To the Members of UltraTech Cement Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of UltraTech Cement Limited (the "Company") and UltraTech Employees Welfare Trust ("Trust") which comprise the standalone balance sheet as at 31 March 2025, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of report of one of the joint auditors of the Company on financial statements of such Trust as were audited by one of the joint auditors of the Company, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 2025, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone 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 standalone 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 obtained by us along with the consideration of report of the one of the joint auditors of the Company referred to in the "Other Matter" section below, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Emphasis of Matters
a. We draw attention to Note 37 to the standalone financial statements regarding the Composite Scheme of Arrangement for merger of Cement Business Division of Kesoram Industries Limited with the Company ('Scheme') which has been described in the aforesaid note. The Scheme has been approved by National Company Law Tribunal, Kolkata and Mumbai ('NCLT') vide its orders dated 14 November 2024 and 26 November 2024 respectively with appointed date of 01 April 2024 and a certified copy has been filed by the Company with the Registrar of Companies, Mumbai, on 26 December 2024. In accordance with the Scheme approved by the NCLT, the Company has given effect to the Scheme from the retrospective appointed date specified therein i.e. 01 April 2024 which overrides the relevant requirement of Ind AS 103 "Business Combinations" (according to which the Scheme would have been accounted for from 01 March 2025 which is the date of acquisition as per the aforesaid standard). The financial impact of the aforesaid treatment has been disclosed in the aforesaid note.
Our opinion is not modified in respect of this matter.
b. We draw attention to Note 34(b) of the standalone financial statements, which refers to the orders dated 31 August 2016 (Penalty of Rs. 1,616.83 crores) and 19 January 2017 (Penalty of Rs. 68.30 crores) of the Competition Commission of India ('CCI') against which the Company (including the erstwhile UltraTech Nathdwara Cement Limited) had filed appeals. Upon the National Company Law Appellate Tribunal ("NCLAT") disallowing its appeals against the CCI order dated 31 August 2016, the Company has filed appeals before the Hon'ble Supreme Court of lndia, which has by its order dated 5 October 2018, granted a stay against the NCLAT order. Consequently, the Company has deposited an amount of Rs. 161.68 crores equivalent to 10% of the penalty of Rs. 1,616.83 crores recorded as asset. The Company, backed by legal opinions, believes that it has a good case in both the matters basis which no provision has been recognised in the books of account.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Revenue recognition - Discounts, incentives and rebates
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See Note 1(B)(o) and 56 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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Revenue is measured net of discounts, incentives and
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Our audit procedures included:
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rebates given to the customers on the Company's sales.
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We have assessed the Company's accounting policies
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The Company's presence across different marketing
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relating to revenue, discounts, incentives and rebates by
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regions within the country and the competitive business
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comparing with applicable accounting standards.
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environment makes the assessment of various types of discounts, incentives and rebates complex.
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We have evaluated the design and implementation and tested the operating effectiveness of Company's internal
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Therefore, there is a risk of revenue being misstated as
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controls over the provisions, approvals and disbursements
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a result of variations in the assessment of discounts,
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of discounts, incentives and rebates.
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incentives and rebates.
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We have assessed the Company's computations for accrual
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Given the complexity and amounts pertaining to such
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of discounts, incentives and rebates, on a sample basis,
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provision for discounts, incentives and rebates being
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and compared the accruals made with the approved
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significant, this is a key audit matter.
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schemes and underlying documents.
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We have verified, on a sample basis, the underlying documentation for discounts, incentives and rebates recorded and disbursed during the year.
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We have compared the historical trend of payments and reversal of discounts, incentives and rebates to provisions made to assess the current year accruals.
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Regulations - Litigations and claims
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See Note 1(B)(m), 22 and 34 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The Company operates in various States within India
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Our audit procedures included:
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and is exposed to different Central and State/Local laws, regulations and interpretations thereof. Due to a complex regulatory environment, there is an inherent risk of litigations and claims.
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We understood the processes, evaluated the design and implementation of controls and tested the operating effectiveness of the Company's controls over the recording and re-assessment of uncertain legal positions, claims
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Consequently, provisions and contingent liability
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(including claims receivable) and contingent liabilities.
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disclosures may arise from indirect tax proceedings, legal proceedings, including regulatory and other government/ department proceedings, as well as investigations by authorities and commercial claims.
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We have gained an understanding of outstanding litigations against the Company from the Company's inhouse legal counsel and other key managerial personnel who have knowledge of these matters.
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The Company applies significant judgement in estimating the likelihood of the future outcome in each case and in determining the provisions or disclosures required for each matter.
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We have read the correspondence between the Company and the various indirect tax/legal authorities and the legal opinions of external legal advisors, where applicable, for significant matters.
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Resolution of tax and legal proceedings may span over
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We have challenged the Company's estimate of the
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multiple years due to the highly complex nature and
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possible outcome of the disputed cases based on
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magnitude of the legal matters involved and may involve
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applicable indirect tax laws and legal precedence by
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protracted negotiation or litigation.
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involving our tax specialists.
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These estimates and outcome could change significantly
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We have assessed the adequacy of the amount of
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over time as new facts emerge and each legal case
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provisions and disclosures in respect of contingent
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progresses.
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liabilities for indirect tax and legal matters.
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Given the inherent complexity and magnitude of potential exposures and the judgement necessary to estimate the amount of provisions required or to determine required disclosures, this is a key audit matter.
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Business combination - Acquisition of Cement Business Division of Kesoram Industries Limited
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See Note 1(B)(dd) and 37 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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During the financial year, the Company acquired the
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Our audit procedures included:
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cement business division of Kesoram Industries Limited.
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We have read the scheme of arrangement and regulatory
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The Company undertook business combinations
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orders to understand the key terms and conditions of the
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that required accounting under Ind AS 103, Business
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acquisition.
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Combinations. This process necessitates the application of the Purchase Price Allocation (PPA) method, which involves allocating the purchase consideration to the
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We have evaluated the accounting treatment followed by the Company with reference to provisions of Ind AS 103.
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identifiable assets acquired and liabilities assumed based on their fair values. This involves complexity and significant judgment in fair value assessments.
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We have obtained understanding of the process followed by the Company and evaluated the design and implementation, tested the operating effectiveness of
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Considering the complexity and significant judgment
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key internal controls related to the Company's valuation
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required in fair value assessments, combined with the
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process.
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material magnitude of the acquisitions undertaken by the Company, this matter has been identified as a key audit matter.
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We have evaluated competence, capabilities and independence of the experts engaged by the Company.
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We have involved our valuation specialist with specialized skills and knowledge to assist in:
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• Evaluating the appropriateness of the valuation
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methodologies applied and also, to test the inputs to the valuation models used to determine the value of Property, Plant and Equipment and Intangible Assets.
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• Evaluating the key assumptions such as discount rate,
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royalty rate, growth rate etc. by comparing it to a range of rates that were independently developed using publicly available market indices and market data for comparable entities.
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• Evaluating market rates and replacement cost basis
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knowledge of the business and independent market sources to develop the fair value of property, plant and equipment.
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We have involved our indirect tax specialist with specialised skills and knowledge to assist in evaluating the management judgement to recognise and measure fair value of indirect tax litigations, for selected matters.
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We have assessed the adequacy of the Company's disclosures in respect of the acquisition in accordance with the requirements of Ind AS 103.
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Other Information
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditor's reports thereon. The annual report is expected to be made available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.
Management's and Board of Directors'/Trustees' Responsibilities for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The respective Management and Board of Directors of the Company/Trustees of the Trust are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company/Trust 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 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 financial statements, the respective Management and Board of Directors/Trustees are responsible for assessing the ability of the Company/Trust to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors/Trustees either intends to liquidate the Company/Trust or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors/Trustees are responsible for overseeing the financial reporting process of the Company/Trust.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone 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 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 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 the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 standalone 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 financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial statements of the Trust of the Company to express an opinion on the standalone financial statements. For the Trust included in the standalone financial statements, which has been audited by one of the joint auditors of the Company, such one of the joint auditors of the Company remain responsible for the direction, supervision and performance of the audit carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled "Other Matter" in this audit report.
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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
The standalone financial statements includes the audited financial statements of one Trust whose financial statements reflects total assets (before consolidation adjustments) of Rs. 419.89 crores as at 31 March 2025, total revenue (before consolidation adjustments) of Rs. Nil crores and net cash outflows (before consolidation adjustments) of Rs. 22.86 crores for the year ended on that date, as considered in the standalone financial statements, which has been audited by one of the joint auditors of the Company. The independent auditor's report on the financial statements of this entity has been furnished to us by the management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of this entity, is based solely on the report of such auditor and the procedures performed by us as stated in the paragraph above.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, we report, to the extent applicable, 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 except for the matters stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act read with the overriding effect of the Scheme approved by NCLT as described in Emphasis of Matter paragraph above.
e. On the basis of the written representations received from the directors as on 1 April 2025 and 7 April 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of Section 164(2) of the Act.
f. The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2A(b) above on reporting under Section 143(3)(b) of the Act and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
B. 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, in our opinion and to the best of our information and according to the
explanations given to us
a. The Company has disclosed the impact of pending litigations as at 31 March 2025 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements.
b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 48 to the standalone financial statements.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d. (i) The management of the Company represented to us that, to the best of its knowledge and belief, as
disclosed in the Note 60(vi) to the standalone financial statements, 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 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.
(ii) The management of the Company represented to us that, to the best of its knowledge and belief, as disclosed in the Note 60(vii) to the standalone financial statements, 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 directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 49 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares:
i. for one of the accounting software, the feature of audit trail (edit log facility) was not enabled at the database level to log any direct data changes upto 9 August 2024.
ii. for one of the accounting software relating to the business acquired by the Company, the feature of audit trail (edit log facility) was not enabled at the application level and at the database level to log any direct data changes upto 28 February 2025.
Further, where audit trail (edit log) facility was enabled and operated throughout the year, we did not come across any instance of audit trail feature being tampered with. Additionally, other than for the softwares where audit trail (edit log) facility was not enabled in the previous year, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
C. With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director by the Company is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP For KKC & Associates LLP
Chartered Accountants (formerly Khimji Kunverji & Co LLP)
Firm's Registration No.: 101248W/W-100022 Chartered Accountants
Firm's Registration No.: 105146W/W100621
Vikas R Kasat Hasmukh B Dedhia
Partner Partner
Membership No: 105317 Membership No: 033494
ICAI UDIN: 25105317BMOOEF7177 ICAI UDIN: 25033494BMJKDH9434
Mumbai Mumbai
28 April 2025 28 April 2025
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