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J K Cements Ltd.

BSE: 532644 Sector: Industrials
NSE: JKCEMENT ISIN Code: INE823G01014
BSE 00:00 | 24 Apr 2020 J K Cements Ltd
NSE 05:30 | 01 Jan 1970 J K Cements Ltd

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OPEN 1143.00
PREVIOUS CLOSE 1148.00
VOLUME 804
52-Week high 1504.40
52-Week low 800.00
P/E 15.38
Mkt Cap.(Rs cr) 8,464
Buy Price 1078.00
Buy Qty 1.00
Sell Price 1200.00
Sell Qty 2.00
OPEN 1143.00
CLOSE 1148.00
VOLUME 804
52-Week high 1504.40
52-Week low 800.00
P/E 15.38
Mkt Cap.(Rs cr) 8,464
Buy Price 1078.00
Buy Qty 1.00
Sell Price 1200.00
Sell Qty 2.00

J K Cements Ltd. (JKCEMENT) - Auditors Report


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Company auditors report

To the Members of J. K. Cement Limited

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone Ind AS financial statementsof J. K. Cement Limited ("the Company") which comprise the Balance sheet as atMarch 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the Company in accordance withthe ‘Code of Ethics' issued by the Institute of Chartered Accountants of Indiatogether with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to Note 36 (A) to the standalone Ind AS financialstatements wherein it has been stated that the Competition Commission of India ('CCI') hasimposed penalty of ' 12854 lacs (‘first matter') and ' 928 lacs (‘secondmatter') in two separate orders dated August 31 2016 and January 19 2017 respectivelyfor alleged contravention of provisions of Competition Act 2002 by the Company. TheCompany has filed appeals against the above orders.

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

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

Our opinion is not modified in respect of this matter. Key AuditMatters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended March 31 2019. These matters were addressed in the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.

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

Key audit matters How our audit addressed the key audit matter
Impairment 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 2019 the Company has an investment in J. K. Cement (Fujairah) FZC a wholly owned subsidiary of ' 46885.04 lacs. 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.
J. K. Cement Works (Fujairah) FZC (step down subsidiary) is incurring losses and its entire net worth is eroded. As a result an impairment assessment was required to be performed by the Company by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be recognised. • Assessed the Company's valuation methodology applied in determining the recoverable amount.
• Assessed the assumptions around the key drivers of the cash flow forecasts including estimated reserved discount rates expected growth rates and terminal growth rates used.
For the purposes of the above impairment testing value in use has been determined by forecasting and discounting future cash flows. Furthermore the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. • Discussed potential changes in key drivers 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 reasonable.
Further the determination of the recoverable amount of the investments in J. K. Cement (Fujairah) FZC involved judgments due to inherent uncertainty in the assumptions supporting the recoverable amount of these investments. • Involved specialists to assist us in auditing the valuation methodologies and sensitivity testing of key assumptions used by management in determining the recoverable value headroom.
Accordingly the impairment 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 • Tested the arithmetical accuracy of the models.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
(as described in note 36 of the standalone Ind AS financial statements)
As of March 31 2019 the Company has disclosed contingent liabilities of ' 62922.95 lacs relating to tax and legal claims. 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 management's judgements including those that involve estimations in assessing the likelihood that a pending claim will succeed or a liability will arise and the quantification of the ranges of potential financial settlement have been a matter of most significance during the current year audit. 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 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.
• Obtained the summary of Company's legal and tax cases and assessed management's position through discussions with the legal head tax head and Company's management on both the probability of success in significant cases and the magnitude of any potential loss.
• Obtained responses from relevant third party legal counsel and conducted discussions with them regarding material cases.
• Inspected external legal opinions and other evidence to corroborate management's assessment of the risk profile in respect of legal claims.
management given the complexities involved. 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 • Engaged tax specialists to assess management's application and interpretation of tax legislation affecting the Company and to consider the quantification of exposures and settlements arising from disputes with tax authorities in the various tax jurisdictions.
• Reviewed that the management assessment of similar cases is consistent across the divisions or that differences in positions taken are adequately justified.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Key audit matters How our audit addressed the key audit matter tements)
Revenue Recognition (as described in note 27 of the standalone Ind AS financial sta
For the year ended March 31 2019 the Company has recognized revenue from operations of ' 498129.88 lacs. The Company expects the revenue recognition to occur at point in time when control over the goods are transferred to the customer generally on delivery of the goods. Accordingly this requires the management to establish the fact that control over goods is transferred at the time of dispatch in accordance with Ind AS 115.The variety of terms that define when title risk and rewards are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. This area was of most significance in our audit due to the magnitude of amount of the revenue involved and high number of transactions. Revenue is also an important element of how the Company measures its performance upon which management is incentivized. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. Accordingly due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customers' it was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. Our audit procedures included the following: • Considered Company's revenue recognition policy and its compliance in terms of Ind AS 115 ‘Revenue from contracts with customers'. • Assessed the design and tested the operating effectiveness of internal controls related to revenue recognition. • Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of the samples tested we checked that the revenue has been recognized as per the shipping terms. • Selected sample of sales transactions made pre- and post-year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer confirmation of receipt of goods. • Performed monthly analytical review of revenue by streams to identify any unusual trends. • Obtained trade receivable balance confirmations as at the year end to evaluate recognition of revenue. • Assessed the relevant disclosures made within the standalone Ind AS financial statements.
Deferred Tax Assets with respect to MAT Credit Entitlement (as described in note 20 of the standalone Ind AS financial statements)
As at March 31 2019 deferred tax assets in respect of ‘MAT credit entitlement' recognized in the standalone Ind AS financial statements is ' 26359.74 lacs. 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. The Company's ability to recognize deferred tax assets for ‘MAT credit entitlement' is assessed by management at the end of each reporting period considering forecasts of future normal taxable profits and if required the Company will write down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period. The assumptions used in the projections are determined by management. Given the degree of estimation and judgement involved in projection of future taxable normal profits and the fact that if the MAT credit is not utilized within the block of 15 years (immediately succeeding the assessment year in which the credit was generated) it will lapse management's decision to create deferred tax assets in respect of ‘MAT credit entitlement' is determined to be a key audit matter in our audit of the standalone Ind AS financial statements. Our audit procedures included the following: • Developed an understanding of the nature of the Company's tax structure and of the key tax positions.
• Assessed the design and tested the operating effectiveness of internal controls related to recognition of deferred tax assets with respect to MAT credit entitlement.
• Obtained the future business plan approved by the Board of Directors and assessed the MAT credit position by inter alia agreeing key inputs to supporting documentation and by assessing the judgments made by management in this respect.
• Assessed the Company's tax planning in relation to the recovery of MAT credit assets by comparing the forecasted taxable profit with historical data and budgets approved by the board of directors.
• Analyzed and tested management's projections and corresponding assumptions used to determine the likelihood that MAT Credit recognized as on the reporting date will be recovered through future tax as per normal provisions.
• Checked the consistency of business plan with the latest management estimates prepared as a part of the budgeting process and also the reliability of the process by which the estimates were computed by assessing the reasons for differences between projected and actual performances.
• Assessed the relevant disclosures made within the standalone Ind AS financial statements.

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

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORTTHEREON

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

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

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone Ind ASfinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial 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 FINANCIALSTATEMENTS

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of then India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards)

Rules 2015 as amended. This responsibility alsse stand alone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other compre hensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted io includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

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

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

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND ASFINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

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

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

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

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern.

If we conclude that a material uncertainty exists we are required todraw attention in our auditor's report to the related disclosures in the financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone IndAS financial statements for the financial year ended March 31 2019 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen 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 theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

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

(e) On the basis of the written representations received from thedirectors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company with reference to these standalone Ind ASfinancial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year endedMarch 31 2019 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

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

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

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

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

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration

Number: 301003E/E300005

per Atul Seksaria

Partner

Membership Number: 086370

Place of Signature: Kanpur Date: 18th May 2019

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE UNDERSECTION ‘REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS'

J. K. Cement Limited (‘the Company')

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

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

c. According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company except for 1 case of leasehold land and 4cases of freehold land amounting to gross block of ' 1353.07 lacs (net block: '70.42lacs) and gross block of ' 225.64 lacs (net block: ' 225.64 lacs) respectively as at March31 2019 for which title deeds are in the name of the erstwhile company that merged withthe Company pursuant to a scheme of amalgamation and arrangement as approved by thehonorable High Court in earlier years. Also refer note 2 of the accompanying standaloneInd AS financial statements.

ii. The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat March 31 2019 and no material discrepancies were noticed in respect of suchconfirmations.

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

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

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

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

vii. a. Undisputed statutory dues including provident fund employees'state insurance income-tax duty of custom goods and service tax cess and otherstatutory dues have generally been regularly deposited with the appropriate authoritiesthough there has been a slight delay in a few cases.

b. According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax duty of custom goods and service tax cess and other statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

c. According to the records of the Company the dues of income-taxexcise duty sales-tax value added tax goods and service tax cess on account of anydispute 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 Act 1993 Entry Tax 2009-10 Joint Commissioner (Appeals)

86.58

Entry Tax 2008-09 2011-12 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 2002-03 onwards High Court of Rajasthan

5563.07

The Uttar Pradesh Tax on Entry of Goods into Entry tax Local Areas Act 2007 2005-2006 to 2009-2010 Supreme Court of India

314.48

Central Excise Act 1944 Excise Duty July 1999- March 2008 Commissioner (Appeals)

1716.94

Excise Duty July 1999- Custom Excise and Service

23.97

March 2008 Tax Appellate Tribunal - Jaipur
Excise Duty 1989-1990 Supreme Court of India

419.02

Service Tax [Finance Act 1994] Service Tax June 2007- March 2008 Commissioner - Jaipur

654.82

Service Tax June 2005 -June 2008 Custom Excise and Service Tax Appellate Tribunal - Delhi

276.44

Finance Act 2008 (State) Environment & Health Cess 2008-2009 to 2015-2016 High Court of Karnataka High Court of Rajasthan

3323.44

Local Sales Tax Acts Sales Tax 1990-1991 to 2014-2015 Various courts in Uttar Pradesh Bihar Gujrat Rajasthan & Karnataka

458.13

Sales Tax 2012-2013 to 2014- 2015 Additional Commissioner (Appeals)

363.41

Sales Tax 2014-2015 Deputy Commissioner (Appeals)

38.38

Sales Tax 2014-2015 Joint Commissioner (Appeals)

15.61

Income-tax Act 1961 Income Tax 2004-2005 to 2010-2011 Allahabad High Court

4229.82

2011-12 to 2013- 2014 Income Tax Appellate Tribunal Lucknow

1258.82

2014-2015 to 2015-2016 Commissioner of Income Tax (Appeals) Kanpur

385.80

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

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

ix. In our opinion and according to the information and explanationsgiven by the management monies raised by way of term loans were applied for the purposesfor which they were raised. Further based on the information and explanations given bythe management the Company has

not raised any money way of initial public offer / further public offer/ debt instruments.

x. Based upon the audit procedures performed for the purpose ofreporting the true and fair view of

the Standalone Ind AS financial statements and according to theinformation and explanations given by the management we report that no fraud by thecompany or no material fraud on the company by the officers and employees of the Companyhas been noticed or reported during the year.

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

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

xiii. According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the Standalone Ind AS financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given by themanagement the Company has complied with provisions of section 42 of the Companies Act2013 in respect of the preferential allotment / private placement of shares during theyear. According to the information and explanations given by the management we reportthat the amount raised have been used for the purposes for which the funds were raisedexcept for idle/surplus funds amounting to ' 44060 lacs which were not required forimmediate utilization and which have been gainfully invested in liquid investments payableon demand. The maximum amount of idle/surplus funds invested during the year was ' 44060lacs of which ' 25560 lacs was outstanding at the end of the year. The Company did notmake preferential allotment/ private placement of fully or partly convertible debenturesduring the year.

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

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

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Atul Seksaria

Partner

Membership Number: 086370

Place of Signature: Kanpur

Date: 18th May 2019

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF J. K. CEMENT LIMITED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") We haveaudited the internal financial controls over financial reporting of J. K. Cement Limited("the Company") as of March 31 2019 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

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

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone Ind AS financial statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements and their operating effectiveness.

Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

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

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

A company's internal financial control over financial reporting withreference to these standalone Ind AS financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone Ind AS financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

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

Because of the inherent Limitations of internal financial controls overfinancial reporting with reference to these financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

OPINION

In our opinion the Company has in all material respects and adequateinternal financial controls over financial reporting with reference to these standaloneInd AS financial statements and such internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements were operating effectivelyas at March 31 2019 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Co. LLP

Chartered Accountants

CAI Firm

Registration Number: 301003E/E300005

per Atul Seksaria

Partner

Membership

Number: 086370

Place of Signature: Kanpur

Date: 18th May 2019


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