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JTEKT India Ltd.

BSE: 520057 Sector: Auto
NSE: JTEKTINDIA ISIN Code: INE643A01035
BSE 00:00 | 24 Sep 106.50 -3.75
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NSE 00:00 | 24 Sep 106.60 -3.80
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OPEN 112.00
PREVIOUS CLOSE 110.25
VOLUME 11809
52-Week high 132.75
52-Week low 72.00
P/E 54.90
Mkt Cap.(Rs cr) 2,604
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 112.00
CLOSE 110.25
VOLUME 11809
52-Week high 132.75
52-Week low 72.00
P/E 54.90
Mkt Cap.(Rs cr) 2,604
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

(‘formerly known as Sona Koyo Steering Systems Limited’) Report on the Auditof the Standalone Financial Statements

1. Opinion

We have audited the Standalone Financial Statements of JTEKT India Limited(‘formerly known as Sona Koyo Steering Systems Limited’) ("theCompany") which comprise the Standalone Balance Sheet as at 31 March 2021 and theStandalone Statement of Profit and Loss (including Other Comprehensive Income) StandaloneStatement of Changes in Equity and Standalone Statement of Cash Flows for the year thenended and notes to the Standalone Financial Statements including a summary of thesignificant accounting policies and other explanatory information (together referred to as"Standalone Financial Statements"). In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid StandaloneFinancial Statements give the information required by the Companies Act 2013("Act") in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the State of Affairs of theCompany as at 31 March 2021 and Profit and Other Comprehensive Income Changes in Equityand its Cash Flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditors’ Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the StandaloneFinancial Statements.

3. Key Audit Matters

Key audit matters are those matters that in our professional judgment were ofmost significance in our audit of the Standalone Financial Statements of the currentperiod. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matter - Revenue Recognition See note 2.3 (h) to theStandalone Financial statements

The key audit matter How the matter was addressed in our audit
As disclosed in Note 23 and 24 to the Standalone Financial Statements the Company’s revenue for the year ended 31 March 2021 was INR 135798.25 Lakhs (Previous year INR 154189.26 Lakhs). Our audit procedures included:
Revenue is recognized in accordance with accounting policies as detailed in "Significant accounting policies" in the Standalone Financial Statements. - Assessed the appropriateness of the accounting policy for revenue recognition as per the relevant accounting standard;
Revenue is significant to the Standalone Statement of Profit and Loss and is one of key performance indicators of the Company. - Evaluated the design and implementation and operating effectiveness of key internal financial controls in relation to recognition of revenue;
There may be misstatements related to revenue recognition due to which the completeness existence and accuracy of revenue recognition is identified as a key audit matter. - Involved our internal specialists for testing of key IT system controls relating to revenue recognition;
- Performed substantive testing by selecting samples and verifying the underlying documents for their inclusion in the appropriate period; and
- Assessed the adequacy of the disclosures made in accordance with the relevant accounting standard.

4. Other Information

The Company’s management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report but does not include the Standalone Financial Statements andour auditors’ report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

5. Management’s and Board of Directors’ Responsibility for theStandalone Financial Statements

The Company’s Management and Board of Directors are responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the State of Affairs of the Companyas at 31 March 2021 and Profit and Other Comprehensive Income Changes in Equity and CashFlows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under Section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 accuracy and completenessof the 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 FinancialStatements the Management and Board of Directors are responsible for assessing theCompany’s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless the Boardof Directors either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financialreporting process.

6. Auditors’ Responsibilities for the Audit of the Standalone FinancialStatements Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic 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 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 control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the standalone financial statements madeby the Management and Board of Directors.

Conclude on the appropriateness of the Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor’sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors’ report. However future events orconditions may cause the Company to cease to continue 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.

We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our 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 communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors’ report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

7. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143 (11) of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. (A) 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 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss (includingOther Comprehensive Income) the Standalone Statement of Changes in Equity and theStandalone Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 controls with reference toStandalone

Financial Statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors’ Report inaccordance with Rule 11 of the Companies (Audit and Auditors’) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its Standalone Financial Statements - Refer Note 37B to theStandalone Financial Statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. The disclosures in the Standalone Financial Statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these Standalone Financial Statements since they do not pertainto the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors’ Report underSection 197(16): In our opinion and according to the information and explanations given tous the remuneration paid during the current year by the Company to its directors is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector by the Company is not in excess of the limit laid down under Section 197 of theAct. The Ministry of Corporate Affairs has not prescribed other details under Section197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm’s Registration No. :101248W/W-100022
Shashank Agarwal
Partner
Place: Gurugram Membership No. :095109
Date : 26 May 2021 ICAI UDIN: 21095109AAAADQ1332

Annexure A referred to in our Independent Auditors’ Report to the members of JTEKTIndia Limited (‘formerly known as Sona Koyo Steering Systems Limited’) on theStandalone Financial Statements for the year ended 31 March 2021.

We report that:

(i) (a) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets.

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its fixed assets by which all fixed assets(except plant and machinery) are verified every year and plant and machinery are verifiedtwice a year. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. In accordance withthis programme plant and machinery and all other category of fixed assets have beenphysically verified by the management during the year. As informed to us no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable property isheld in the name of the Company except for:

Situation of immovable property Nature of immovable property Gross block as at 31 March 2021 (INR In Lakhs) Net block as at 31 March 2021 (INR In Lakhs) Remarks
Haryana Freehold Land 1120.69 1120.69
Haryana Building 2457.63 1928.36 The deed of conveyance is in the name of the erstwhile JTEKT Sona Automotive India Limited erstwhile an associate company which had amalgamated with the Company during the financial year ended 31 March 2019 (refer note 3A). Accordingly the process of mutation of name is pending as at 31 March 2021.
Gujarat Land -* -* The title deed for the aforesaid land is in the erstwhile name of the Company i.e. ‘Sona Steering Systems Limited’. The Company is in the process of getting the name changed to JTEKT India Limited which is pending as at 31 March 2021.

* the Gross block and Net block as at 31 March 2021 of the said Land is INR 1/-

(ii) According to the information and explanations given to us the inventories exceptgood-in-transit and stock lying with third parties have been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable having regard to the size of the Company and nature of itsbusiness. For stocks lying with third parties as at the year-end written confirmationhave been obtained. As informed to us the discrepancies noticed on comparison of physicalverification of inventories with book records were not material and have been properlydealt with in the books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013 (‘the Act’). Accordingly paragraph 3 (iii) of the Order isnot applicable.

(iv) According to information and explanations given to us and on the basis of ourexamination of records we are of the opinion that the Company has complied with theprovisions of section 185 and 186 of the Act in respect of investments made by theCompany. There are no loans guarantees and securities provided by the Company asspecified under Section 185 and 186 of the Act.

(v) As per the information and explanations given to us the Company has not acceptedany deposits as mentioned in the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly para 3(v) of the Order is not applicable.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of Section 148 ofthe Act for the goods manufactured by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees’State Insurance Income-tax Goods and Services Tax (‘GST’) Duty of customsCess and other material statutory dues have generally been regularly deposited during theyear by the Company with the appropriate authorities.

The Company does not have liability in respect of Service tax Duty of Excise Salestax and Value Added Tax during the year since effective 1 July 2017 these statutory dueshave been subsumed into GST.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees’ State Insurance Income-tax GSTService tax Duty of excise Sales tax Value added tax Duty of customs and othermaterial statutory dues were in arrears as at 31 March 2021 for a period of more than sixmonths from the date they became payable.

Also refer note 37B wherein it is explained that on account of the uncertainty withrespect to the applicability of the Hon’ble Supreme Court Judgement on the providentfund matter management has not recognized and deposited any additional provident fundamount with respect to the previous years ended 31 March 2019.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Value added tax Goods and services tax Duty ofcustoms and Duty of excise which have not been deposited with the appropriate authoritieson account of any dispute except for the following:

Name of the Statute Nature of dues Financial year to which amount relates Forum where dispute is pending Amount (INR in Lakhs) Amount paid under protest (INR in Lakhs)
The Finance Act 1994 Service Tax 2009-10 Commissioner of Appeals (Service Tax) 8.06 -
Central Excise Act 1944 Excise Duty 2007-08 & 2008-09 Commissioner of Appeals (Central Excise) 5.75 -
Central Excise Act 1944 Excise Duty 2008-09 CESTAT Chennai (Central Excise) 127.92 3.15
Central Excise Act 1944 Excise Duty 2007-08 to 2011-12 CESTAT New Delhi (Central Excise) 409.66 8.36
Central Excise Act 1944 Excise Duty 2010-11 Commissioner of Appeals (Central Excise) 0.50 -
Central Excise Act 1944 Excise Duty 2012-13 to 2015-16 CESTAT Chandigarh (Central Excise) 214.89 8.19
Income Tax Act 1961 Disallowance under Section 14A 2015-16 Commissioner of Appeals (Income Tax) 44.78 4.61
Income Tax Act 1961 Interest under section 234 2017-18 Commissioner of Appeals (Income Tax) 8.81 -
Income Tax Act 1961 Claim of deduction under Section 80I 1991-92 to 1994-95 Supreme Court 126.85 -
1999-2000

(viii) According to the information and explanations given to us there is no defaultexisting at the balance sheet date in repayment of loans or borrowings to banks andfinancial institutions. The Company did not have any outstanding debentures or loans orborrowings from government during the year.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Based on our audit proceduresand according to information and explanations given by the management the term loans wereapplied for the purpose for which they were obtained.

(x) According to the information and explanations given to us no material fraud by theCompany and neither any material fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the managerial remuneration has been paid orprovided by the Company in accordance with the provisions of Section 197 read withSchedule V of the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company all the transactions with related parties arein compliance with the provisions of Section 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the Standalone Financial Statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe 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 the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3 (xvi) of the Order is not applicable.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm’s Registration No. :101248W/W-100022
Shashank Agarwal
Partner
Place: Gurugram Membership No. :095109
Date : 26 May 2021 ICAI UDIN: 21095109AAAADQ1332

Annexure B to the Independent Auditors’ Report on the Standalone FinancialStatements of JTEKT India Limited (‘formerly known as Sona Koyo Steering SystemsLimited’) for the period ended 31 March 2021.

Report on the internal financial controls with reference to the aforesaid StandaloneFinancial Statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph (7 (2)(A)(f)) under ‘Report on Other Legal andRegulatory Requirements’ section of our report of even date) Opinion

We have audited the internal financial controls with reference to Standalone FinancialStatements of JTEKT India Limited (‘formerly known as Sona Koyo Steering SystemsLimited’) ("the Company") as of 31 March 2021 in conjunction with our auditof the Standalone Financial Statements of the Company for the year ended on that date. Inour opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 controlswith reference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company’s internal financial controls with reference to financial statements isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financialcontrols with reference to financial statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the standalone 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 Standalone Financial Statements to future periods are subject to the riskthat the internal financial controls with reference to Standalone Financial Statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm’s Registration No. :101248W/W-100022
Shashank Agarwal
Partner
Place: Gurugram Membership No. :095109
Date: 26 May 2021 ICAI UDIN: 21095109AAAADQ1332

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