kakatiya cement Auditors report

Information Other than Financial Statements (Other Information)

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Directors Report but does not include the nancial statements and our auditors report thereon. The Directors Report is expected to be made available to us after the date of this auditors report.

Our opinion on the nancial 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 nancial statements, our responsibility is to read the other information identi ed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Directors report if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with Governance.

Managements Responsibility for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134

(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these nancial statements that give a true and fair view of the nancial position, nancial performance, total comprehensive income, changes in equity and cash ows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards speci ed under section 133 of the Act. 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 implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating e ectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the nancial 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. The Board of Directors are also responsible for overseeing the Companys nancial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the nancial 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 in uence the economic decisions of users taken on the basis of these nancial 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 nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is su cient 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) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal nancial controls system in place and the operating e ectiveness 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 signi cant 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 nancial 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 nancial statements, including the disclosures, and whether the nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. Materiality is the magnitude of misstatements in the nancial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the nancial statements may be in uenced. 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 e ect of any identi ed misstatements in the nancial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi cant audit ndings, including any signi cant de ciencies 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 signi cance in the audit of the nancial statements of the year ended 31st March, 2023 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 bene ts of such communication.

Report on Other Legal and Regulatory Requirements

(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 Pro t and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid nancial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disquali ed as on 31st 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 nancial controls over nancial reporting of the Company and the operating e ectiveness of such controls, refer to our separate Report in "Annexure A". (g) In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act read with schedule V of the Act.

(h) 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, 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 nancial position in its nancial statements (Refer note 32); i

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

i. There is no delay in transferring the amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv.

(a) The Management has represented that, to the best of its knowledge and belief, 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 identi ed in any manner whatsoever by or on behalf of the Company ("Ultimate Bene ciaries") or provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries;

(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 identi ed in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Bene ciaries") or provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries;

(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.

(a) As stated in note No:38 to the nancial statements the dividend proposed in the previous year, declared and paid by the company during the year is in accordance with section 123 of the Act, as applicable.

(b) The Board of Directors of the Company have proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable. vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the company only w.e.f. April 1, 2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the nancial year ended March 31, 2023.

Annexure A to the Independent Auditors Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal Regulatory Requirements section of our report to the Members of the Company of even date)

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 nancial controls over nancial reporting of Kakatiya Cement Sugar & Industries Limited ("the Company") as of 31st March 2023 in conjunction with our audit of the nancial 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 nancial controls based on the internal control over nancial 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 (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating e ectively for ensuring the orderly and e cient conduct of its business, including adherence to 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 nancial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal nancial controls over nancial 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 ICAI and deemed to be prescribed under section 143

(10) of the Companies Act, 2013, to the extent 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 nancial controls over nancial reporting was established and maintained and if such controls operated e ectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system over nancial reporting and their operating e ectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls over nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating e ectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the Ind AS nancial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is su cient and appropriate to provide a basis for our audit opinion on the Companys internal nancial controls system over nancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal nancial control over nancial reporting is a process designed to provide reasonable assurance regarding the reliability of nancial reporting and the preparation of Ind AS nancial statements for external purposes in accordance with generally accepted accounting principles. A companys internal nancial control over nancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly re ect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditure 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 e ect on the Ind AS nancial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal nancial controls over nancial 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 nancial controls over nancial reporting to future periods are subject to the risk that the internal nancial control over nancial 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, the Company has, in all material respects, an adequate internal nancial controls system over nancial reporting and such internal nancial controls over nancial reporting were operating e ectively as at 31st March, 2023, based on the internal control over nancial 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.

Annexure B to the Independent Auditors Report

With reference to Paragraph 2 under ‘Report on Other Legal Regulatory Requirements section of our report to the Members of the Company, we report that I In respect of the Companys Property, Plant and Equipment and Intangible Assets: (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

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

(b) The xed assets have been physically veri ed by the management in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical veri cation (c) Based on our examination of registered sale deeds and other documents, the title deeds of all the immovable properties disclosed in the nancial statements are held in the name of the Company.

(d) The Company has not revalued any of its Property, Plant and Equipment (including right-of-use assets) and intangible assets during the year. (e) 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 (as amended in 2016) and rules made thereunder. ii. (a) Physical veri cation of inventory has been conducted at reasonable intervals by the management and in our opinion, the coverage, frequency and procedure of such veri cation is reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on veri cation between the physical stocks and the book records were not exceeding 10% or more in the aggregate for each class of inventory.

(b) The Company has not availed working capital facility from banks hence clause 3

(ii) of the order is not applicable. ii

i. During the year the Company has not made investments, not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, rms, Limited Liability Partnerships or any other parties and hence reporting under clause 3

(iii) of the Order is not applicable.

iv. The company has not granted any loans, secured or unsecured to companies, rms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3

(iii)

(a) to

(c) of the said Order is not applicable to the Company.

v. The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause 3

(v) of the Order is not applicable. v

i. We have broadly reviewed the cost records maintained by the Company as prescribed under sub-section

(1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. vi

i. In respect of statutory dues: a) In our opinion, the Company has generally been regular in depositing undisputed statutory dues, including Goods and Services tax, Provident Fund, Employees State Insurance, Income Tax, duty of Customs, Cess and other material statutory dues applicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Goods and Service tax, Provident Fund, Employees State Insurance, Income Tax, duty of Customs, and other statutory, Cess and other material statutory dues in arrears as at March 31, 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 records of the Company examined by us, the particulars of income tax, value added Tax, customs duty as at 31st March, 2023 which have not been deposited on account of any dispute pending, are as under:

Amount Amount Forum where Nature ( in Period to which dispute is Name of the Statute paid of dues Lakhs) the amount relates pending ( in Lakhs)

Income-Tax Act, 1961 Income Tax 123.98 Assessment Years 123.98 High Court of 1999-2000 Telangana 2000-2001 2001-2002 Income-Tax Act, 1961 Income Tax 427.94 Assessment -- High Court Year 2014-15 Telangana Income-Tax Act, 1961 Income Tax 2581.75 Assessment -- ITAT Hyderabad Year 2009-10 Income Tax Act 1961 Income Tax 152.50 Assessment -- ITAT Hyderabad Year 2011-12 Income Tax Act 1961 Income Tax 120.68 Assessment -- ITAT Hyderabad Year 2012-13 Income-Tax Act, 1961 Income Tax 969.26 Assessment -- ITAT Hyderabad Year 2016-17 Customs Act, 1962 Customs Duty 65.77 Financial Year -- Additional 2012-2013 Commissioner Customs Telangana State Electricity Duty 319.57 2003-04 to -- Honble Supreme Electricity Board 2012-13 Court of India vii

i. 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).

ix. a) The Company has not defaulted in repayment of loans or other borrowings and in the payment of interest thereon to any lender. b) The Company has not been declared wilful defaulter by any bank or nancial institution or other lender. c) According to the information and explanations given to us and procedures performed by us, we report that the Company has applied the term loans for the purpose for which the loans were obtained. d) On an overall examination of the nancial 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) The Company does not have any Subsidiaries, Associates or Joint Ventures and hence, reporting under clause 3

(ix)

(e) and

(f) of the Order is not applicable.

x. a) The Company has not raised moneys by way of initial public o er or further public o er (including debt instruments) during the year and hence reporting under clause 3

(x)

(a) of the Order is not applicable. b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally convertible) and hence reporting under clause 3

(x)

(b) of the Order is not applicable. x

i. a) In our opinion and based on our examination and enquiries with the management, no fraud by the Company and 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 Companies Act is required to be led in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report. c) As represented to us by the management, there are no whistle blower complaints received by the company during the year. xi

i. The Company is not a Nidhi Company and hence reporting under clause 3

(xii)

(a) to

(c) of the Order is not applicable. xii

i. In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the nancial statements as required by the applicable accounting standards. x

iv. We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures. x

v. In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company. xv

i. a) 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 clause 3

(xvi)

(a),

(b) and

(c) of the Order is not applicable. b) In our opinion, there is no core investment company within the Group (as de ned in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3

(xvi)

(d) of the Order is not applicable. xvi

i. The Company has incurred cash losses of 702.50 Lakhs during the nancial year covered by our audit and has not incurred cash losses in the immediately preceding nancial year. xvii

i. There has been no resignation of the statutory auditors of the Company during the year. x

ix. On the basis of the nancial ratios, ageing and expected dates of realisation of nancial assets and payment of nancial liabilities, other information accompanying the nancial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, 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. x

x.

(a) There are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund speci ed in Schedule VII to the Companies Act in compliance with second proviso to sub-section

(5) of Section 135 of the said Act. Accordingly, reporting under clause 3

(xx)

(a) of the Order is not applicable to the Company for the year.

(b) In respect of ongoing projects, there are no amounts required to be transferred to unspent Corporate Social Responsibility (CSR) account as at the end of the previous nancial year and for the current nancial year. Accordingly, reporting under clause 3

(xx)

(b) of the Order is not applicable to the Company.