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JTEKT India Ltd.

BSE: 520057 Sector: Auto
NSE: JTEKTINDIA ISIN Code: INE643A01035
BSE 00:00 | 16 Oct 120.00 7.90
(7.05%)
OPEN

113.40

HIGH

121.50

LOW

113.20

NSE 00:00 | 16 Oct 119.70 7.90
(7.07%)
OPEN

111.10

HIGH

121.70

LOW

111.10

OPEN 113.40
PREVIOUS CLOSE 112.10
VOLUME 43958
52-Week high 146.45
52-Week low 86.10
P/E 57.42
Mkt Cap.(Rs cr) 2,384
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 113.40
CLOSE 112.10
VOLUME 43958
52-Week high 146.45
52-Week low 86.10
P/E 57.42
Mkt Cap.(Rs cr) 2,384
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JTEKT India Ltd. (JTEKTINDIA) - Auditors Report

Company auditors report

TO THE MEMBERS OF JTEKT INDIA LIMITED 3‘FORMERLY KNOWN AS SONAKOYO STEERING SYSTEMS LIMITED'3

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statementsof JTEKT India Limited (‘formerly known as Sona Koyo Steering Systems Limited)("the Company") which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss the Statement of Changes in Equity and the Statement of CashFlows for the year then ended and summary of the significant accounting policies andother explanatory information (hereinafter referred to as "Standalone Ind ASFinancial Statements").

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Standalone Ind AS Financial Statements that give a true and fairview of the state of Affairs profit (including other comprehensive income) changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and 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 Ind AS Financial Statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the Standalone Ind AS Financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind ASFinancial Statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS Financial Statements inaccordance 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 theaudit to obtain reasonable assurance about whether the Standalone Ind AS FinancialStatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the Standalone Ind AS Financial

Statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the StandaloneInd AS Financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany's preparation of the Standalone Ind AS Financial Statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the StandaloneInd AS Financial Statements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the entity's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in the auditor's report to the related disclosures in the Standalone Ind ASFinancial Statements or if such disclosures are inadequate to modify the opinion. Ourconclusions are based on the audit evidence obtained up to the date of the auditor'sreport. However future events or conditions may cause an entity to cease to continue as agoing concern.

We believe that the audit evidence we have obtained is su3cient andappropriate to provide a basis for our audit opinion on the Standalone Ind AS FinancialStatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofAffairs of the Company as at 31 March 2018 and its profits (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended31 March 2017 and the transition date opening balance sheet as at 01 April 2016 includedin these Standalone Ind AS Financial Statements are based on the previously issuedStatutory Financial Statements prepared in accordance with the Companies (AccountingStandards) Rules 2006 audited by the predecessor auditor whose report for the year ended31 March 2017 and 31 March 2016 dated 24 May 2017 and 13 May 2016 respectively expressedan unmodified opinion on those Standalone Financial Statements as adjusted for thedi3erences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by us.

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 2016(‘the Order') issued by the Central Government of India in terms of subsection(11) of Section 143 of the Act we give in "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 we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books; c) The Balance Sheet the Statement of Profitand Loss the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account; d) In our opinion the aforesaidStandalone Ind AS Financial Statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Act; e) On the basis of the written representationsreceived from the directors as on 31 March 2018 taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2018 from being appointed as adirector in terms of Section 164 (2) of the Act; f ) With respect to the adequacy of theinternal financial controls with reference to Standalone Ind AS Financial Statements ofthe Company and the operating effectiveness of such controls refer to our separate Reportin "Annexure B"; and g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Ind AS Financial Statements - Refer Note 38 to theStandalone Ind AS Financial Statements; ii. The Company has made provisions as requiredunder the applicable law or accounting standards for material foreseeable losses if anyas required on long term contracts including derivative contracts-Refer Note 47 to theStandalone Ind AS Financial Statements; iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany; and iv. The disclosures in the Standalone Ind AS Financial

Statements regarding holdings as well as dealings in specified banknotes during the period from 8 November 2016 to 30 December 2016 have not been made sincethey do not pertain to the financial year ended 31 March 2018. However amounts asappearing in the audited Standalone Financial Statements for the year ended 31 March 2017have been disclosed.

- Refer Note 11 to the Standalone Ind AS Financial Statements.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm registration number: 101248W / W-100022
Shashank Agarwal
Place: Gurugram Partner
Date: 18 May 2018 Membership number: 095109

ANNEXURE A REFERRED TO IN OUR INDEPENDENT AUDITOR'S REPORT TO THEMEMBERS OF JTEKT INDIA LIMITED 3‘FORMERLY KNOWN AS SONA KOYO STEERING SYSTEMSLIMITED3 ON THE STANDALONE IND AS FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

(i) (a) According to the information and explanations given to us theCompany has maintained proper records showing full particulars including quantitativedetails and situation of fixed assets (property plant and equipment).

(b) According to the information and explanations given to us theCompany has a regular programme of physical verification of its property plant andequipment by which all fixed assets (property plant and equipment) are verified in aphased manner over a period of three years. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. In accordance with this programme certain assets have been physically verified bythe management during the current year. As informed to us no material discrepancies werenoticed on such verification. (c) According to the information and explanations given tous and on the basis of our examination of the records of the Company the title deeds ofthe immovable property is held in the name of the Company except for:

Land situation Whether leasehold / freehold Gross block as at 31 March 2018 Net block as at 31 March 2018 (INR Remarks
(INR In In Lakhs)
Lakhs)
Haryana Freehold 72.83 72.83 The deed of conveyance is in the erstwhile name of the subsidiary company which had amalgamated with the Company and the mutation of name is pending

(ii) According to the information and explanations given to us theinventories except good-in-transit and stock lying with third parties have beenphysically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable having regard to the size of theCompany and nature of its business. For stocks lying with third parties as at theyear-end written confirmation have been obtained. As informed to us the discrepanciesnoticed on comparison of physical verification of inventories with book records were notmaterial and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to Companies Firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3 (iii) of the Order is not applicable.

(iv) According to the information and explanations given to us theCompany has not given any loans made investments given guarantees or security during theyear which is covered under the provisions of Section 185 and 186 of the Act. Accordinglyparagraph 3 (iv) of the Order is not applicable.

(v) As per the information and explanations given to us the Companyhas not accepted any deposits as mentioned in the directives issued by the Reserve Bank ofIndia and the provisions of Section 73 to 76 or any other relevant provisions of the Actand the rules framed there under. Accordingly para 3(v) of the Order is not applicable.(vi) According to the information and explanations given to us the Central Government hasnot prescribed the maintenance of cost records under sub-section (1) of section 148 of theAct for the goods manufactured by the Company.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including Provident fundEmployees' State Insurance Income-tax Sales-tax Goods and Services Tax(‘GST') Service tax Duty of customs Duty of excise Value added tax Cess andother material statutory dues have generally been regularly deposited during the year bythe Company with the appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' State InsuranceIncome-tax Sales-tax GST Service tax Duty of customs Duty of excise Value added taxCess and other material statutory dues were in arrears as at 31 March 2018 for a period ofmore than six months from the date they became payable.

(b) According to the information and explanations given to us thereare no dues of Sales tax Duty of customs and Value added tax which have not beendeposited on account of any dispute. According to the information and explanations givento us the following dues of Income-tax Service tax and Duty of excise have not beendeposited with the appropriate authorities on account of any dispute except for thefollowing:

Name of the Statute Nature of dues Financial year to which amount relates Forum where dispute is pending Amount (INR in Lacs) Amount paid under protest (INR in Lacs)
The Finance Act 1994 Service Tax 2009-10 Commissioner of Appeals (Service Tax) 6.96 -
The Finance Act 1994 Service Tax 2014-15 to 2015-16 Commissioner of Appeals (Service Tax) 1.77 0.06
Central Excise Act 1944 Excise Duty 2007-08 & 2008-09 Commissioner of Appeals (Central Excise) 4.97 -
Central Excise Act 1944 Excise Duty 2008-09 CESTAT Chennai (Central Excise) 110.90 2.36
Central Excise Act 1944 Excise Duty 2007-08 to 2011-12 CESTAT New Delhi (Central Excise) 349.38 8.36
Income Tax Act 1961 Disallowance under Section 14A 2014-15 Commissioner of Appeals (Income Tax) 49.91 49.91

(viii) According to the information and explanations given to us thereis no default existing at the balance sheet date in repayment of loans or borrowings tobanks. The Company did not have any outstanding debentures or loans or borrowings fromany financial institution or government during the year.

(ix) The Company did not raise any money by way of initial public o3eror further public o3er (including debt instruments) during the year. Based on our auditprocedures and according to information and explanations given by the management the termloans were applied for the purpose for which they were obtained.

(x) According to the information and explanations given to us nomaterial fraud by the Company and neither any material fraud on the Company by itsOfficers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the managerial remunerationhas been paid or provided by the Company in accordance with the provisions of Section 197read with Schedule V of the Act.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanation given to us and onthe basis of our examination of the records of the Company all the transactions withrelated parties are in compliance with the provisions of Section 177 and 188 of the Actwhere applicable and details of such transactions have been disclosed in the StandaloneInd AS Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanation given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable.(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or person connected with him asreferred to in Section 192 of the Companies Act 2013. Accordingly paragraph 3 (xv) ofthe Order is not applicable.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm registration number: 101248W / W-100022
Shashank Agarwal
Place: Gurugram Partner
Date: 18 May 2018 Membership number: 095109

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF JTEKT INDIA LIMITED 3‘FORMERLY KNOWN ASSONA KOYO STEERING SYSTEMS LIMITED3

Report on the Internal Financial Controls under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialstatements of JTEKT India Limited (‘formerly known as Sona Koyo Steering SystemsLimited) ("the Company") as of 31 March 2018 in conjunction with our audit ofthe Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over 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 (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and e3cient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial statements based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI.

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial statements and theiroperating effectiveness. Our audit of internal financial controls over financialstatements included obtaining an understanding of internal financial controls overfinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the Standalone Ind AS FinancialStatements whether due to fraud or error.

We believe that the audit evidence we have obtained is su3cient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial statements.

Meaning of Internal Financial Controls Over Financial Statements

A company's internal financial control over financial statements is aprocess designed to provide reasonable assurance regarding the reliability of FinancialStatements and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial statements includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of FinancialStatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialStatements

Because of the inherent limitations of internal financial controls overfinancial 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 overfinancial statements to future periods are subject to the risk that the internal financialcontrol over financial statements may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial statements and such internal financialcontrols over financial statements were operating effectively as at 31 March 2018 basedon the internal control over financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248W / W-100022
Shashank Agarwal
Place: Gurugram Partner
Date: 18 May 2018 Membership number: 095109