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JK Tyre & Industries Ltd.

BSE: 530007 Sector: Auto
NSE: JKTYRE ISIN Code: INE573A01042
BSE 10:13 | 01 Dec 132.35 3.70
(2.88%)
OPEN

130.25

HIGH

133.30

LOW

130.25

NSE 10:04 | 01 Dec 132.80 4.10
(3.19%)
OPEN

131.30

HIGH

133.35

LOW

130.30

OPEN 130.25
PREVIOUS CLOSE 128.65
VOLUME 29949
52-Week high 171.60
52-Week low 66.25
P/E 9.25
Mkt Cap.(Rs cr) 3,259
Buy Price 132.30
Buy Qty 378.00
Sell Price 132.45
Sell Qty 99.00
OPEN 130.25
CLOSE 128.65
VOLUME 29949
52-Week high 171.60
52-Week low 66.25
P/E 9.25
Mkt Cap.(Rs cr) 3,259
Buy Price 132.30
Buy Qty 378.00
Sell Price 132.45
Sell Qty 99.00

JK Tyre & Industries Ltd. (JKTYRE) - Auditors Report

Company auditors report

To the Members of

JK Tyre & Industries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of JK Tyre &Industries Limited ("the Company") which comprise the Balance Sheet as at31st March

2021 the Statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial Companies Act 2013 (" the Act")in the manner so required and give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2021 the profit and total comprehensive income changes in equity andits cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the Standalone financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.statementsgive the informationrequired by the

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be statements communicated in our report.

Key Audit Matter Auditor's Response
Revenue Recognition Principal Audit Procedures
The Company recognises revenue at the point in time when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In determining the transaction price for the sale the Company considers the effects of variable consideration and consideration receivable from the customer. We performed process walkthrough to understand the adequacy and the design of the revenue cycle. We tested internal controls in the revenue and trade receivables over the accuracy and timing of revenue accounted in the financial statements.
For the year ended 31st March 2021 the Company's Statement of Profit I 6088.16 crores. Some terms of sales &Loss included Sales of arrangements are governed by Incoterms including the timing of transfer of control. The nature of rebates discounts and sales returns if any involve judgment in determining sales revenues and revenue cut-off. The risk is therefore that revenue may not be recognised in the correct period or that revenue and associated profit is misstated. Understanding the policies and procedures applied to revenue recognition as well as compliance thereof including an analysis of the effectiveness of controls related to revenue recognition processes employed by the Company.
Refer to Accounting policies Note 1.3 (xiii) and Note No. 24 of the standalone Financial Statements. We reviewed the revenue recognition policy applied by the Company to ensure its compliance with Ind-AS 115 requirements. We performed a detailed testing on transactions ensuring revenues were recognised in the correct accounting period. We also tested journal entries recognised in revenue focusing on unusual or irregular transactions.
We validated the appropriateness and completeness of the related disclosures in Note No. 24 of the Standalone financial statements.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance or conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withInd AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. The Board of Directors are also responsible foroverseeing 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 StandaloneFinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financialcontrols relevant to the audit in order todesign 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 hasadequate internal financialcontrols system in place and the operating effectiveness ofsuch controls.

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

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions doubt on the Company's that may cast significantability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion.

Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider qualitative factors in (i) planning the scope of our audit workand in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the significantauditfindings including and any significant in internal control that we identify duringour audit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the standalone financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order

2016 ("the Order") issued by the Central Government of India in terms ofsection 143 (11) of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash quantitative materialityand

Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified

Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controlswithreferencetofinancialstatement of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure

B". Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company's internal financial controls with reference to financialstatement.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. - Refer Note 31 & 35 to thestandalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts. iii. There has been no delay in transferring amounts required to betransferred to the

Investor Education and Protection Fund by the Company.

Annexure ‘A' to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of JK Tyre & Industries Limited ofeven date)

i. In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management according to theprogramme of periodical verification in phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its fixed assets.

According to the information and explanations given to us no material discrepancieswere noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.

ii. We have been explained by the management that the inventory (except stock lyingwith the third parties and in transit for which confirmations have been received/material received) has been physically verified at reasonable intervals and the proceduresof physical verification of inventory followed by the management are reasonable inrelation to the size of the Company and nature of its business. According to informationand explanations given to us the material discrepancies if any noticed on such physicalverification of inventory as compared to book records were properly dealt within the booksof accounts.

iii. According to the records and information and explanation made available to us theCompany has not granted any loans secured or unsecured to companies firms LLP andother parties covered in the register maintained under section 189 of the Companies Act

2013 ("the Act"). However Outstanding year-end balance of deferredreceivable from a Company is

I 33.90 crores related to past year transaction under the Companies Act 1956 and:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(b) In respect of aforesaid receivable receipts of principals as well as interestaccrued thereon are as per stipulated terms and conditions.

(c) There is no overdue amount in respect of principal and interest.

iv. According to the information explanations and representations given to us andbased upon audit procedures performed we are of the opinion that in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofsections 185 and 186 of the Act.

v. In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India and theprovisions of Section 73 to76 of the Act or any other relevant provisions of the Act andthe rules framed thereunder with regard to deposits accepted from the public. We have beeninformed that no order has been passed by the Company Law Board or National Company

Law Tribunal or Reserve Bank of India or any Court or other Tribunal in this regard.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by Central Government for the maintenance of the cost records under section148(1) of the Act in respect to the Company's products to which said rules are madeapplicable and are of the opinion that prima facie the prescribed records have been madeand maintained. We have however not made a detailed examination of the said records with aview to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company has generally been regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax goods and service tax custom duty cess and any other material statutory dueswith the appropriate authorities to the extent applicable and further there were noundisputed statutory dues payable for a period of more than six months from the date theybecome payable as at 31st March 2021.

(b) According to the records and information and explanations given to us there are nodues in respect of income tax sales tax service tax goods and service tax duty ofexcise duty of custom value added tax and entry tax that have not been deposited onaccount of any dispute except as given below:

name of the Statute nature of dues Forum where dispute is pending Period to which the Amount Relates Amount (Rs.in Lacs)
Sales Tax Act and VAT Sales Tax and Interest Additional Commissioner (Appeals) 2010-2014 10.28
Laws Deputy Commissioner/ Deputy Commissioner (Appeals) 1996-2017 2.44
Revision Board 2005-2006 14.57
Joint Commissioner 2011-2017 7.75
Tribunal 2005-2009 46.89
Central Excise Act 1944 Excise Duty Commissioner-GST and Custom 1995-2000 963.00
CESTAT 1981-2017 560.69
Custom Act 1962 Custom Duty High Court 2013-2014 1558.33
Jt. Commissioner Custom Delhi 2019-2020 690.17
Directorate of Revenue Intelligence 2019-2020 6069.55
Finance Act 1994 Service Tax Assistant Commissioner 2006-2017 104.32
CESTAT 2005-2017 4.12
Additional/Joint Commissioner (Audit) 2018-2020 13.42
Madhya Pradesh Entry Entry Tax Commissioner 2008-2011 108.76
Tax Act 1976
TNGST Act 2017 Goods and Service Tax Jt. Commissioner GST 2020-2021 32.22

viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loan

. orborrowingtoanybanksandfinancialinstitution The Company has not taken any loans orborrowings from the government or has not issued any debentures.

ix. According to the information and explanations given to us the Company has notraised money by way of initial public offer or further public offer (includinginstruments) during the year. The term loans have been applied for the purposes for whichthey were raised.

x. Based on the audit procedures performed and on the basis of information andexplanations provided by the management no instance of fraud by the Company or on theCompany by its noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related parties transactions havebeen disclosed in the standalone financial statements as required by the applicableAccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment of sharesor private placement of shares or fully/partly convertible debentures during the year interm of provisions of Section 42 of the Act.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable. or employees has been

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 as the provisions of the section is not applicable to the Company.

Annexure ‘B' to the Independent Auditor's Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of JK Tyre & Industries Limited ofeven date)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial to financial statements of JK TyRe &InDuSTRIeS LIMITeD

("the Company") as of 31st March 2021 in conjunction with our audit of thestandalone financial statements of the

Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct including adherence to respective Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to the Company based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial with reference controls withreference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the internal financial controls system with reference to financialstatements of the Company.

Meaning of Internal Financial Controls with reference to financial statements

A Company's internal financial control with reference ofitsbusiness to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactionsstatementsof are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to financial statements and such internal financial controls withreference to financial statements were effectivelyas at 31st March operating

2021 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S S KOThARI MehTA & COMPAny

Chartered Accountants

Firm's Registration Number: 000756N

Harish Gupta

Partner

Membership Number: 098336

New Delhi the 19th May 2021

.