JK Cement532644Compliance status update

Auditors certify covenant compliance; security cover at 3.76 times for listed NCDs

JK Cement shared its statutory auditors' certificate on security cover and covenant compliance for its listed NCDs as at September 30, 2026.

By ScoutQuest · Sat 24 Oct 2026, 4:21 PM IST · 2 min read

DSCR: 2.12 times (minimum 1.10)
TOL/TNW: 1.72 times (maximum 4.00)
Cover on book value: 3.76 times (minimum 1.20)

What was shared

JK Cement has submitted a certificate from its statutory auditors, S.R. Batliboi & Co. LLP, on the book value of assets offered as security and on compliance with the covenants of its debenture trust deed, as at September 30, 2026. It relates to the company's listed, rated, secured, non-convertible, non-cumulative, redeemable debentures, and is addressed for submission to the debenture trustee, IDBI Trusteeship Services Limited.

The debentures covered

Original issue amount: Rs. 100 crores, now with a book value of Rs. 37.5 crores outstanding as at September 30, 2026
Security: the immovable and movable fixed assets of the grey cement plant at Muddapur, Karnataka (excluding mining land, mining lease, captive power plant and vehicles)
Trust deed governing the debentures is dated March 20, 2023

Covenants tested and the reported position

Debt Service Coverage Ratio: required at least 1.10 times; reported 2.12 times
Total Outside Liabilities / Tangible Net Worth: required maximum 4.00 times; reported 1.72 times
Security assets cover: required at least 1.20 times; cover on book value reported 3.76 times

Each of the three is therefore inside the limit set in the trust deed, with the reported figures showing headroom against the required levels.

What the auditors concluded

The report is a limited assurance engagement. The auditors state that nothing has come to their attention that causes them to believe that the book values of the assets shown in the statement are not in agreement with the books of account behind the unaudited standalone results for the quarter ended September 30, 2026, or that the company is not in compliance with the financial covenants as on that date. They also note that their work did not involve an audit and that they did not independently verify the market value of the assets disclosed.

Other covenants

The company states it is in compliance with the remaining conditions of the trust deed as on September 30, 2026. These are restrictions on changing the nature of the business, amending the memorandum or articles in a manner with a material adverse effect, altering the structure of the debentures (coupon, conversion, redemption), abandoning the business or undertaking amalgamation, demerger, merger or reconstruction, declaring dividend while in default, making investments upon an event of default, voluntary winding up or insolvency updates, and consenting to settlements of disputes.

How a reader can use this

This is a periodic disclosure that a company with listed debt makes, confirming that the assets charged to debenture holders and the financial ratios agreed with them are as reported.
The three ratios are the checkpoints lenders set: they measure the ability to service debt, the overall borrowing relative to net worth, and the cushion of asset value behind the debt.
The certificate speaks to the standalone books as at September 30, 2026 and to covenant compliance on that date; it is a status confirmation rather than a statement about future earnings or operations.

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