jct ltd Auditors report

Opinion

We have audited the accompanying financial statements of JCT Limited (the "Company"), which comprise the Balance Sheet as at 31 March, 2023, and 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 then ended, and notes to the financial statements including 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 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 accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2023 and its loss (including Other Comprehensive Income), its changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor?s Responsibilities 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

Note 39.6 : regarding, preparation of the financial statments on going concern basis in the presence of certain events/ conditions indicating the existence of uncertainty on the Company?s ability to continue as a going concern, on the grounds as fully described in the said Note.

Note 39.21 : regarding the adjustment, if any required due to non-confirmation / reconciliation of balances in the accounts of the parties, which in view of the management will not have a material impact, and will be accounted for in the period of confirmation / reconciliation.

Our opinion on the financial statements is not modified in respect of the above matters.

Key Audit Matters

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 year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming 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.

Key Audit Matters	Response of the Auditor
Fair Value measurement of Financial Instruments	Our Audit Procedure:
(Refer to Note 39.11 to the financial statements)	The Company has carried out the valuation of the financial
Fair values of financial assets and financial liabilities have been measured using valuation techniques where the financial instruments are not quoted in active market. The inputs to these techniques / models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility, which involve high degree of the estimation and judgement and could affect the reported fair value of financial instruments	instruments after applying judgments and estimates. We have conducted the verification of the data provided to us by the Company with respect to its correctness and completeness visa-vis the financial accounts / records of the Company and held interaction with the management to understand their process and results and the implementation and usage of valuation techniques / models. This included the review of the controls over adjustments to mitigate model limitations and assumptions.
	Our Results: The results of our testing were satisfactory and we considered the fair value of the financial instruments assets and liabilities recognised to be acceptable.

Key Audit Matters	Response of the Auditor
Preparation of the financial statements on Goina Concern basis	Or Audit Procedure:
(Refer to Note No. 39.6 to the financial statements)	We obtained an understanding of the management?s process of assessment and evaluation of the going concern basis of
The accumulated losses of the earlier years and the substantial losses during the current year which are mainly owing to high finance cost and weak sale / operations have resulted in negative net worth and the significant financial crunch and cash flow mismatch, and there are continuous delays and defaults in repayment of certain debt obligations, and unpaid substantial liabilities including employees and statutory dues, etc. These events / conditions indicate the existence of uncertainty on the Company?s ability to continue as a going concern. However, the financial statements have been prepared on a going concern basis, considering the grounds as fully described in the Note 39.6 to the financial statements.	accounting and enquired the management as to its knowledge of events or conditions and related business risks beyond the period of assessment used by management that may cast doubts on the Company?s ability to continue as going concern. We obtained the information about management?s plans to consider whether it is likely that the adverse effects will be mitigated for the foreseeable future, and evaluated the likelihood of effective implementation of such plans. We also reviewed the documentations / evidence / facts in support of the financial information / projections of the management in this regard.
The said management assessment involves making a judgement at a particular point in time, about inherently uncertain future outcomes of events or conditions and the factors relevant to this judgement involves high degree of uncertainty and subsequent events may result in outcomes that are inconsistent with the judgments that were reasonable at the time they were made. As Auditor, our responsibilities are to obtain sufficient appropriate audit evidence regarding, and conclude on, the appropriateness of mangements?s use of the going concern basis, however, as the potential effects of inherent limitations on the auditor?s ability to detect material misstatements are greater than for future events or conditions that may cause an entity to cease to continue as a going concern, the Auditor cannot predict such future events or conditions and therefore the evaluation and assessment of the going concern basis of accounting as assessed by the management involved significant level of subjectivity, judgment and estimation, as detailed above, and therefore the same has been considered as Key Audit Matter by us during our audit.	Our Results: The results of our testing were found satisfactory and the preparation of the financial statements on a going concern basis was found to be appropriate.

Information Other than the Financial Statements and Auditor?s Report thereon

The Company?s Board of Directors is responsible for the other information. The other information comprises the Corporate Governance Report and Directors? Report, including annexures, if any, thereon, (but does not include the financial statements and our auditor?s report thereon), which 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 will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Corporate Governance Report and Directors? Report, including annexures, if any, thereon, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance 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 including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards ("Ind AS") notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

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, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities 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 skepticism throughout the audit. We also:

- Identify 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.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)

(i) of the Companies Act, 2013, 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.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- 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.

- 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.

Other Matter

We draw attention to the fact that corresponding figures for the year ended 31 March, 2022 are based on previously issued financial statements of the Company that were audited by the predecessor auditor who expressed an unmodified opinion on those financial statements dated 28 May, 2022.

Our opinion is not modified in respect of the above matter.

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 the Annexure-‘A?, a statement on the matters specified in paragraph 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. in our opinion, proper books of account as required by law have been kept by the Company so far as 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 Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d. in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards ("Ind AS") notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

e. on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2023 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure-‘B?;

g. in our opinion, the remuneration paid by the Company to its Director is in accordance with the provisions of Section 197 read with Schedule V of the Act; and

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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 39.1 to the financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts;

iii. There has been no amount, 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, 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, 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. No dividend was declared or paid during the year; hence, the said clause is not applicable.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining the books of accounts using accounting software which has the feature of recording audit trail (edit log) facility is applicable to the Company with effect from 01 April, 2023, therefore, reporting under rule 11(g) is not appliable for the financial year ended 31 March, 2023.

ANNEXURE-A? TO THE INDEPENDENT AUDITORS? REPORT

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements? section of the independent auditor?s report of even date on the financial statements of ‘JCT Limited for the year ended 31 March, 2023)

(i) In respect of the Company?s Property, plant and equipments, Intangible assets, and Right-of-use assets;

a. (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, plant and equipment and relevant details of Right-of-use assets.

(B) The Company has maintained proper records showing full particulars of the Intangible assets.

b. As explained to us, the Property, plant and equipments and Right-of-use assets are physically verified by the management at reasonable intervals, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds in respect of the land and buildings included in the financial statements under Property, plant and equipments (other than buildings where the Company is the lessee and the lease agreement is duly executed in its favour) are held in the name of the Company.

d. The Company during the year has not revalued any of its Property, plant and equipment and Right-of-use assets, except the land which has been valued at its fair value based on the valuation reports of the external registered valuers. Further, the change in the value of the land on its fair valuation is not material as compared to its carrying amount.

e. According to the information and explanations given to us and based on our examination of the records of the Company, no proceedings have been initiated during the year or are pending against the Company as at March 31,2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, as amended.

(ii) (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year and in our opinion, the coverage and procedure of such verification by the management is appropriate, having regard to the volume and nature of the inventories held by the Company. The discrepancies noticed on such physical verification

as compared to book records were not material and have been appropriately dealt with in the books of accounts.

(b) The Company has been sanctioned working capital limits / facilities from banks and financial institutions on the basis of security of current assets. The statements filed by the Company with the banks / financial institutions were generally found to be in agreement with the books of accounts as per our examination of the records.

(iii) (a) and (b) According to the information and explanations given to us and based on our examination of the records of the Company, during the year the Company has not made any investment, or has not provided any loans or provided advances in the nature of loans, or stood gauatantee, or provided security to any other entity. However, the Company is having the investments since earlier year/s. Further Corporate guarantee of Rs. 400 lakhs (given in 1993) towards Equipment Credit Scheme and another of Rs. 3,580 lakhs (given in 1998) for the term loan availed by JCT Electronics Ltd. (an erstwhile Associate Company), are outstanding since earlier years, as detailed in note 39.2 to the financial statements. The Company has been legally advised that these guarantees are not sustainable, as described in the said note.

(c) , (d), (e) and (f) As the Company has not granted any

loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year, nor such loans or advances were outstanding since earlier year/s, reporting under these clauses is not applicable.

(iv) According to the information and explanations given to us, and on the basis of our examination of the records, the Company has complied with the provisions of Section 185 and 186 of the Act in respect of the loans granted, investment made and guarantees and security provided, as applicable.

(v) The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence reporting under this clause is not applicable.

(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under sub-section (1) of Section 148 of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) In respect of statutory dues:

a. According to the information and explanations given to us and the records of the Company examined

by us, in our opinion, the Company is not regular in depositing undisputed statutory dues including Goods and Service Tax, provident fund, employees? state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues as applicable with the appropriate authorities, and there have been delay in deposit of these dues during the year. According to the information and explanations given to us, though there were unpaid overdue amounts towards the aforesaid dues as at the yearend, however, no undisputed amounts payable in respect of the same were outstanding as at 31 March, 2023 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, and the records of the Company examined by us, the disputed statutory dues aggregating to Rs. 3,469.93 lakhs, have not been deposited on account of matters pending in appeals before appropriate authorities as under:

Name of the Statute	Nature of the dues	Forum where dispute is pending	Amount (Rs. in lakhs)
Central Excise Act, 1944 and Service Tax	Excise Duty/ Service Tax	Upto Commissioner Level	20.65
		CESTAT/ Tribunal	1,152.81
Central Sales Tax, VAT Act of various states	Sales tax / VAT	Tribunal	304.61
Punjab Tax on Entry of Goods into Local Areas Act, 2000	Entry Tax	Asstt. Commissioner	158.78
		Tribunal	1,580.08
Goods and Service Tax	GST	Hon?ble Punjab & Haryana High Court	190.37
Income Tax Act, 1961	Income Tax	Commisioner Income Tax (Appeals)	62.63
TOTAL			3,469.93

(viii) There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). However, a demand of Rs. 62.63 lakhs has been raised by the Income Tax Authorities for the assessment year 2021-22 considering certain income as unaccounted based on the documents seized during the income tax search conducted during the year 2021-22, which has been contested by the Company by filing the appeal before CIT(Appeals) as detailed in Note 39.7 to the financial statements.

(ix) (a) Based on the audit procedures and according to the information and explanations given to us, the Company has defaulted in the repayment of the principal and interest in the case of certain term loans. The period and amount of continuing defaults as on the balance sheet date are as under:

Nature of Borrowing	Name of lender	Amount not paid on due date and outstanding as at 31 March, 2023 (Rs. in lakhs)	Whether principal or interest	No. of days delay or unpaid	Remarks, if any
Term Loan - Secured	Phoenix Trust FY 19.5 Scheme G	2,630.59	Principal	From June, 2022 to March, 2023
		1,442.30	Interest	From September, 2021 to March, 2023
		1,949.57	Penal Interest	Since 2020-21	Considering the eruption of business due to COVID 19, the matter of waiver of said interest has been taken with the lenders.
	Phoenix ARC Pvt. Limited	305.00	Principal	From June, 2022 to March, 2023
		68.87	Interest	From November, 2022 to March, 2023

(b) Based on the audit procedures and according to the information and explanations given to us, the Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(c) During the year, the Company has availed the term loans of Rs. 900 lakhs from certain existing banks under GECLS 2.0 Extension Loan scheme. On an overall examination of the records of the Company, the same have been found to be applied for the purpose for which the same were availed.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) & (f) The Company has no subsidiary, associate or joint venture, hence reporting under these clauses is not applicable.

(x) (a) The Company has neither raised funds by way of

initial public offer nor further public offer (including debt instruments) during the year, hence reporting under this clause is not applicable.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year, hence reporting under this clause is not applicable.

(xi) (a) Based on the audit procedures and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of Section 143 of the Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014, as amended, with the Central Government, during the year and upto the date of this report.

(c) According to the information and explanations given to us and based on our examination of the records of the Company, no whistle blower complaint was received by the Company during the year.

(xii) The Company is not a Nidhi Company, hence reporting under clauses 3(xii)(a) to 3(xii)(c) is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable. The details of such transcations have been disclosed in the financial statements, as required by Ind AS 24 - Related Party Disclosures.

(xiv) (a) In our opinion and based on our examination, the

Company has an adequate internal audit system commensurate with the size and the nature of its business.

(b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year, in determining the nature, timing and extent of our audit procedures.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with Directors or persons connected with them.

(xvi) (a), (b) and (c) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under these clauses is not applicable.

 

4

(d) In our opinion, there is no Core Investment Company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under this clause is not applicable.

(xvii) The Company has incurred cash losses during the current financial year covered by our audit, however, no such losses were incurred in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of the Company during the year, however, there is change of statutory auditors during the year due to retirement of the existing auditor on completion of their term.

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, and considering the Company?s action / plan to improve its liquidity/cash flow by disposing off its non-core properties as described in Note 39.6 to the financial statements, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and 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.

(xx) (a) & (b) During the year, no amount was required to be spent towards the Corporate Social Responsibility as Company has not made average net profits during the three immediately preceding financial years. Hence reporting under this clause is not applicable.

ANNEXURE-B? TO THE INDEPENDENT AUDITORS? REPORT

(Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements? section of the independent auditors? report of even date on the financial statements of ‘JCT Limited? for the year ended 31 March, 2023)

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 of JCT Limited ("the Company") as of 31 March, 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management?s Responsibility for Internal Financial Controls

The Board of Directors of the Company 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" (the "Guidance Note") 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 company?s policies, the safeguarding of its assets, the prevention 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 Act.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Company?s 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 the Institute of Chartered Accountants of India and deemed to be prescribed under section 143(10) of the Act 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? judgement, 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 Company?s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company?s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company?s 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company?s 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, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements 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.