To the Members
JKTyre & Industries Limited
Report on the standalone Financial Statements
We have audited the accompanying Standalone financial statements of JK Tyre &Industries Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including Other Comprehensive Income) CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred toas"Standalone Financial Statements").
Management's Responsibility for the standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income and cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with relevant rules issued thereunder.
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; the selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonableandprudenfiand design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to US the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the financial position of theCompany as at March 31 2018 and its financial performance including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.
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 Section 143(11) of the Act wegiveinthe'Annexure A"a statement on the matters specified in paragraphs 3 and 4 of theorder.
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 bestof 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 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 the statement of cash flow and statement of changes in equity dealt with by thisreport are in agreement with the books of accounts;
(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;
(e) On the basis of written representations received from the directors as on March 312018 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2018 from being appointed as a director in terms of section 164(2) of theAct;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in'Annexure B"; and
(g) 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 in our opinionand 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 financialposition in its standalone financial statements - Refer Note 33 36 & 38 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 be transferred tothe Investor Education and Protection Fund by the Company.
For s. s. KOTHARI MEHTA & CO.
Firm's Registration Number: 000756N
Membership Number: 098336
New Delhi the 17th May 2018
Annexure A to the Independent Auditor's Report
The Annexure as referred in paragraph (1 T'Report on Other Legal and RegulatoryRequirements" of our Independent Auditors'Report to the members of JKTyre &Industries Limited on the standalone financial statements for the year ended March312018 we report that:
i. (a) The Company has maintained proper records showing full
particulars including quantitative 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 is reasonablehaving regard to the size of the Company and the nature of its fixed assets. According tothe information and explanations given to US no material discrepancies were noticed onsuch 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 bythe managementthatthe inventory (except stock lying withthe third parties and in transit for which confirmations have been received/ materialreceived) has been physically verified at reasonable intervals and the procedures ofphysical verification of inventory followed by the management are reasonable in relationto the size of the Company and nature of its business. According to information andexplanations 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 Act2013 ("the Act"). However Outstanding year- end balance of deferred receivablefrom a company is Rs. 66.19 crores related to past year transaction under the CompaniesAct 1956 and:
(a) Terms and conditions of such transaction are not prejudicial to the interest of theCompany.
(b) In respect of aforesaid receivable receipts of principal 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 ofsection 185 a nd 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 to 76 of the Act or any other relevant provisions of the Act andthe rules framed there under with regard to deposits accepted from the public. We havebeen informed that no order has been passed by the Company Law Board or National CompanyLawTribunal or Reserve Bank of India or any Court or otherTribunal 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 of examination of the records of the Company the Company hasgenerally been regular in depositing undisputed statutory dues including provident fundemployees' state insurance sales-tax income tax service tax goods and service taxcustom duty excise duty value added tax entry tax cess and any other materialstatutory dues with the appropriate authorities to the extent applicable and further therewere no undisputed statutory dues payable for a period of more than six months from thedate they become payable as atMarch 312018.
(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 the dues ||Forum where dispute is pending ||Years ||Amount ( Rs. in Lacs) |
|SalesTax Act ||Sales Tax ||Additional Commissioner (Appeals) ||2010-2014 ||10.28 |
| || ||Deputy Commissioner/ Deputy |
|1996-2017 ||2452.79 |
| || ||Revision Board ||2005-2006 ||14.57 |
| || ||Joint Commissioner ||2011-2017 ||8.87 |
| || ||Tribunal ||2005-2009 ||46.89 |
| || ||High Court ||1980-1982 ||1.80 |
| || ||Appellate Tribunal ||2006-2017 ||3.41 |
|Central Excise Act ||Excise Duty ||Commissioner-Appeals ||1996-2013 ||84.80 |
| || ||Additional Commissioner ||2004-2010 ||52.34 |
| || ||CESTAT ||1981-2010 ||312.28 |
|Custom Act ||Custom Duty ||Supreme Court ||2012-2013 ||241.15 |
| || ||High Court ||2013-2014 ||1558.33 |
|Income Tax Act ||Income Tax ||Deputy Commissioner ||2013-2015 ||1563.98 |
|Finance Act ||Service Tax ||Assistant Commissioner ||2006-2016 ||358.23 |
| || ||CESTAT ||2005-2017 ||56.19 |
|Madhya Pradesh Entry Tax Act 1976 ||Entry Tax ||Commissioner ||2008-2011 ||139.51 |
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 orborrowing to any banks government (both Central and State) and financial institutions.The company did not have any outstanding debentures during the year.
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 (including debtinstruments) 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 officers or employees has been noticed or reported during the year.
xi. According to the information and explanations given to US and based on ourexamination of the records of the Company and as described in Note No 47 (II) of thestandalone financial statement we report that managerial remuneration for the year endedMarch 312018 is in excess of the limit applicable under Section 197 read withschedule)/of the Act for which requisite approval is yet to be taken.
xii. The Company is not a Nidhi Company and hence reporting underclause3(xii)oftheOrder 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 explanation given to US the Company has not madeany preferential allotment of shares or private placement of shares or fully / partlyconvertible debentures during the year in terms 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.
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.
For s. s. KOTHARI MEHTA & CO.
Firm's Registration Number: 000756N
Membership Number: 098336
New Delhi the 17th May 2018
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f)of'Report on other Legal and Regulatory Requirements'section
We have audited the internal financial controls over financial reporting of JKTyre& Industries Limited ("the Company") as of March 31 2018 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For s. s. KOTHARI MEHTA & CO.
Chartered Accountants Firm's Registration Number: 000756N
Membership Number: 098336
New Delhi the 17th May 2018