We have audited the attached Balance Sheet of JK Tyre & Industries
 Limited, as at 31st March 2012, the Statement of Profit and Loss
 Account and also the Cash Flow Statement of the company for the year
 ended on that date annexed thereto.  These financial statements are the
 responsibility of the Company''s Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by Management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) (The Order) issued by the Central Government of India in terms
 of Section 227 (4A) of the Companies Act, 1956 (The Act), and on the
 basis of such checks of the books and records of the company as we
 considered appropriate and according to the information and
 explanations given to us during the course of audit, we enclose in the
 Annexure, a statement on the matters specified in the paragraphs 4 and
 5 of the said Order.
 
 2.  Further to our comments in the Annexure referred to in Paragraph 1
 above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of 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 the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Statement of Profit & Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow
 Statement dealt with by this report comply with the Accounting
 Standards referred to in Section 211 (3C) of the Companies Act, 1956;
 
 (e) As per the information and explanations given to us, none of the
 directors of the Company is disqualified from being appointed as a
 director under clause (g) of sub-section (1) of section 274 of the
 Companies Act, 1956.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the said accounts read together with
 Significant Accounting Policies and Notes thereon, give the information
 required by the Act in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i) In the case of Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2012;
 
 ii) In the case of Statement of Profit & Loss Account, of the Profit
 for the year ended on that date; and
 
 iii) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 Referred to in paragraph (1) of our Report of even date of JK TYRE &
 INDUSTRIES LIMITED for the year ended 31st March, 2012
 
 1.  (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 the programme of periodical verification in phased manner
 which in our opinion is reasonable having regard to the size of the
 Company and the nature of its fixed assets. The discrepancies noticed
 on such physical verification were not material.
 
 (c) As per the records and information and explanations given to us,
 fixed assets disposed off during the year were not substantial.
 
 2.  (a) The Inventory of the Company (except stock lying with third 
 parties and in transit, for which confirmations have been received / 
 materials received) has been verified by the Management at reasonable 
 intervals.
 
 (b) The procedures of physical verification of inventory followed by
 the Management are reasonable and adequate in relation to the size of
 the Company and nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on such physical verification of inventory as
 compared to book records were not material.
 
 3.  The Company has neither granted nor taken any loan, secured or
 unsecured to and from companies, firms or other parties as covered in
 the register maintained under section 301 of the Companies Act, 1956.
 Accordingly, the provisions of clause 4 (iii) (b) to (d), (f) & (g) of
 the Order are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. Based on the audit procedure performed and on the basis of
 information and explanations provided by the Management, during the
 course of our audit we have not observed any continuing failure to
 correct major weaknesses in internal control system.
 
 5.  According to the information and explanations provided by the
 Management and based upon audit procedures performed, we are of the
 opinion that the particulars of contracts or arrangements referred to
 in section 301 of the Act have been entered in the register required to
 be maintained under that section and the transactions made in pursuance
 of such contracts or arrangements (exceeding the value of five lacs
 rupees in respect of each party during the financial year) have been
 made at prices which are generally reasonable having regard to the
 prevailing market prices at the relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by the
 Reserve Bank of India and the provisions of Sections 58A and 58AA or
 any other relevant provisions of the Act and the rules framed
 thereunder with regard to deposits accepted from the public. According
 to the information and explanations given to us, no order has been
 passed by the Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal in this
 regard.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209(1) (d) of the Act in
 respect of the Company''s products to which the said rules are made
 applicable and are of the opinion that prima facie, the prescribed
 records have been made and maintained.  We have, however, not made a
 detailed examination of the said records with a view to determine
 whether they are accurate or complete.
 
 9.  (a) According to the records of the Company, the Company is
 generally regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employees''
 State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom
 duty, Excise duty, Cess and other material statutory dues with the
 appropriate authorities to the extent applicable and there are no
 undisputed statutory dues payable for a period of more than six months
 from the date they became payable as at 31st March, 2012.
 
 (b) According to the records and information & explanations given to
 us, there are no dues in respect of Income tax, Wealth tax and Cess
 that have not been deposited with the appropriate authorities on
 account of any dispute and the dues in respect of, Sales tax, Excise
 duty, Custom duty and Service tax that have not been deposited with the
 appropriate authorities on account of dispute and the forum where the
 dispute is pending are given below:
 
 Name of the      Nature of        Amount       Forum where dispute
 Statute          the dues      (Rs. in Lacs)   is pending
 
 Sales Tax Act    Sales Tax         283.53      Deputy Commissioner/
                                                Deputy Commissioner
                                                (Appeals)
 
                                      0.51      Additional 
                                                Commissioner
                           
                                      0.69      Tribunal
 
                                      0.96      Joint Commissioner
  
                                      1.80      High Court
 
 Central Excise  Excise Duty         56.53      Commissioner(Appeals)
 Act
                                     99.81      Additional Commissioner
 
                                    182.47      CESTAT
 
                                     19.68      Supreme Court
 
 Custom Act      Custom Duty        241.15      Supreme Court
 
 Finance Act     Service Tax         28.71      Commissioner (Appeals)
 
                                     75.62      Deputy Commissioner
 
                                     32.51      CESTAT
 
 The Rajasthan   Entry Tax           49.00      High Court
 Tax on Entry 
 of Goods into 
 Local Area Act,
 1999
 
 10.  The Company does not have accumulated losses at the end of the
 financial year and has not incurred cash losses in the current
 financial year and in the immediately preceding financial year.
 
 11.  In our opinion, on the basis of audit procedures and according to
 the information and explanations given to us, the company has not
 defaulted in repayment of dues to financial institutions or banks or
 debenture holders.
 
 12.  According to the information and explanations given to us, the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 13.  The Company is not a chit fund or a nidhi / mutual benefit fund /
 society, therefore, the provisions of clause 4 (xiii) of the said Order
 are not applicable to the Company.
 
 14.  In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 Company does not have any guarantee outstanding for loans taken by
 others from bank and financial institutions.
 
 16.  In our opinion, on the basis of information and explanations given
 to us, the term loans were applied for the purposes for which the loans
 were obtained.
 
 17.  On the basis of information and explanations given to us and on an
 overall examination of the financial statements of the Company, no
 funds raised on short-term basis have been used for long-term
 investment.
 
 18.  According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year to any parties or companies covered in the Register maintained
 under section 301 of the Companies Act 1956.
 
 19.  On the basis of records made available to us and according to the
 information and explanations given to us, the Company has created
 securities for debentures as stated in item no. 1 of Note 4. The
 Company has no outstanding debentures as at the year end.
 
 20.  The company has not raised any money by way of public issue during
 the year.
 
 21.  Based on the audit procedure performed and on the basis of
 information and explanations provided by the Management, no fraud on or
 by the Company has been noticed or reported during the course of the
 audit.
 
 
                                                      For LODHA & CO.  
 
                                                Chartered Accountants
 
 
                                                           N.K. LODHA
 
                                                              Partner
 
                                        Firm Registration No. 301051E
 
                                                 Membership No. 85155
 
 New Delhi, the 15th May, 2012