Mar 31, 2023
To the Members of J.K. Cement Limited
Report on the Audit of the Standalone Ind AS Financial StatementsOpinion
We have audited the accompanying standalone Ind AS financial statement of J.K. Cement Limited ("the Company"), which comprise the Balance sheet as at March 31 2023, 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 31,2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
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 ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code 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 CCI Case (''EOM'')
We draw attention to Note 36A to the standalone Ind AS financial statements wherein it has been stated that the Competition Commission of India (''CCI'') has imposed penalty of H12,854 lacs (''first matter'') and H928 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 H15,492 lacs consisting of penalty of H12,854 lacs and interest of H2,638 lacs. The Company has filed appeal with Hon''ble Supreme Court against the above order. Hon''ble 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, 2023. 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 Auditor''s 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 |
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Impairment assessment of Investments in J.K. Cement (Fujairah) FZC, a wholly owned subsidiary (as described in note 4A and 45 of the standalone Ind AS financial statements) |
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As at March 31,2023 the Company has an investment in J. K. Cement Our audit procedures included the following: |
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(Fujairah) FZC, a wholly owned subsidiary of H1,09,615.21 lacs. ⢠|
Gained an understanding of the impairment assessment |
J. K. Cement Works (Fujairah) FZC (step down subsidiary) is incurring |
process and evaluated the design and tested the operating |
losses and its entire net worth is eroded. As a result, an impairment |
effectiveness of controls. |
assessment was required to be performed by the Company by ⢠|
Assessed the Company''s valuation methodology applied in |
comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be |
determining the recoverable amount. |
recognised. ⢠|
Assessed the assumptions of the cash flow forecasts including weighted average cost of capital, expected growth |
During the current year, based on business valuation of J.K. Cement Works (Fujairah) FZC by an independent external valuer, no provision |
rates and terminal growth rates used. |
has recognized by the Company considering recoverable amount of ⢠|
Discussed potential changes inputs as compared to |
these investments exceeds its carrying amount. The Total amount of |
previous year / actual performance with management in |
provision for diminution in value of investment amounts to H45,837.92 |
order to evaluate whether the inputs and assumptions used |
lacs as at March 31,2023. |
in the cash flow forecasts were appropriate. |
For the purposes of the above impairment testing, value in use has ⢠|
Involved specialists to assist us in evaluating the valuation |
been determined by forecasting and discounting future cash flows. |
methodologies and sensitivity testing of key assumptions |
Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. |
used by management in determining the recoverable value headroom. |
Further, the determination of the recoverable amount of the ⢠|
Tested the arithmetical accuracy of the valuation model. |
investments in J. K. Cement (Fujairah) FZC involved judgments due to ⢠|
Assessed the relevant disclosures made within the |
inherent uncertainty in the assumptions supporting the recoverable amount of these investments. |
standalone Ind AS financial statements. |
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. |
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Claims, litigations and contingent liabilities (as described in note 36A of the standalone Ind AS financial statements) |
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As of March 31,2023, the Company has disclosed contingent liabilities Our audit procedures included the following: |
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of H26,112.48 lacs (excluding amount of H13,782 lacs and interest of ⢠|
Gained an understanding of the process of identification of |
H2,638 lacs related to CCI case covered in EOM para above) relating to |
claims, litigations and contingent liabilities, and evaluated |
tax and legal claims. |
the design and tested the operating effectiveness of key |
There are several pending legal and regulatory cases against the |
controls. |
Company across various jurisdictions. Accordingly, management ⢠|
Obtained the summary of Company''s legal and tax cases |
exercises its judgement in estimation of provision required in respect |
and assessed management''s position through discussions |
of such cases. The evaluation of management''s judgements, including |
with the legal head, tax head and Company''s management, |
those that involve estimations in assessing the likelihood that a |
on both the probability of success in significant cases, and |
pending claim will succeed, or a liability will arise, and the quantification of the ranges of potential financial settlement have been a matter of |
the magnitude of any potential loss. |
most significance during the current year audit. ⢠|
Obtained responses from third-party legal counsel against independent confirmation rolled out by us and conducted |
Furthermore, the Company has operations across many jurisdictions and is subject to taxation related litigations as per local tax regulations. |
discussion with them regarding material cases. |
Evaluation of the outcome of the taxation related matters, and whether ⢠|
Inspected external legal opinions and other evidence to |
the risk of loss is remote, possible or probable, requires judgement by |
corroborate management''s assessment of the risk profile in |
management given the complexities involved. |
respect of legal claims. |
Accordingly, due to large number of claims and complexity/judgement ⢠|
Engaged tax specialists to assess management''s |
involved in outcome of these litigations. Claims, litigations and |
application and interpretation of tax legislation affecting the |
contingent liabilities was determined to be a key audit matter in our |
Company, and to consider the quantification of exposures |
audit of the standalone Ind AS financial statements |
and settlements arising from disputes with tax authorities in the various tax jurisdictions. |
⢠|
Assessed the relevant disclosures made within the standalone Ind AS financial statements. |
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) |
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For the year ended March 31,2023 the Company has recognized revenue from sale of goods of H8,77,678.06 lacs. Revenue is measured net of discounts, incentives, rebates etc. earned by customers on the Company''s sales. Due to the Company''s presence across different marketing regions within the country and the competitive business environment, the estimation of the various types of discounts, incentives and rebate schemes to be recognised based on sales made during the year is material and considered to be complex and judgmental and dependent on various performance obligations and market conditions. Therefore, there is a risk of revenue being misstated as a result of faulty estimations over discounts, incentives and rebates. 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. |
Our audit procedures included the following: ⢠Considered Company''s revenue recognition policy and its compliance in terms of Ind AS 115 âRevenue 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. ⢠Performed analytical review and compared the management''s assessment of discounts, incentives and rebates recorded for the current year with historical trends of discount given and reversal of such discounts, incentives and rebates to assess the adequacy of provisions made during the current year. ⢠Performed sample test of manual journals posted to discounts, incentives and rebates to identify unusual or irregular items. ⢠Assessed the relevant disclosures made within the standalone Ind AS financial statements. |
The Company''s 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 auditor''s report thereon.
Our opinion on the standalone 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 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 Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these 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 Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless 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 Company''s financial reporting process.
Auditor''s 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the 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, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure 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 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,
2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 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, 2023 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36A 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
iv. a) The management has represented
that, to the best of its knowledge and belief no funds 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other person(s) or entity(ies) identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether
Mar 31, 2022
Report on the Audit of the Standalone Ind AS
Opinion
We have audited the accompanying standalone Ind AS financial statements of J. K. Cement Limited ("the Company"), which comprise the Balance sheet as at March 31 2022, 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, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
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 ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code 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.
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 ''15,492 lacs consisting of penalty of ''12,854 lacs and interest of ''2,638 lacs. The Company has filed appeal with Hon''ble Supreme Court against the above order. Hon''ble 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, 2022. 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 Auditor''s 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.
Emphasis of Matter on CCI Case
We draw attention to Note 36A to the standalone Ind AS financial statements wherein it has been stated that the Competition Commission of India (''CCI'') has imposed penalty of ''12,854 lacs (''first matter'') and ''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.
Key audit matters |
How our audit addressed the key audit matter |
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Impairment assessment of Investments in J. K. Cement (Fujairah) FZC, a wholly owned subsidiary (a) (as described in note 4A, 4B & 5 of the standalone Ind AS financial statements) |
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As at March 31,2022 the Company has an investment in J. K. Cement (Fujairah) FZC, a wholly owned subsidiary of ''99,288.30 lacs (including share application money of ''2,471.55 lacs paid in current year against 3% non-cumulative redeemable preference shares in J. K. Cement (Fujairah) FZC, the allotment which is expected to be made by end of June 2022). 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. 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 ''13,000 lacs (Previous year ''16,686.50 lacs). The Total amount of ''13,000 lacs (Previous year ''16,686.50 lacs) has been disclosed as exceptional item. |
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 Company''s 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. ⢠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. ⢠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. |
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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. |
Assessed the relevant disclosures made within the standalone Ind AS financial statements. |
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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. |
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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. |
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Claims, litigations and contingent liabilities (as described in note 36A of the standalone Ind AS financial statements) |
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As of March 31,2022, the Company has disclosed contingent liabilities of ''31,401.56 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 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 financial statements |
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 third-party legal counsel against independent confirmation rolled out by us and conducted discussion 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. ⢠Engaged tax specialists to assess management''s application and interpretation of tax legislation affecting the Company, and to consider the quantification of exposures and settlements arising from disputes with tax authorities in the various tax jurisdictions. ⢠Assessed the relevant disclosures made within the standalone Ind AS financial statements. |
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) |
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For the year ended March 31,2022 the Company has recognized |
Our audit procedures included the following: |
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revenue from operations of ''752,905.28 lacs. |
⢠|
Considered Company''s revenue recognition policy and its |
Revenue is measured net of discounts, incentives, rebates etc. |
compliance in terms of Ind AS 115 âRevenue from contracts with |
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earned by customers on the Company''s sales. |
customers''. |
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Due to the Company''s presence across different marketing regions |
⢠|
Assessed the design and tested the operating effectiveness of |
within the country and the competitive business environment, |
internal controls with regards to approvals, calculation, provision |
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the estimation of the various types of discounts, incentives and rebate schemes to be recognised based on sales made during |
and disbursement of discounts, incentives and rebates. |
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the year is material and considered to be complex and judgmental |
⢠|
Performed sample test of supporting documentation for computation of discounts, incentives and rebates recorded and/ |
and dependent on various performance obligations and market |
or disbursed during the year including credit notes issued after |
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Therefore, there is a risk of revenue being misstated as a result of |
the year end date. |
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faulty estimations over discounts, incentives and rebates. |
⢠|
Performed analytical review and compared the management''s |
assessment of discounts, incentives and rebates recorded for the |
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Accordingly, given the complexity and judgement involved in the |
current year with historical trends of discount given and reversal |
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assessment of provisions required for discounts, incentives and |
of such discounts, incentives and rebates to assess the adequacy |
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rebates, Revenue recognition - Discounts, incentives, rebates |
of provisions made during the current year. |
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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. |
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⢠|
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 Auditor''s Report Thereon
The Company''s 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 auditor''s 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 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 Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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, implementatio and maintenance of adequate internal financial controls that were operating effectively for ensuring the accurac 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 t< fraud or error.
In preparing the standalone Ind AS financial statements management is responsible for assessing the Company 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 Company''s financial reporting process.
Auditor''s 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.
If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the 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, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 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;
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures that were 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 (a) and (b) contain any material misstatement.
(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 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, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 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 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, 2022 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our
opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36A 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.
iv. a) The management has represented
that, to the best of its knowledge and belief, no funds 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether,
v. The dividend paid during the year by the Company is in compliance with section 123 of the Act.
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Place of Signature: New Delhi Membership Number: 086370 Date: 21 May 2022 UDIN: 22086370AJJBBC5999
Mar 31, 2021
Report on the Audit of the Standalone Ind AS
Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of J.K. Cement Limited ("the Company"), which comprise the Balance sheet as at 31 March 2021, 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 31 March 2021, 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 ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code 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 45 to the standalone Ind AS financial statements, which describes the management''s assessment of the impact of uncertainties related to outbreak of COVID-19 on the future business operations of the Company.
Our opinion is not modified in respect of this matter.
Emphasis of Matter on CCI Case
We draw attention to Note 36 (A) to the standalone Ind AS financial statements wherein it has been stated that the Competition Commission of India ('' CCI'') has imposed penalty of '' 12,854 lacs (''first matter'') and '' 928 lacs (''second matter'') in two separate orders dated 31 August 2016 and 19 January 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, uphelc the decision of CCI for levying the penalty vide its order dated 25 July 2018. Post order of the NCLAT, CCI issued a revised demand notice dated 7 August 2018 of '' 15,492 lacs consisting of penalty of '' 12,854 lacs and interest of '' 2,638 lacs. The Company has filed appeal with Hon''ble Supreme Court against the above order. Hon''ble 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 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 31 March 2021. 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 Auditor''s 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 4A, 4B & 5 of the standalone ind AS financial statements) |
|
As at 31 March 2021 the Company has an investment in J.K. |
Our audit procedures included the following: |
Cement (Fujairah) FZC, a wholly owned subsidiary of '' 69,237.51 |
⢠Gained an understanding of the impairment assessment |
lacs (including share application money of '' 2180.05 lacs) paid in |
process and evaluated the design and tested the |
current year against 3% non-cumulative redeemable preference shares in J.K. Cement (Fujairah) FZC, the allotment which is |
operating effectiveness of controls. |
expected to be made by end of June 2021. J.K. Cement Works (Fujairah) FZC (step down subsidiary) is |
⢠Assessed the Company''s valuation methodology applied in determining the recoverable amount. |
incurring losses and its entire net worth is eroded. As a result, |
⢠Assessed the assumptions of the cash flow forecasts |
an impairment assessment was required to be performed by the |
including weighted average cost of capital, expected |
Company by comparing the carrying value of these investments to |
growth rates and terminal growth rates used. |
their recoverable amount to determine whether an impairment was |
⢠Discussed potential changes inputs as compared to |
required to be recognised. |
previous year / actual performance with management in |
Accordingly, during the current year, based on business valuation |
order to evaluate whether the inputs and assumptions |
of J.K. Cement Works (Fujairah) FZC" by an independent external |
used in the cash flow forecasts were appropriate. |
valuer, the Company has recognized provision towards diminution |
⢠Involved specialists to assist us in evaluating the |
of carrying amount of investment J.K. Cement (Fujairah) FZC of |
valuation methodologies and sensitivity testing of key |
'' 16,686.50 lacs (Previous Year '' 16,151.42 lacs). The Total amount |
assumptions used by management in determining the |
of '' 16,686.50 lacs (Previous Year '' 16,151.42 lacs) has been disclosed as exceptional item. |
recoverable value headroom. ⢠Tested the arithmetical accuracy of the valuation model. |
For the purposes of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows. |
⢠Assessed the relevant disclosures made within the |
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. |
standalone Ind AS financial statements. |
Claims, litigations and contingent liabilities (as described in note 36A of the standalone Ind AS financial statements) |
|
As of 31 March 2021, the Company has disclosed contingent |
Our audit procedures included the following: |
liabilities of '' 20,635.15 lacs relating to tax and legal claims. |
⢠Gained an understanding of the process of identification |
There are several pending legal and regulatory cases against the |
of claims, litigations and contingent liabilities, and |
Company across various jurisdictions. Accordingly, management |
evaluated the design and tested the operating |
exercises its judgement in estimation of provision required |
effectiveness of key controls. |
in respect of such cases. The evaluation of management''s |
⢠Obtained the summary of Company''s legal and tax cases |
judgements, including those that involve estimations in assessing |
and assessed management''s position through discussions |
the likelihood that a pending claim will succeed, or a liability will |
with the legal head, tax head and Company''s management, |
arise, and the quantification of the ranges of potential financial |
on both the probability of success in significant cases, and |
settlement have been a matter of most significance during the |
the magnitude of any potential loss. |
current year audit. |
⢠Obtained responses from third-party legal counsel against independent confirmation rolled out by us and conducted |
Furthermore, the Company has operations across many jurisdictions and is subject to taxation related litigations as per |
discussion with them regarding material cases. |
local tax regulations. Evaluation of the outcome of the taxation |
⢠Inspected external legal opinions and other evidence |
related matters, and whether the risk of loss is remote, possible |
to corroborate management''s assessment of the risk |
or probable, requires judgement by management given the |
profile in respect of legal claims. |
complexities involved. |
⢠Engaged tax specialists to assess management''s |
Accordingly, due to large number of claims and complexity/ |
application and interpretation of tax legislation affecting the Company, and to consider the quantification of |
judgement involved in outcome of these litigations. Claims, |
exposures and settlements arising from disputes with tax |
litigations and contingent liabilities was determined to be a key audit matter in our audit of the standalone Ind AS financial statements |
authorities in the various tax jurisdictions. ⢠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 31 March 2021 the Company has recognized revenue from operations of '' 623,341.79 lacs. |
Our audit procedures included the following: |
|
⢠|
Considered Company''s revenue recognition policy and |
|
Revenue is measured net of discounts, incentives, rebates etc. |
its compliance in terms of Ind AS 115 ''Revenue from |
|
earned by customers on the Company''s sales. |
contracts with customers''. |
|
Due to the Company''s presence across different marketing regions |
⢠|
Assessed the design and tested the operating |
within the country and the competitive business environment, the estimation of the various types of discounts, incentives and |
effectiveness of internal controls with regards to |
|
rebate schemes to be recognised based on sales made during |
approvals, calculation, provision and disbursement of |
|
the year is material and considered to be complex and judgmental |
discounts, incentives and rebates. |
|
and dependent on various performance obligations and market |
⢠|
Performed sample test of supporting documentation |
conditions. |
for computation of discounts, incentives and rebates |
|
Therefore, there is a risk of revenue being misstated as a result of |
recorded and/or disbursed during the year including |
|
faulty estimations over discounts, incentives and rebates. |
credit notes issued after the year end date. |
|
Accordingly, given the complexity and judgement involved in the |
⢠|
Performed analytical review and compared the |
assessment of provisions required for discounts, incentives and |
management''s assessment of discounts, incentives |
|
rebates, Revenue recognition - Discounts, incentives, rebates etc. was determined to be a key audit matter in our audit of the |
and rebates recorded for the current year with historical |
|
Standalone Ind AS financial statements. |
trends of discount given and reversal of such discounts, incentives and rebates to assess the adequacy of provisions made during the current year. |
|
⢠|
Performed sample test of manual journals posted to discounts, incentives and rebates to identify unusual or irregular items. |
|
⢠|
Assessed the relevant disclosures made within the standalone Ind AS financial statements. |
Estimate with respect to recognition of Minimum Alternate Tax (as described in note 20 of the standalone Ind AS financial statements) |
|
As at 31 March 2021 deferred tax assets in respect of ''MAT ⢠|
Our audit procedures included the following: |
credit entitlement'' recognized in the standalone Ind AS financial . statements is '' 13,462.96 lacs. |
Developed an understanding of the nature of the Company''s 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 |
Assessed the design and tested the operating effectiveness |
tax during the specified period, i.e. the period for which MAT credit |
of internal controls related to recognition of deferred tax |
is allowed to be carried forward. |
assets with respect to MAT credit entitlement. |
The Company''s ability to recognize deferred tax assets for ''MAT â |
Assessed the Company''s tax planning in relation to the |
credit entitlement'' is assessed by management at the end of each |
recovery of MAT credit assets by comparing the forecasted |
reporting period, considering forecasts of future normal taxable |
taxable profit with historical data and budgets approved by |
profits and if required the Company will write down the asset to the |
the board of directors. |
extent that it is no longer probable that it will pay normal tax during the specified period. The assumptions used in the projections are |
Analyzed and tested management''s projections and |
determined by management. |
corresponding assumptions used to determine the likelihood that MAT Credit recognized as on the reporting |
Given the degree of estimation and judgement involved in projection of future taxable normal profits and the fact that if the |
date will be recovered through future tax as per normal |
MAT credit is not utilized within the block of 15 years (immediately |
provisions. |
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. |
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. |
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor''s 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 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 Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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 Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless 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 Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the 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 31 March 2021 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
(h) In our opinion, the managerial remuneration for the year ended 31 March 2021 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best
of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36 A to the standalone Ind AS financial statements;
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 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 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 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 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 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 with reference to standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
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
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Place of Signature: Faridabad Membership Number: 086370 Date: 12 June 2021 UDIN: 21086370AAAABH9151
Mar 31, 2019
INDEPENDENT AUDITORâS 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 statements of J. K. Cement Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2019, 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 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 (âthe Actâ) 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, 2019, 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 âAuditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ 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 there under, 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
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 (âfirst matterâ) and Rs,928 lacs (âsecond matterâ) 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 Honâble Supreme Court against the above order. Honâble 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, 2019. 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 Auditorâs 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.
As at March 31, 2019 the Company has an investment in J. K. Cement (Fujairah) FZC, a wholly owned subsidiary of Rs,46,885.04 lacs.
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) |
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 recognized.
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 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.
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 Companyâs 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.
- 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.
- 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.
- Tested the arithmetical accuracy of the models.
- Assessed the relevant disclosures made within 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, 2019, the Company has disclosed contingent Our audit procedures included the following: liabilities of Rs,62,922.95 lacs relating to tax and legal claims. - Gained an understanding of the process of identification of claims, litigations and contingent liabilities, and evaluated the There are several pending legal and regulatory cases against , a i r b b b design and tested the operating effectiveness of key controls. the Company across various jurisdictions. Accordingly, management exercises its judgement in estimation of - Obtained the summary of Companyâs legal and tax cases and provision required in respect of such cases. The evaluation assessed managementâs position through discussions with of managementâs judgments, including those that involve the legal head, tax head and Companyâs management, on estimations in assessing the likelihood that a pending claim both the probability of success in significant cases, and the will succeed, or a liability will arise, and the quantification magnitude of any potential loss. of the ranges of potential financial settlement have been a matter of most significance during the current year audit. - Obtained responses from relevant third party legal counsel and conducted discussions with them regarding material Furthermore, the Company has operations across many cases. jurisdictions and is subject to taxation related litigations as per local tax regulations. Evaluation of the outcome of - Inspected external legal opinions and other evidence to the taxation related matters, and whether the risk of loss corroborate managementâs assessment of the risk profile in is remote, possible or probable, requires judgment by respect of legal claims. management given the complexities involved. - Engaged tax specialists to assess managementâs application Accordingly, due to large number of claims and complexity/ and interpretation of tax legislation affecting the Company, judgment involved in outcome of these litigations. ^^in^ and to consider the quantification of exposures and litigations and contingent liabilities was defined to be settlements arising from disputes with tax authorities in the a key audit matter in our audit of the standalone Ind AS various tax jurisdictions financial statements. - 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 |
Revenue Recognition (as described in note 27 of the standalone Ind AS financial statements) |
|
For the year ended March 31, 2019 the Company has |
Our audit procedures included the following: |
recognized revenue from operations of Rs,498,129.88 lacs. |
- Considered Companyâs revenue recognition policy and its |
The Company expects the revenue recognition to occur at point in time when control over the goods are transferred to |
compliance in terms of Ind AS 115 âRevenue from contracts |
with customersâ. |
|
the customer, generally on delivery of the goods. Accordingly, |
- Assessed the design and tested the operating effectiveness of |
this requires the management to establish the fact that |
internal controls related to revenue recognition. |
control over goods is transferred at the time of dispatch in accordance with Ind AS 115.The variety of terms that define |
- Performed sample tests of individual sales transaction and traced |
when title, risk and rewards are transferred to the customer, |
to sales invoices, sales orders and other related documents. |
as well as the high value of the transactions, give rise to the |
Further, in respect of the samples tested we checked that the |
risk that revenue is not recognized in the correct period. |
revenue has been recognized as per the shipping terms. |
This area was of most significance in our audit due to the |
- Selected sample of sales transactions made pre- and |
magnitude of amount of the revenue involved and high |
post-year end, agreeing the period of revenue recognition to |
number of transactions. |
third party support, such as transporter invoice and customer |
Revenue is also an important element of how the Company |
confirmation of receipt of goods. |
measures its performance, upon which management is |
- Performed monthly analytical review of revenue by streams |
incentivized. The Company focuses on revenue as a key |
to identify any unusual trends. |
performance measure, which could create an incentive for revenue to be recognized before the risk and rewards have |
- Obtained trade receivable balance confirmations as at the |
been transferred. |
year end to evaluate recognition of revenue. |
Accordingly, due to the significant risk associated with |
- Assessed the relevant disclosures made within the |
revenue recognition in accordance with terms of Ind AS 115 |
standalone Ind AS financial statements. |
âRevenue from contracts with customersâ, it was determined to be a key audit matter in our audit of 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 âMAT |
Our audit procedures included the following: |
credit entitlementâ recognized in the standalone Ind AS |
- Developed an understanding of the nature of the Companyâs |
financial statements is Rs,26,359.74 lacs. |
tax structure and of the key tax positions. |
Deferred tax assets are recognized for MAT credit available |
- Assessed the design and tested the operating effectiveness of |
to the extent that it is probable that the Company will pay |
internal controls related to recognition of deferred tax assets |
normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. |
with respect to MAT credit entitlement. - Obtained the future business plan approved by the Board |
The Companyâs ability to recognize deferred tax assets for |
of Directors and assessed the MAT credit position by inter |
âMAT credit entitlementâ is assessed by management at the |
alia agreeing key inputs to supporting documentation and by |
end of each reporting period, considering forecasts of future normal taxable profits and if required the Company will write |
assessing the judgments made by management in this respect. |
down the asset to the extent that it is no longer probable |
- Assessed the Companyâs tax planning in relation to the recovery of |
that it will pay normal tax during the specified period. The |
MAT credit assets by comparing the forecasted taxable profit with |
assumptions used in the projections are determined by management. |
historical data and budgets approved by the board of directors. - Analyzed and tested managementâs projections and |
Given the degree of estimation and judgment involved in |
corresponding assumptions used to determine the likelihood |
projection of future taxable normal profits and the fact that |
that MAT Credit recognized as on the reporting date will be |
if the MAT credit is not utilized within the block of 15 years (immediately succeeding the assessment year in which the |
recovered through future tax as per normal provisions. |
credit was generated) it will lapse, managementâs decision |
- Checked the consistency of business plan with the latest |
to create deferred tax assets in respect of âMAT credit |
management estimates prepared as a part of the budgeting |
entitlementâ is determined to be a key audit matter in our |
process and also the reliability of the process by which the |
audit of the standalone Ind AS financial statements. |
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. |
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORâS REPORT THEREON
The Companyâs 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 auditorâs 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 the 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 Companyâs 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 Companyâs 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 Companyâs financial reporting process.
AUDITORâS 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 auditorâs 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 system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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, 2019 and are therefore the key audit matters. We describe these matters in our auditorâs 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 (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls 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 âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 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;
(h) With respect to the other matters to be included in the Auditorâs 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.
J. K. Cement Limited (âthe Companyâ)
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 equipment 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,70.42 lacs) and gross block of Rs,225.64 lacs (net block: Rs,225.64 lacs) respectively as at March 31, 2019 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, 2019 and no material discrepancies were noticed in respect of such confirmations.
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. Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, duty of custom, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ 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, sales-tax, value added tax, goods and service tax, cess on account of any dispute, are as follows:
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.
Name of the Statute |
Nature of Dues |
Period to which |
Forum where |
Amount |
Amount relates |
dispute is pending |
(Rs, in lacs) |
||
The Bihar Tax on Entry of Goods into Local |
Entry Tax |
2009-10 |
Joint |
86.58 |
Areas for Consumption, Use or Sale Therein |
Commissioner (Appeals) |
|||
Act, 1993 |
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 |
Entry Tax |
2002-03 |
High Court of Rajasthan |
5,563.07 |
Local Areas Act, 1999 |
onwards |
|||
The Uttar Pradesh Tax on Entry of Goods into Entry tax |
2005-2006 |
Supreme Court of India |
314.48 |
|
Local Areas Act, 2007 |
to 2009-2010 |
|||
Central Excise Act, 1944 |
Excise Duty |
July 1999-March 2008 |
Commissioner (Appeals) |
1,716.94 |
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 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 |
2008-2009 |
High Court of Karnataka, |
3,323.44 |
& Health Cess |
to 2015-2016 |
High Court of Rajasthan |
||
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 |
4,229.82 |
2011-12 |
Income Tax Appellate |
1,258.82 |
||
to 2013- 2014 |
Tribunal, Lucknow |
|||
2014-2015 |
Commissioner of Income |
385.80 |
||
to 2015-2016 |
Tax (Appeals) Kanpur |
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. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no material fraud on the company by the officers and employees of the Company has been noticed or reported during the year.
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 Standalone Ind AS financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given by the management the Company has complied with provisions of section 42 of the Companies Act, 2013 in respect of the preferential allotment / private placement of shares during the year. According to the information and explanations given by the management, we report that the amount raised, have been used for the purposes for which the funds were raised except for idle/surplus funds amounting to Rs,44,060 lacs which were not required for immediate utilization and which have been gainfully invested in liquid investments payable on demand. The maximum amount of idle/surplus funds invested during the year was Rs,44,060 lacs of which Rs,25,560 lacs was outstanding at the end of the year. The Company did not make preferential allotment/ private placement of fully or partly convertible debentures during the year.
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.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of J. K. Cement Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs 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 Companyâs 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.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting with reference to these 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 âGuidance Noteâ) 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 companyâs 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 companyâs 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs 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 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, and 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, 2019, 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
Place of Signature: Kanpur Partner
Date: 18th May, 2019 Membership Number: 086370
Mar 31, 2017
INDEPENDENT AUDITORâS REPORT
To The Members of J.K.CEMENT LIMITED
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of J.K. Cement Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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) prescribed 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 the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
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.
OPINION
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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
EMPHASIS OF MATTER
We draw attention to Note No 36 (A)(6)of the statement which describes the following matters:
(a) In terms of order dated 31st August 2016, the Competition Commission of India (âCCIâ ) has imposed penalty of Rs, 128.54 crore for alleged contravention of the provisions of the Competition Act, 2002 by the Company. The Company had filed an appeal against CCI Order before the Competition Appellate Tribunal (âCOMPATâ). COMPAT has granted stay on the CCI Order on the condition that the Company deposits penalty amounting to Rs, 6.56 crore which has since been deposited. Based on a legal opinion and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.
(b) In terms of order dated 19th January 2017, the CCI has
imposed penalty of Rs, 9.28 crore pursuant to a reference filed by the Government of Haryana for alleged contravention of the provisions of the Competition Act, 2002 in August 2012 by the Company. The Company has filed an appeal before COMPAT. The Company believes it has a good case and considering the uncertainty relating to the outcome of this matter, no provision has been made. Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1- As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms
of Section 143(11) of the Act, we give in âAnnexure Aâ 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, 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 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, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being
appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs 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 financial position in its standalone Ind AS financial statements; (Refer Note No.36)
II. The company does 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.
IV. The company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016.Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the company and as produced to us by the management (Refer Note No10 (iv)).
The Annexure referred to in our Independent Auditorâs Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2017, We report that:
i. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars, including Quantitative details and situation of fixed assets other than furniture and fixtures and office equipments.
(b) All the assets 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 to us and the records examined by us and based on the examination of registered sale deed /transfer deed/ conveyance deed and other relevant records evidencing title provided to us, we report that, the title deeds, comprising all the immovable properties of land and building are held in the name of the company as at the balance sheet date, except the following:
Gross Block |
Net Block |
||
Particular of land |
as at 31-03-2017 ('' In lacs) |
as at 31-03-2017 ('' In lacs) |
Remarks |
i. Leasehold |
1353.07 |
306.36 |
The title deeds |
land (one |
are in the name |
||
case) |
of erstwhile |
||
ii. Freehold |
225.64 |
225.64 |
company that |
land (Four |
merged with |
||
cases ) |
the company pursuant to a scheme of amalgamation and arrangement as approved by the honorable High Court. |
ii. In respect of its Inventories:
As explained to us, inventories have been physically verified during the year by the management at reasonable intervals and discrepancies noticed on verification between physical stocks and the book records were not material.
iii. In respect of loans, secured or unsecured, granted by the Company to Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013, according to the information and explanations given to us :
(a) The Company had granted Unsecured Loans to one company the terms and conditions of loans are not prima-facie prejudicial to the interest of the company. The company had repaid the loan during the year therefore other clauses are not applicable.
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 Act, with respect to the loans and investment made.
v. In our opinion and according to information and explanations given to us, the company has not accepted any deposits within the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, therefore, the provisions of paragraph 3(v) of the Companies (Auditorâs Report ) order, 2016, are not applicable to the company.
vi. We have broadly reviewed the books of account maintained by the company, pursuant to the rules made by the Central Government, for maintenance of cost records under sub section (1) of section 148 of the Companies Act,2013 and we are of the opinion that prima-facie the prescribed accounts and records have been maintained.
vii. According to the information and explanations given to us, in respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and any other statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other material Statutory dues were in arrear as at 31st March, 2017 for a period more than six months from the date they became payable.
viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to banks, government or dues to debenture holder.
(b) According to the records of the company, income tax, sales tax, service tax, duty of custom, duty of excise or value added tax which have not been deposited on account of any dispute, are as follows
Name of the Statute |
Nature of the Dues |
Amount (Rs, in Lacs) |
Period to which Amount Relates |
Forum where Dispute is Pending |
Finance Act 2008 (State) |
Environment and Health Cess |
3239.34 |
2008-09 to 2015-16 |
Jodhpur High Court and Bangalore High Court |
State Sales Tax Act |
Sales Tax |
887.72 |
1991-92 onwards |
Various Court in Uttar Pradesh and Rajasthan |
Rajasthan Entry Tax |
Entry Tax |
2392.49 |
July, 2006 Onwards |
Appeal with Jodhpur High Court |
Rajasthan Entry Tax |
Interest on Entry Tax |
2737.76 |
2002-03 Onwards |
Appeal with Jodhpur High Court |
Uttar Pradesh Entry Tax |
Interest on Entry Tax |
314.47 |
2008-09 and 2009-10 |
Appeal with Supreme Court |
Central Excise Act,1944 |
Excise Duty including Interest thereon |
419.02 |
1989 |
Supreme Court |
Finance Act, 1994 |
Service Tax |
1085.42 |
June, 2007 to March, 2008 |
Central Excise Department |
Central Excise Act,1944 |
Excise Duty including Interest |
1662.53 |
July, 1999 to March, 2008 |
Central Excise Department |
Service Tax |
Service Tax on GTA |
228.89 |
- |
Central Excise Department |
ix. In our opinion and according to the information and explanations given to us, the debentures and term loans have been applied for the purposes for which they were obtained.
x. According to the information and explanations give to us, no material fraud by the company or on the company by its officer or employees has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the company is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the Companies (Auditorâs Report ) order, 2016,are not applicable to the company.
xiii. According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into non- cash transactions with directors or persons connected with him, Therefore the provisions of paragraph 3 (xv) of the Companies (Auditorâs Report ) order, 2016, are not applicable to the company.
xvi. The company is not required to be registered under section 45 - IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of J.K. CEMENT LIMITED (âthe Companyâ) as of 31st March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs 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 (âICAIâ). 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 companyâs 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.
AUDITORSâ RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) 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 applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the companyâs assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2017, 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 P.L. TANDON & Co.
Chartered Accountants
Registration Number: 000186C
P.P.SINGH
Place; KANPUR (PARTNER)
Date : 13th May, 2017 Membership Number: 072754
Mar 31, 2014
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of J.K. Cement
Limited ("the Company"), which comprise the Balance Sheet as at March 3
1, 2014, the Statement of Profit and Loss and Cash Flow Statement for
the year then ended, and a summary of significant accounting policies
and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FORTHE FINANCIAL STATEMENTS
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13th September
2013 of the Ministry of Corporate Affairs in respect of section I 33
of the Companies Act, 201 3.This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 3 1, 2014;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
EMPHASIS OF MATTER
Without qualifying our opinion, we draw attention to Note No. 36.1 (A)
(IV) of the financial statements relating to the order of the
Competition Commission of India (CO), concerning alleged contravention
of the provisions of the Competition Act, 2002 and imposing a penalty
of Rs. 12854 lacs on the company The company is advised that it has a
good case before Competition Appellate Tribunal and accordingly no
provision has been considered necessary by the company in this regard.
REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order; 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with the General Circular I
5/2013 dated 13th September 2013 of Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013
e. On the basis of written representations received from the directors
as on March 3 1, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 3 1, 2014, from being
appointed as a director in terms of clause (g) of sub-section (I) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
Re: J.K. CEMENT LIMITED
Referred to in Paragraph I under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date
i. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets other than
furniture and fixtures and office equipments.
(b) All the assets 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) In our opinion and according to the information and explanations
given to us, the Company has not made any substantial disposal of fixed
assets during the year and therefore, do not effect going concern
assumption.
ii. In respect of its Inventories:
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on verification between physical
stocks and the book records were not material.
iii. In respect of loans, secured or unsecured, granted or taken by
the Company to or from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act 1956,
according to the information and explanations given to us :
(a) The Company had granted Unsecured Loans to Two Companies. The
maximum amount involved during the year was Rs. 379 lacs and the yearend
balance of such loan granted was Rs. 379 lacs.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company
(c) No terms and conditions for repayment of the loan are stipulated.
(d) There is no overdue amount of such loans.
(e) The Company has not taken any Loan from Companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956. As the Company has not taken any Loans, Secured or
Unsecured, from parties listed in the register maintained under section
301 of the Companies Act, 1956, the provisions of clause
4(iii)(f) and (g) of the Companies (Auditor''s Report) Order; 2003 are
not applicable to the Company
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
v. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956:
(a) According to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. five Lacs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market price at the relevant
time.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
provisions of sections 58A and 58AA and other relevant provisions of
the Companies Act, 1956,therefore, the provisions of clause 4(vi) of
the Companies (Auditor''s Report) Order; 2003, are not applicable to the
Company
vii. In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government, for
maintenance of cost records under section 209 (l)(d) of the Companies
Act, 1956 and we are of the opinion that prima-facie the prescribed
accounts and records have been maintained.
ix. According to the information and explanations given to us, in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees'' state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty cess
and any other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax ,wealth
tax, services tax, customs, excise duty were in arrear as at 31st
March, 2014 for a period more than six months from the date they became
payable.
(c) According to the records of the company income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess which have
not been deposited on account of any dispute, are as follows :-
Name of the
Statute Nature of the
Dues Amount Period to
which Forum
where Dispute
is
(Rs. in
Lacs) Amount
Relates Pending
Finance Act
2008 (State) Environment
and 1714.54 2008-09 to
201 3-14 Jodhpur High
Court and
Health Cess Bangalore
High Court
State Sales
Tax Act Sales Tax 4932.37 1991-92
onwards Various Court
in Uttar
Pradesh and
Rajasthan
Central
Sales Tax
Act Sales Tax 1334.55 1999
Onwards Appeal with
D.C.S.T
Rajasthan
Entry Tax Entry Tax 6287.67 July 2006
Onwards Appeal with
Jodhpur High
Court
Rajasthan
Entry Tax Interest on
Entry Tax 2456.13 2002-03
Onwards Appeal with
Jodhpur High
Court
Uttar
Pradesh
Entry Tax Interest on
Entry Tax 314.47 2008-09 and
2009-10 Appeal with
Supreme Court
Central
Excise Act,
1944 Excise Duty
including 419.02 1989 Supreme Court
Interest
thereon
Finance
Act, 1994 Service Tax 1085.42 June, 2007
to March,
2008 Central Excise
Department
Central
Excise
Act, 1944 Excise Duty
including 1598.51 July 1999
to March,
2008 Central Excise
Department
Interest
Service Tax Service Tax
on GTA 228.89 - Central Excise
Department
x. The Company does not have accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
bank.
xii. As explained to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities.
xiii. In our opinion, the Company is not a Chit Fund or a Nidhi Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order; 2003, are not applicable to the
Company
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order;
2003, are not applicable to the Company.
xv. The company has given guarantees for loans taken by others from
banks and financial institution .According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the company.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company we are of
the opinion that there are no funds raised on short term basis that
have been used for long-term investment.
xviii. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956 during the year
xix. According to information and explanations given to us, the
Company had created the security in respect of debentures issued.
xx. The Company has not raised any money by public issue during the
year
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For P.L.TANDON & Co
Chartered Accountants
Registration Number: 000186C
Signature
P.P. SINGH
Place : Kanpur (PARTNER)
Dated : 17th May 2014 Membership Number: 072754
Mar 31, 2013
We Have Audited The Accompanying Financial Statements Of J.K. Cement
Limited ("The Company"), Which Comprise The Balance Sheet As At 31st
March, 2013, The Statement Of Profit And Loss And Cash Flow Statement
For The Year Then Ended, And A Summary Of Significant Accounting
Policies And Other Explanatory Information.
MANAGEMENT''S Responsibility FOR THE Financial STATEMENTS
Management Is Responsible For The Preparation Of These Financial
Statements That Give A True And Fair View Of The Financial Position,
Financial Performance And Cash Flows Of The Company In Accordance With
The Accounting Standards Referred To In Sub-Section (3C) Of Section 211
Of The Companies Act, 1956 (''The Act''). This Responsibility Includes
The Design, Implementation And Maintenance Of Internal Control Relevant
To The Preparation And Presentation Of The Financial Statements That
Give A True And Fair View And Are Free From Material Misstatement,
Whether Due To Fraud Or Error.
Auditor''s Responsibility
Our Responsibility Is To Express An Opinion On These Financial
Statements Based On Our Audit. We Conducted Our Audit In Accordance
With The Standards On Auditing Issued By The Institute Of Chartered
Accountants Of India. Those Standards Require That We Comply With
Ethical Requirements And Plan And Perform The Audit To Obtain
Reasonable Assurance About Whether The Financial Statements Are Free
From Material Misstatement.
An Audit Involves Performing Procedures To Obtain Audit Evidence About
The Amounts And Disclosures In The Financial Statements. The Procedures
Selected Depend On The Auditor''s Judgment, Including The Assessment Of
The Risks Of Material Misstatement Of The Financial Statements, Whether
Due To Fraud Or Error. In Making Those Risk Assessments, The Auditor
Considers Internal Control Relevant To The Company''s Preparation And
Fair Presentation Of The Financial Statements In Order To Design Audit
Procedures That Are Appropriate In The Circumstances. An Audit Also
Includes Evaluating The Appropriateness Of Accounting Policies Used And
The Reasonableness Of The Accounting Estimates Made By Management, As
Well As Evaluating The Overall Presentation Of The Financial
Statements.
We Believe That The Audit Evidence We Have Obtained Is Sufficient And
Appropriate To Provide A Basis For Our Audit Opinion.
Opinion
In Our Opinion And To The Best Of Our Information And According To The
Explanations Given To Us, The Aforesaid Financial Statements Give The
Information Required By The Act In The Manner So Required And Give A
True And Fair View In Conformity With The Accounting Principles
Generally Accepted In India:
(A) In The Case Of The Balance Sheet, Of The State Of Affairs Of The
Company As At 31st March, 2013;
(B) In The Case Of The Statement Of Profit And Loss , Of The Profit For
The Year Ended On That Date; And
(C) In The Case Of The Cash Flow Statement, Of The Cash Flows For The
Year Ended On That Date.
Emphasis OF MATTER
Without Qualifying Our Opinion, We Draw Attention To Note No. 36.1 (A)
(IV) Of The Financial Statements Relating To The Order Of
The Competition Commission Of India (CCI), Concerning Alleged
Contravention Of The Provisions Of The Competition Act, 2002 And
Imposing A Penalty Of Rs. 12854 Lacs On The Company. The Company Is
Advised That It Has A Good Case Before Competition Appellate Tribunal
And Accordingly No Provision Has Been Considered Necessary By The
Company In This Regard.
REPORT ON OTHER LEGAL AND REGULATORY Requirements
1. As Required By The Companies (Auditor''s Report) Order, 2003 (''The
Order'') Issued By The Central Government Of India In Terms Of
Sub-Section (4A) Of Section 227 Of The Act, We Give In The Annexure A
Statement On The Matters Specified In Paragraphs 4 And 5 Of The Order.
2. As Required By Section 227(3) Of The Act, We Report That:
A. We Have Obtained All The Information And Explanations Which To The
Best Of Our Knowledge And Belief Were Necessary For The Purpose Of Our
Audit;
B. In Our Opinion Proper Books Of Account As Required By Law Have Been
Kept By The Company So Far As Appears From Our Examination Of Those
Books;
C. The Balance Sheet, The Statement Of Profit And Loss, And The Cash
Flow Statement Dealt With By This Report Are In Agreement With The
Books Of Account;
D. In Our Opinion, The Balance Sheet, The Statement Of Profit And
Loss, And The Cash Flow Statement Comply With The Accounting Standards
Referred To In Subsection (3C) Of Section 211 Of The Companies Act,
1956;
E. On The Basis Of Written Representations Received From The Directors
As On 31st March, 2013 And Taken On Record By The Board Of Directors,
None Of The Directors Is Disqualified As On 31st March, 2013 From Being
Appointed As A Director In Terms Of Clause (G) Of Sub-Section (1) Of
Section 274 Of The Companies Act, 1956.
F. Since The Central Government Has Not Issued Any Notification As To
The Rate At Which The Cess Is To Be Paid Under Section 441A Of The
Companies Act, 1956 Nor Has It Issued Any Rules Under The Said Section,
Prescribing The Manner In Which Such Cess Is To Be Paid, No Cess Is Due
And Payable By The Company.
Annexure To The Auditors'' Report
Re: J.K. Cement Limited
Referred To In Paragraph 1 Under The Heading Of "Report On Other Legal
And Regulatory Requirements" Of Our Report Of Even Date
I. In Respect Of Its Fixed Assets:
(A) The Company Has Maintained Proper Records Showing Full Particulars,
Including Quantitative Details And Situation Of Fixed Assets Other Than
Furniture And Fixtures And Office Equipments.
(B) All The Assets 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) In Our Opinion And According To The Information And Explanations
Given To Us, The Company Has Not Made Any Substantial Disposal Of Fixed
Assets During The Year.
ii. In Respect Of Its Inventories:
(A) As Explained To Us, Inventories Have Been Physically Verified
During The Year By The Management At Reasonable Intervals.
(B) In Our Opinion And According To The Information And Explanations
Given To Us, The Procedures Of Physical Verification Of Inventories
Followed By The Management Are Reasonable And Adequate In Relation To
The Size Of The Company And The Nature Of Its Business.
(C) In Our Opinion And According To The Information And Explanations
Given To Us, The Company Has Maintained Proper Records Of Its
Inventories And Discrepancies Noticed On Verification Between Physical
Stocks And The Book Records Were Not Material.
iii. In Respect Of Loans, Secured Or Unsecured, Granted Or Taken By The
Company To Or From Companies, Firms Or Other Parties Covered In The
Register Maintained Under Section 301 Of The Companies Act 1956,
According To The Information And Explanations Given To Us:
(A) The Company Had Granted Interest Free Unsecured Loans To Two
Companies. The Maximum Amount Involved During The Year Was Rs. 6356.13
Lacs And The Yearend Balance Of Such Loan Granted Was NIL.
(B) The Above Loans Are Interest Free And Other Terms And Conditions On
Which Loans Have Been Granted To Such Parties Are Not Prima Facie
Prejudicial To The Interest Of The Company.
(C) No Terms And Conditions For Repayment Of The Loan Are Stipulated.
(D) There Is No Overdue Amount Of Such Loans.
(E) The Company Has Not Taken Any Loan From Companies, Firms Or Other
Parties Covered In The Register Maintained Under Section 301 Of The
Companies Act, 1956. As The Company Has Not Taken Any Loans, Secured Or
Unsecured, From Parties Listed In The Register Maintained Under Section
301 Of The Companies Act, 1956, The Provisions Of Clause 4(Iii)
(F) And (G) Of The Companies (Auditor''s Report) Order, 2003 Are Not
Applicable To The Company.
iv. In Our Opinion And According To The Information And Explanations
Given To Us, There Are Adequate Internal Control Procedures
Commensurate With The Size Of The Company And The Nature Of Its
Business With Regard To Purchases Of Inventory, Fixed Assets And With
Regard To The Sale Of Goods And Services. During The Course Of Our
Audit, We Have Not Observed Any Continuing Failure To Correct Major
Weaknesses In Internal Control System Of The Company.
v. In Respect Of Transactions Entered In The Register Maintained In
Pursuance Of Section 301 Of The Companies Act, 1956:
(A) According To The Information And Explanations Given To Us, We Are
Of The Opinion That The Particulars Of All Contracts Or Arrangements
That Need To Be Entered Into The Register Maintained Under Section 301
Of The Companies Act, 1956 Have Been So Entered.
(B) In Our Opinion And According To The Information And Explanations
Given To Us, The Transactions Made In Pursuance Of Contracts Or
Arrangements Entered
In The Register Maintained Under Section 301 Of The Companies Act, 1956
And Exceeding The Value Of Rs. Five Lacs In Respect Of Any Party
During The Year Have Been Made At Prices Which Are Reasonable Having
Regard To Prevailing Market Price At The Relevant Time.
vi. In Our Opinion And According To The Information And Explanations
Given To Us, The Company Has Not Accepted Any Deposits Within The
Provisions Of Sections 58A And 58AA And Other Relevant Provisions Of
The Companies Act, 1956,Therefore, The Provisions Of Clause 4(Vi) Of
The Companies (Auditor''s Report) Order, 2003, Are Not Applicable To The
Company.
vii. In Our Opinion, The Company Has An Adequate Internal Audit System
Commensurate With The Size And The Nature Of Its Business.
viii. We Have Broadly Reviewed The Books Of Account Maintained By The
Company, Pursuant To The Rules Made By The Central Government, For
Maintenance Of Cost Records Under Section 209 (1)(D) Of The Companies
Act,1956 And We Are Of The Opinion That Prima-Facie The Prescribed
Accounts And Records Have Been Maintained.
ix. According To The Information And Explanations Given To Us, In
Respect Of Statutory And Other Dues:
(A) The Company Is Generally Regular In Depositing With Appropriate
Authorities Undisputed Statutory Dues Including Provident Fund,
Investor Education Protection Fund, Employees'' State Insurance, Income
Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
And Any Other Statutory Dues Applicable To It.
(B) According To The Information And Explanations Given To Us, No
Undisputed Amounts Payable In Respect Of Income Tax, Sales Tax, Wealth
Tax, Services Tax, Customs Excise Duty Were In Arrear As At 31st March,
2013 For A Period More Than Six Months From The Date They Became
Payable.
(C) According To The Records Of The Company, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty And Cess Which Have
Not Been Deposited On Account Of Any Dispute, Are As Follows:
Name Of The Statute Nature Of The Dues Amount
(Rs. In
Lacs)
Finance Act 2008 (State) Environment And 1256.78
Health Cess
State Sales Tax Act Sales Tax 2004.90
Central Sales Tax Act Sales Tax 1829.89
Rajasthan Entry Tax Entry Tax 5364.22
Rajasthan Entry Tax Interest On Entry Tax 1296.83
Uttar Pradesh Entry Tax Interest On Entry Tax 147.11
Central Excise Act,1944 Excise Duty Including 419.02
Interest Thereon
Finance Act, 1994 Service Tax 890.17
Central Excise Act,1944 Excise Duty Including 1452.55
Interest
Service Tax Service Tax On GTA 228.89
Name of the Statute Period To Which Forum Where Dispute Is
Pending
Amount Relates
Finance Act 2008 2008-09 To 2012-13 Jodhpur High Court And
Bangalore High Court
State Sales Tax Act 1991-92 Onwards Various Court In Uttar
Pradesh And Rajasthan
Central Sales Tax Act 1999 Onwards Appeal With D.C.S.T
Rajasthan Entry Tax July, 2006 Onwards Appeal With Jodhpur
High Court
Rajasthan Entry Tax 2002-03 Onwards Appeal With Jodhpur High
Court
Uttar Pradesh Entry Tax 2008-09 And Appeal With Supreme Court
2009-10
Central Excise Act,1944 1989 Supreme Court
Finance Act, 1994 June, 2007 to Central Excise Department
March, 2008
Central Excise Act,1944 July, 1999 To
March, 2008 Central Excise Department
Service Tax - Central Excise Department
X. The Company Does Not Have Accumulated Losses At The End Of The
Financial Year And Has Not Incurred Cash Losses During The Financial
Year Covered By Our Audit And The Immediately Preceding Financial Year.
Xi. In Our Opinion And According To The Information And Explanations
Given To Us, The Company Has Not Defaulted In Repayment Of Dues To
Bank.
Xii. As Explained To Us, The Company Has Not Granted Any Loans Or
Advances On The Basis Of Security By Way Of Pledge Of Shares,
Debentures Or Any Other Securities.
Xiii. In Our Opinion, The Company Is Not A Chit Fund Or A Nidhi Mutual
Benefit Fund/Society. Therefore, The Provisions Of Clause 4(Xiii) Of
The Companies (Auditor''s Report) Order, 2003, Are Not Applicable To The
Company.
Xiv. In Our Opinion, The Company Is Not Dealing In Or Trading In
Shares, Securities, Debentures And Other Investments. Therefore, The
Provisions Of Clause 4(Xiv) Of The Companies (Auditor''s Report) Order,
2003, Are Not Applicable To The Company.
Xv. The Company Has Given Guarantees For Loans Taken By Others From
Banks And Financial Institution . According To The Information And
Explanations Given To Us, We Are Of The Opinion That The Terms And
Conditions Thereof Are Not Prima Facie Prejudicial To The Interest Of
The Company.
Xvi. In Our Opinion, The Term Loans Have Been Applied For The Purpose
For Which They Were Raised.
Xvii. According To The Information And Explanations Given To Us And On
An Overall Examination Of The Balance Sheet Of The Company, We Are Of
The Opinion That There Are No Funds Raised On Short Term Basis That
Have Been Used For Long- Term Investment.
Xviii. According To The Information And Explanations Given To Us, The
Company Has Not Made Any Preferential Allotment Of Shares To Parties
And Companies Covered In The Register Maintained Under Section 301 Of
The Companies Act, 1956 During The Year.
Xix. According To Information And Explanations Given To Us, The Company
Had Created The Security In Respect Of Debentures Issued.
Xx. The Company Has Not Raised Any Money By Public Issue During The
Year.
Xxi. According To The Information And Explanations Given To Us, No
Fraud On Or By The Company Has Been Noticed Or Reported During The
Course Of Our Audit.
For P.L. Tandon & Co.
Chartered Accountants
Registration Number: 000186C
Signature
(P.P. SINGH)
Partner
Membership Number: 072754
Place : Kanpur
Date : 11th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of J.K. Cement Limited,
as at 31st March, 2012, the statement of Profit and Loss and also the
Cash Flow statement of the company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the company's Management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the companies (auditor's Report) Order, 2003 issued
by the central Government of india in terms of sub-section (4a) of
section 227 of the companies Act, 1956, we give in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
4. Further to our comments in the Annexure referred to above, we
report that:-
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) in our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books;
c) The Balance Sheet, the statement of Profit & Loss and the cash Flow
statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance sheet, the statement of Profit & Loss
and the Cash Flow statement dealt with by this report comply with the
Accounting standards referred to in sub- section (3c) of section 211 of
the companies Act, 1956;
e) On the basis of written representations received from the directors,
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the companies Act, 1956;
f) in our opinion, and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant Accounting Polices and notes thereon, give the information
required by the companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in india:
(a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March, 2012;
(b) In the case of the statement of Profit and Loss of the Profit for
the year ended on that date; and
(c) in the case of the cash Flow statement, of the cash Flows for the
year ended on that date.
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets other than
furniture and fixtures and office equipments.
(b) All the assets 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) in our opinion and according to the information and explanations
given to us, the company has not made any substantial disposal of fixed
assets during the year.
(ii) in respect of its inventories:
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(b) in our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) in our opinion and according to the information and explanations
given to us, the company has maintained proper records of its
inventories and discrepancies noticed on verification between physical
stocks and the book records were not material.
(iii) in respect of loans, secured or unsecured, granted or taken by
the Company to or from Companies, firms or other parties covered in the
register maintained under section 301 of the companies act 1956,
according to the information and explanations given to us :
(a) The company has/had granted interest free unsecured loans to Two
companies. The maximum amount involved during the year was Rs 6556.13
Lacs and the yearend balance of such loan granted was Rs 6356.13 lacs.
(b) The above loans are interest free and other terms and conditions on
which loans have been granted to such parties are not prima facie
prejudicial to the interest of the company.
(c) No terms and conditions for repayment of the loan are stipulated.
(d) There is no overdue amount of such loans.
(e) The company has not taken any loan from Companies, firms or other
parties covered in the register maintained under section 301 of the
companies act, 1956. As the company has not taken any loans, secured or
Unsecured, from parties listed in the register maintained under section
301 of the companies act, 1956, the provisions of clause 4(iii)(f) and
(g) of the companies (auditor's Report) Order, 2003 are not applicable
to the company.
(iv) in our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the company.
(v) in respect of transactions entered in the register maintained in
pursuance of section 301 of the companies act, 1956 :
(a) according to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the companies act, 1956 have been so entered.
(b) in our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies Ac, 1956 and exceeding the value of Rs five Lacs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market price at the relevant
time.
(vi) in our opinion and according to the information and explanations
given to us, the company has not accepted any deposits within the
provisions of sections 58a and 58AA and other relevant provisions of
the companies Act, 1956,therefore, the provisions of clause 4(vi) of
the companies (Auditor's Report) Order, 2003, are not applicable to the
company.
(vii) in our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company, pursuant to the rules made by the central Government, for
maintenance of cost records under section 209 (1)(d) of the companies
Act,1956 and we are of the opinion that prima-facie the prescribed
accounts and records have been maintained.
(ix) According to the information and explanations given to us, in
respect of statutory and other dues:
(a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees' state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and any other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax ,wealth
tax, services tax, customs excise duty were in arrear as at 31st March,
2012 for a period more than six months from the date they became
payable.
(c) According to the records of the company, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess which have
not been deposited on account of any dispute, are as follows :-
Name of the Nature of the
dues Amount Period to
which Forum where
dispute
Statute (Rs in
Lacs) amount
relates is pending
Finance Act
2008 Environment &
Health 935.46 2008-09 High court
Jodhpur &
(state) cess Bangalore
High court.
State Sales
Tax Act Sales Tax 1841.44 1991-92 Various court
in U.P.
onwards Rajasthan
central
sales Tax Act sales Tax 1745.65 1999 onwards Appeal with
D.c.s.T
Rajasthan
Entry Tax Entry Tax 4402.21 July, 2006 Appeal with
Jodhpur
onwards High court
Rajasthan
Entry Tax Interest on
Entry Tax 1296.83 2002-03 Appeal with
Jodhpur
onwards High court
U.P. Entry
Tax Interest on
Entry Tax 306.43 2004-05 Appeal with
supreme
onwards court
central
Excise Excise duty
Including 419.02 1989 Supreme court
Act,1944 Interest thereon
Finance
Act, 1994 Service Tax 890.17 June, 2007
to central
Excise Dept.
March, 2008
Central
Excise Excise duty 1334.95 July,99 to central
Excise Dept.
Act,1944 March 08
Services Tax Services Tax
on GTA 228.89 Central
Excise Dept.
custom Duty custom Duty on
petcock 176.28 sept.2009 CEGAT
(x) The company does not have accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
bank.
(xii) As explained to us, the company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities.
(xiii) In our opinion, the company is not a chit Fund or a Nidhi Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of
the companies (Auditor's Report) Order, 2003, are not applicable to the
company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the companies (Auditor's Report) Order,
2003, are not applicable to the company.
(xv) In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from Banks or Financial Institution. Accordingly, paragraph
4(xv) of the Order is not applicable.
(xvi) In our opinion, the term loan have been applied for the purpose
for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance sheet of the company, we are of
the opinion that there are no funds raised on short term basis that
have been used for long-term investment.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the companies Act, 1956 during the year.
(xix) According to information and explanations given to us, the
company has created the security in respect of debentures issued.
(xx) The company has not raised any money by public issue during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For P.L. TANDON & CO.
CHARTERED ACCOUNTANTS
Registration No. 000186C
Place : Kanpur.
Date : 26th May, 2012
(P.P.Singh)
PARTNER
Membership No.072754
Mar 31, 2011
1. We have audited the attached Balance Sheet of J.K. Cement Limited,
as at 31st March, 2011, the Profit and Loss Account and also the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we give in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
4. Further to our comments in the Annexure referred to above, we
report that :-
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books;
c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and the
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of written representations received from the directors,
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts read together with
notes thereon, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India :
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(ii) in the case of the Profit & Loss Account of the Profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Annexure to the Auditors1 Report
Re: J.K. CEMENT LIMITED (Referred to in Paragraph (3) of our report of
even date)
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets other than
furniture and fixtures and office equipments.
(b) All the assets 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) In our opinion and according to the information and explanations
given to us, the Company has not made any substantial disposal of fixed
assets during the year.
(ii) In respect of its Inventories :
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on verification between physical
stocks and the book records were not material.
(iii) In respect of loans, secured or unsecured, granted or taken by
the Company to or from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act 1956,
according to the information and explanations given to us :
(a) The Company has/had granted interest free unsecured loans to four
Companies. The maximum amount involved duringtheyear was Rs. 2307.25 Lacs
and the year-end balance of such loan granted was Rs. 1885.79 Lacs.
(b) The above loans are interest free and other terms and conditions on
which loans have been granted to such parties are not prima facie
prejudicial to the interest of the Company.
(c) No terms and conditions for repayment of the loan are stipulated.
(d) There is no overdue amount of such loans.
(e) The Company has not taken any Loan from Companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956. As the Company has not taken any Loans, Secured
or Unsecured, from parties listed in the register maintained under
section 301 of the Companies Act, 1956, the provisions of clause
4(iii)(f) and (g) of the Companies (Auditors Report) Order, 2003 are
not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956 :
(a) According to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in respect
of any party during the year have been made at prices which are
reasonable having regard to prevailing market price at the relevant
time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
provisions of sections 58A and 58AA and other relevant provisions of
the Companies Act, 1956,therefore, the provisions of clause 4(vi) of
the Companies (Auditors Report) Order, 2003, are not applicable to the
Company.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company, pursuant to the rules made by the Central Government, for
maintenance of cost records under section 209 (l)(d) of the Companies
Act,1956 and we are of the opinion that prima-facie the prescribed
accounts and records have been maintained.
(ix) According to the information and explanations given to us, in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and any other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax .wealth
tax, service tax, custom, excise duty were in arrear as at 31st March,
2011 for a period more than six months from the date they became
payable.
(c) According to the records of the company, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess which have
not been deposited on account of any dispute, are as follows
Name of the Statute Nature of
the dues Amount Period to
which Forum where
dispute
Rs. Lacs amount
relates is pending
Income Tax Act Income Tax 1679.70 2008-09 CIT Appeal,
Kanpur
Finance Act 2008
(State) Environment &
Health Cess 740.25 2008-09 Court of
Rajasthan High
CourtJodhpur
State Sales Tax Act Sales Tax 2018.71 1991-92
onwards Various Courts
in U.P. Rajasthan
Central Sales
Tax Act Sales Tax 3892.28 1999
onwards Appeal with
D.C.S.T
Rajasthan Entry Tax Entry Tax 3503.63 July, 2006
onwards Appeal with
Jodhpur
High Court
U.P. Entry Tax Entry Tax 737.35 Nov.2007
onwards Appeal with
Allahabad High
Court
Central Excise
Act,1944 Excise duty
Including 419.02 1989 Supreme Court
Interest thereon
Custom Duty Custom Duty 176.28 2009-10 Appeal with CEGAT
Finance Act, 1994 Service Tax 1085.42 June,
2007 to Central Excise
Dept.
March, 2008
Central Excise
Act, 1944 Excise duty 1229.67 2007-08 to
2009-10 Central Excise
Dept.
Service Tax Service Tax
on GTA 228.89 2009-10 Central Excise
Dept
(x) The Company does not have accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xi) In ouropinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
bank.
(xii) As explained to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities.
(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003, are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Therefore, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003, are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from Banks or Financial Institution. Accordingly, paragraph
4(xv) of the Order is not applicable.
(xvi) In our opinion, the term loan have been applied for the purpose
for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short term basis that
have been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956 during the year.
(xix) According to information and explanations given to us, during the
year covered by our audit, the company had issued 4000 debentures of Z
10 Lac each. The company has created security in respect of 2500
debentures issued till 31-03-2011 and security in respect of 1500
debentures has been created subsequently.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For P.L. TANDON & CO.,
CHARTERED ACCOUNTANTS
Registration No. 000186C
Place ; Kanpur.
Date : 28th May2011
(A.K. AGARWAL)
PARTNER
Membership No.71548
Mar 31, 2010
1. We have audited the attached Balance Sheet of J.K. Cement Limited,
as at 31st March, 2010, the Profit and Loss Account and also the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
CompanyÃs Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also ncludes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report] Order, 2003 issued
by the Central Government of India in terms of sub-section (4-A) of
Section 227 of the Companies Act,1956, we give in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said order.
4. Further to our comments in the Annexure referred to above, we
report that
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books;
c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, the Profit
& Loss Account and the Cash Flow Statement dealt with by this report
comply with the Accounting Standards referred to in sub-section [3C] of
Section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2010 from being appointed as a director in terms of clause (g) of
sub-section [1] of Section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts read together with
notes thereon, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India :
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) in the case of the Profit & Loss Account of the Profit for the year
ended on that date; and
(c) in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Re: J.K. CEMENT LIMITED
(Referred to in Paragraph (3) of our report of even date]
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets other than
furniture and fixtures and office equipments.
(b) All the assets 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 ) In our opinion and according to the information and explanations
given to us, the Company has not made any substantial disposal of fixed
assets during the year
(ii) In respect of its Inventories
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on verification between physical
stocks and the book records were not material.
(iii) In respect of loans, secured or unsecured, granted or taken by
the Company to or from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act 1956,
according to the information and explanations given to us
(a) The Company has/had granted interest free unsecured loans to
Companies. The maximum amount involved during the year was Rs. 3951.57
Lacs and the year end balance of such loan granted was Rs. 2151.57
Lacs.
b) The above loans are interest free and other
terms and conditions on which loans have been granted to such parties
are not prima facie prejudicial to the interest of the Company.
(c) No terms and conditions for repayment of the loan are stipulated .
(d) There is no overdue amount of such loans.
(e) The Company has not taken any Loan from Companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956. As the Company has not taken any Loans, Secured or
Unsecured, from parties listed in the register maintained under section
301 of the Companies Act, 1956, the provisions of clause 4(iii)(f) and
(g) of the Companies (Auditors Report) Order, 2003 are not applicable
to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956
(a) According to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market price at the relevant
time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted
any deposits within the provisions of sections 58A and 58AA and other
relevant provisions of the Companies Act,
1956,therefore, the provisions of clause 4(vi) of the Companies
(Auditors Report) Order, 2003, are not applicable to the
Company.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company, pursuant to the rules made by the
Central Government, for maintenance of cost records under section 209
(1)(d) of the Companies Act,1956 and we are of the opinion that
prima-facie the prescribed accounts and records have been maintained.
(ix) According to the information and explanations given to us, in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employeesà state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and any other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax ,wealth
tax, services tax, customs excise duty were in arrear as at 31st March,
2010 for a period more than six months from the date they became
payable.
(c) According to the records of the company, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess which have
not been deposited on account of any dispute, are as follows
Name of the Statute Nature of the Amount Period to which Forum where
Dues Rs./Lacs amount relates dispute is
pending
Finance Act 2008
(State) Environment & 570.74 2008-09 Jodhpur High
Court
Health Cess 2009-10
State Sales Tax Act Sales Tax 924.40 1991-92 onwards Various
Courts In U.P.
Rajasthan
Central SalesTaxAct Sales Tax 2347.22 1999 onwards Appellate
Authority
Rajasthan Entry Tax Entry Tax 2670.00 July, 2006 Jodhpur High
onwards Court
J.P. Entry Tax Entry Tax 737.35 Nov.2007 Allahabad High
onwards Court
Central Excise Act, Excise duty 419.02 1989 Supeme Court
1944 Including
Interest
thereon
Finance Act, 1994 Service Tax 1085.42 June, 2007 to Central Excise
Dept.
March,2008
Central Excise Act, Excise duty 28.22 April, 2007- Central Excise
1994 Dept.
on non MRP March,2008
Sale
Central Excise Act, Excise duty 153.70 2009-10 Appellate
1994 Tribunal
Services Tax Service Tax on229.88 2009-10 Central Excise
Dept.
GTA
(x) The Company does not have accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
bank.
(xii) As explained to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities.
(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003, are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or
trading in shares, securities, debentures and other nvestments.
Therefore, the provisions of clause 4(xiv] of the Companies (Auditors
Report) Order, 2003, are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from Banks or Financial Institution. Accordingly, paragraph
4(xv) of the Order is not applicable.
(xvi) In our opinion, the term loan have been applied for the purpose
for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short term basis that
have been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956 during the year.
(xix) As the Company has no debenture outstanding at any time during
the year, the provisions of clause 4 (xix) of the Companies (Auditors
Report) Order, 2003, are not applicable to the Company.
(xx) The Company has not raised any money by public ssue during the
year .
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For P.L. TANDON & CO.,
CHARTERED ACCOUNTANTS
Registration No. 000186C
Place: Kanpur.
Date : 29th May, 2010
(A.K. AGARWAL)
PARTNER
Membership No.71548