J K Cements Ltd Directors 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 I nd AS financial statements of J.K. Cement Limited (“the Company”), which comprise the Balance sheet as at March 31 2020, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“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 March 31, 2020, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Rs Auditors 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 Rs 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 audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter on COVID-19

We draw attention to Note 46 to the standalone Ind AS financial statements, which describes the managements assessment of the impact of uncertainties related to outbreak of COVID-19 on the business operations of the Company.

Our opinion is not modified in respect of this matter.

Emphasis of Matter on CCI Case

We We draw attention to Note 36 (A) to the standalone Ind AS financial statements wherein it has been stated that the Competition Commission of India (CCI) has imposed penalty of Rs 12,854 Lacs (‘first matter) and Rs 928 Lacs (‘second matter) in two separate orders dated August 31, 2016 and January 19, 2017 respectively for alleged contravention of provisions of Competition Act 2002 by the Company. The Company has filed appeals against the above orders.

The National Company Law Appellate Tribunal (NCLAT), on hearing the appeal in the first matter, upheld the decision of CCI for levying the penalty vide its order dated July 25, 2018. Post order of the NCLAT, CCI issued a revised demand notice dated August 7, 2018 of Rs 15,492 Lacs consisting of penalty of Rs 12,854 Lacs and interest of Rs 2,638 Lacs. The Company has filed appeal with Honble Supreme Court against the above order. Honble Supreme Court has stayed the NCLAT order. While the appeal of the Company is pending for hearing, the Company backed by a legal opinion, believes that it has a good case and accordingly no provision has been considered in the books of accounts.

In the second matter, demand had been stayed and the matter is pending for the hearing before NCLAT. While the appeal of the Company is pending for hearing, the Company backed by a legal opinion, believes that it has a good case and accordingly no provision 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 judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2020. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

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 4(A) of the standalone Ind AS financial statements)
As at March 31, 2020 the Company has an investment in J. K. Cement (Fujairah) FZC, a wholly owned subsidiary of Rs 59,543.34 Lacs (including share application money of Rs 2,109.88 Lacs) paid in current year against 3% noncumulative redeemable preference shares in J K Cement (Fujairah) FZC, the allotment against which is expected to be made by end of June 2020.) Our audit procedures included the following:
• Gained an understanding of the impairment assessment process and evaluated the design and tested the operating effectiveness of controls.
• Assessed the Companys valuation methodology applied in determining the recoverable amount.
• Assessed the assumptions of the cash flow forecasts including weighted average cost of capital, expected growth rates and terminal growth rates used.
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.
• 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.
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 16,151.42 Lacs. Additionally, the Company has also provided for outstanding receivable for earlier years from J.K. Cement (Fujairah) FZC amounting to Rs 1,663.58 Lacs. The total amount of Rs 17,815 Lacs has been disclosed as exceptional item.
• 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.
• Tested the arithmetical accuracy of the valuation model.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
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.
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.
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.
Claims, litigations and contingent liabilities
(as described in note 36 of the standalone Ind AS financial statements)
As of March 31, 2020, the Company has disclosed contingent liabilities of Rs 49,836.28 Lacs relating to tax and legal claims. Our audit procedures included the following:
• 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.
There are several pending legal and regulatory cases against the Company across various jurisdictions. Accordingly, management exercises its judgement in estimation of provision required in respect of such cases. The evaluation of managements 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 Companys legal and tax cases and assessed managements position through discussions with the legal head, tax head and Companys management, on both the probability of success in significant cases, and the magnitude of any potential loss.
• Obtained responses from third-party legal counsel against independent confirmations rolled out by us and conducted discussions with them regarding material cases.
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.
• Inspected external legal opinions and other evidence to corroborate managements assessment of the risk profile in respect of legal claims.
• Engaged tax specialists to assess managements 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.
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.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Key audit matters How our audit addressed the key audit matter
Revenue Recognition - Discounts, incentives, rebates etc.
(as described in note 27 of the standalone Ind AS financial statements)
For the year ended March 31, 2020 the Company has recognized revenue from operations of Rs 546,376.77 Lacs. Revenue is measured net of discounts, incentives, rebates etc. earned by customers on the Companys sales. Our audit procedures included the following:
Due to the Companys 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. • Considered Companys revenue recognition policy and its compliance in terms of Ind AS 115 Rs Revenue from contracts with customers.
• Assessed the design and tested the operating effectiveness of internal controls with regards to approvals, calculation, provision and disbursement of 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.
Therefore, there is a risk of revenue being misstated as a result of faulty estimations over discounts, incentives and rebates. • Performed analytical review and compared the managements 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.
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 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.
Estimates with respect to recognition of Minimum Alternate Tax
(as described in note 20 of the standalone Ind AS financial statements) Our audit procedures included the following:
As at March 31, 2020 deferred tax assets in respect of Rs MAT credit entitlement recognized in the standalone Ind AS financial statements is Rs 24,959.97 Lacs. • Developed an understanding of the nature of the Companys tax structure and of the key tax positions.
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. • Assessed the design and tested the operating effectiveness of internal controls related to recognition of deferred tax assets with respect to MAT credit entitlement.
• Assessed the Companys 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.
The Companys ability to recognize deferred tax assets for Rs 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. • Analyzed and tested managements 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.
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, managements decision to create deferred tax assets in respect of Rs MAT credit entitlement is determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • 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 to communicate in our report.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS 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 report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS 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 standalone Ind AS 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 Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 managements 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 Companys ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors 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 the matters 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 explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement 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 of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

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

(f) On the basis of the written representations received from the directors as on

March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2020 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(i) With respect to the other matters to be included in the Auditors 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 standalone Ind AS financial statements - Refer Note 36 A to the standalone Ind AS financial statements;

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

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

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: 17th June, 2020 UDIN No: 20086370AAAABK3954

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE UNDER SECTION Rs REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

J. K. Cement Limited (‘the Company)

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

b. All property, plant and equipmen have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for 1 case of leasehold land and 4 cases of freehold land amounting to gross block of Rs 1,353.07 Lacs (net block:

Rs 9.72 Lacs) and gross block of Rs 225.64 Lacs (net block: Rs 225.64 Lacs) respectively as at March 31, 2020 for which title deeds are in the name of the erstwhile company that merged with the Company pursuant to a scheme of amalgamation and arrangement as approved by the honorable High Court in earlier years. Also refer note 2 of the accompanying standalone Ind AS financial statements.

ii. The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2020 and no material discrepancies were noticed in respect of such confirmation.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 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 explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the investments made and guarantees provided by it. The Company has not granted any loan or provided any security to the parties covered under section 185 and 186.

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

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

vii. a. The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, duty of custom, goods and service tax, cess and other statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, duty of custom, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c. According to the records of the Company, the dues of income-tax, excise duty, wealth tax, sales-tax, value added tax, goods and service tax, cess on account 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 Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Entry Tax 2009-2010 Joint Commissioner (Appeals) 86.58
Act, 1993 Entry Tax 2008-2009, to 2011-2012 Deputy Commissioner (Appeals) 90.60
Entry Tax 2015-2016 Deputy Commissioner (Appeals) 25.96
The Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 Entry Tax 2002-2003 onwards High Court of Rajasthan 5,737.17
The Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 Entry tax 2005-2006 to 2009-2010 Supreme Court of India 314.48
Central Excise Act, 1944 Excise Duty July 1999- March 2008 Commissioner (Appeals) 1,754.84
Excise Duty July 1999- March 2008 Custom Excise and Service Tax Appellate Tribunal - Jaipur 23.97
Excise Duty 1989-1990 Supreme Court of India 419.02
Service Tax (Finance Act,1994) Service Tax June 2005 -June 2008 Custom Excise and Service Tax Appellate Tribunal - Delhi 277.44
Finance Act, 2008 (State) Environment & Health Cess 2008-2009 to 2015-2016 High Court of Karnataka, High Court of Rajasthan 3,323.44
Local Sales Tax Acts Sales Tax 1990-1991 to 2014-2015 Various courts in Uttar Pradesh, Bihar, Gujrat Rajasthan & Karnataka 454.60
Sales Tax 2012-2013 to 2014-2015 Additional Commissioner (Appeals) 363.41
Sales Tax 2014-2015 Deputy Commissioner (Appeals) 38.38
Sales Tax 2013-2014 to 2014-2015 Joint Commissioner (Appeals) 181.90
Income-tax Act, 1961 2004-2005 to 2010-2011 Allahabad High Court 4,229.82
2011-2012 to 2013-2014 Income Tax Appellate Tribunal, Lucknow 1,220.54
Income Tax 2014-2015 to 2015-2016 Commissioner of Income Tax (Appeals) - Kanpur 298.28
2018-2019 Commissioner of Income Tax (Appeals) - Kanpur 2,521.85

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

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

ix. In our opinion and according to the information and explanations given by the management, monies raised by way of term loans were applied for the purposes for which they were raised.

Further, based on the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments.

x. As more fully explained in Note 45, we have been informed by the management that during the year, the Company discovered that a senior employee was abusing his official position and had availed loans in his personal capacity from the Companys vendors over the past few years. Consequently, management has terminated the services of said employee. Based on the Companys preliminary factual investigation, interim report submitted by the external firm and managements assessment, it has been concluded that there was no financial loss incurred by the Company.

xi. According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

xii. In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

xiii. According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.

xv. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

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

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: 17th June, 2020 UDIN No:20086370AAAABK3954

ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF J. K. CEMENT LIMTED

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 J.K. Cement Limited (“the Company”) as of March 31, 2020 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Companys 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 Companies Act, 2013.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting with reference to these standalone IND AS financial statements 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 as specified under section 143(10) of the Companies Act, 2013, to the extent 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 with reference to these standalone Ind AS financial statements 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 over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 standalone Ind AS 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 internal financial controls over financial reporting with reference to these standalone Ind AS financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE STANDALONE IND AS FINANCIAL STATEMENTS

A companys internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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 companys internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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 companys assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE STANDALONE IND AS FINANCIAL STATEMENTS

Because of the inherent Limitations of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone IND AS financial statements 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, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements were operating effectively as at March 31, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
Partner
Place of Signature: Faridabad Membership Number: 086370
Date: 17th June, 2020 UDIN No:20086370AAAABK3954