performed the Company has not entered into any non-cashtransactions with directors or persons connected with him as referred to in section 192 ofCompanies Act 2013.

xvi. According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

Annexure 2 to the Independent Auditor's Report of Even Date on theStandalone IND as Financial Statements of J.K. Cement Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of J.K. Cement Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these standalone IND ASfinancial statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements and their operating effectiveness. Our auditof internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting withReference to these Standalone Ind AS Financial Statements

A company's internal financial control over financial reporting withreference to these standalone Ind AS financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone Ind AS financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting with Reference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these standalone Ind AS financial statementsincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial control over financial reporting withreference to these standalone IND AS financial statements may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standaloneInd AS financial statements and such internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements were operating effectivelyas at 31 March 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
Partner
Place of Signature: Faridabad Membership Number: 086370
Date: 12 June 2021 UDIN: 21086370AAAABH9151

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