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Kennametal India Ltd.

BSE: 505890 Sector: Engineering
NSE: WIDIA ISIN Code: INE717A01029
BSE LIVE 15:40 | 15 Dec 809.35 24.65
(3.14%)
OPEN

794.95

HIGH

824.00

LOW

784.15

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 794.95
PREVIOUS CLOSE 784.70
VOLUME 15641
52-Week high 824.00
52-Week low 555.00
P/E 61.83
Mkt Cap.(Rs cr) 1,779
Buy Price 0.00
Buy Qty 0.00
Sell Price 805.00
Sell Qty 10.00
OPEN 794.95
CLOSE 784.70
VOLUME 15641
52-Week high 824.00
52-Week low 555.00
P/E 61.83
Mkt Cap.(Rs cr) 1,779
Buy Price 0.00
Buy Qty 0.00
Sell Price 805.00
Sell Qty 10.00

Kennametal India Ltd. (WIDIA) - Auditors Report

Company auditors report

TOTHE MEMBERS OF KENNAMETAL INDIA LIMITED

Report on the Financial Statements

1. We have audited the accompanyingfinancial statements of Kennametal India Limited(“the Company”) which comprise the Balance Sheet as at June 30 2017 theStatement of Pro t and Loss and the Cash Flow Statement for the year then ended and asummary of the signficant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 (“the Act”) with respect to thepreparation of thesefinancial statements to give a true and fair view of thefinancialpositionfinancial performance and cash ows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecfied under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. 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 adequateinternalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on thesefinancial statements based onour audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.

5. We conducted our audit in accordance with the Standards on Auditing specfied underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India (ICAI). Those Standards and pronouncementsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether thefinancial statements are free from materialmisstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in thefinancial statements.The procedures selected depend on theauditors’ judgment including the assessment of the risks of material misstatement ofthefinancial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internalfinancial control relevant to the Company’s preparationof thefinancial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on the effectiveness of the Company’s internal control. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of thefinancial statements.

7. We believe that the audit evidence we have obtained is suf cient and appropriate toprovide a basis for our audit opinion on thefinancial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the afore saidfinancial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at June30 2017 and its pro t and its cash ows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by‘the Companies (Auditor’s Report) Order 2016’ issuedby the Central Government of India in terms of sub-section (11) of Section 143 of the Act(hereinafter referred to as the “Order”) and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B a statement on thematters specfied in paragraphs 3 and 4 of the Order.

10. As required by Section 143(3) of theAct 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 Pro t and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaidfinancial statements comply with the AccountingStandards specfied under 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 June30 2017 taken on record by the Board of Directors none of the directors is disqualfiedas on June 30 2017 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internalfinancial controls overfinancialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

(g) 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 our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact of pending litigations as at June 30 2017onitsfinancial position in itsfinancial statements Refer Notes 6 and 28;

ii. The Company has long-term contracts as at June 30 2017 for which there were nomaterial foreseeable losses. The Company did not have any derivative contracts as at June30 2017.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended June 30 2017.

iv. The Company has provided requisite disclosures in thefinancial statements as toholdings as well as dealings in Specfied Bank Notes during the period from November 82016 to December 30 2016. Based on audit procedures and relying on Managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by Management Refer Note 46.

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Shivakumar Hegde
Bengaluru Partner
August 24 2017 Membership Number:204627

Annexure A to Independent Auditors’ Report

Referred to in paragraph 10(f) of the IndependentAuditors’ Report of even date tothe members of Kennametal India Limited on thefinancial statements for the year ended June30 2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internalfinancial controls overfinancial reporting of KennametalIndia Limited (“the Company”) as of June 30 2017 in conjunction with our auditof thefinancial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s Management is responsible for establishing and maintaininginternalfinancial controls based on the internal control overfinancial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the“Guidance Note”)issued by the ICAI. These responsibilities include thedesign implementation and maintenance of adequate internalfinancial controls that wereoperating effectively for ensuring the orderly and ef cient conduct of its businessincluding adherence to company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliablefinancial information asrequired under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company's internalfinancialcontrols overfinancial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing deemed to be prescribed under section143(10) of theAct to the extent applicable to an audit of internalfinancial controls bothapplicable to an audit of internalfinancial controls and both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequateinternalfinancial controls overfinancial reporting was established and maintained and ifsuch controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internalfinancial controls system overfinancial reporting and their operatingeffectiveness. Our audit of internalfinancial controls overfinancial reporting includedobtaining an understanding of internalfinancial controls overfinancial 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 thefinancial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is suf cient and appropriate toprovide a basis for our audit opinion on the Company’s internalfinancial controlssystem overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internalfinancial control overfinancial reporting is a process designedto provide reasonable assurance regarding the reliability offinancial reporting and thepreparation offinancial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internalfinancial control overfinancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly re ect the transactions anddispositions of the assets of the company; (2)provide reasonable assurance thattransactions are recorded as necessary to permit preparation offinancial 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 ordisposition of thecompany's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internalfinancial controls overfinancialreporting 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 internalfinancial controls overfinancialreporting to future periods are subject to the risk that the internalfinancial controloverfinancial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequateinternalfinancial controls system overfinancial reporting and such internalfinancialcontrols overfinancial reporting were operating effectively as at June 30 2017 based onthe internal control overfinancial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Shivakumar Hegde
Bengaluru Partner
August 24 2017 Membership Number:204627

Annexure B to Independent Auditors’ Report

Referred to in paragraph 9 of the Independent Auditors’ Report of even date to themembers of Kennametal India Limited on thefinancial statements as of and for the yearended June 30 2017

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of xed assets.

(b) The xed assets are physically verfied by Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the xed assets has been physically verfiedby the Management during the year and no material discrepancies have been noticed on suchverfication.

(c) The title deeds of immovable properties as disclosed in Note 10 on xed assets tothefinancial statements are held in the name of the Company.

ii. Except for inventory lying with third parties the other inventory has beenphysically verfied by the Management during the year. The discrepancies noticed onphysical verfication of inventory as compared to book records were not material.

iii. The Company has not grantedany loans secured or unsecured to companies rmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of theAct.Therefore the provisions of Clause 3(iii)(a) (iii)(b) and (iii)(c)of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Act in respect of the loansgiven. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 of theAct.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotfied.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specfied under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees’ state insuranceincome tax sales tax service tax duty of customs duty of excise value added tax cessand other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax service taxduty of customs duty of excise value added tax and cess as at June 30 2017 which havenot been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount ( ) Period to which the amount relates Forum where the dispute is pending
The Central Excise Act 1944 Excise duty/ Service tax 52450 January 1998 to September 2011 The Customs Excise & service Tax Appellate Tribunal (CESTAT) Bangalore
4610113 (*1) April 2006 to June 2013 CESTAT Bangalore
The Finance Act 1994 Service tax 576157 (*2) April 2007 to March 2008 CESTAT Bangalore
The Andhra Pradesh General Sales Tax Act 1957 Sales tax 5827114 (*3) April 2003 to March 2004 The Sales Tax Appellate Tribunal Hyderabad
The DelhfiSales Tax Act 1975 Sales tax 78550 (*4) April 2004 to March 2005 The Joint Commissioner (Appeals) of Special Zone Department of Trade and Taxes Government Delhi
The Karnataka Tax on Entry of Goods Act 1979 Entry tax Nil (*5) April 2010 to June 2017 The Commissioner of Commercial Tax Bangalore
The Uttar Pradesh Value Added Tax Act 2008 Sales tax Nil (*6) May 2011 The Joint Commissioner (Appeals) of Sales Tax Sonabhadhra Uttar Pradesh
The Central Sales Tax Act 1956 Sales tax 3689314 (*7) April 2010 to March 2011 The Assistant Commissioner of Commercial Tax Bangalore
Nil (*8) April 2011 to March 2012 The Assistant Commissioner of Commercial Tax Bangalore
Nil (*9) April 2012 to March 2013 The Joint Commissioner of Commercial Tax (Appeals) Bangalore
Nil(*10) April 2013 to March 2014 The Assistant Commissioner of Commercial Tax Bangalore
41899707 (*11) April 2014 to March 2015 The Joint Commissioner of Commercial Tax (Appeals) Bangalore
The Income Tax Act 1961 Income tax 2198066 April 1999 to March 2001 The Supreme Court of India
Nil (*12) April 1993 to March 1994 The Income Tax Apellate Tribunal Bangalore
Nil (*13) April 1999 to March 2001 The Commissioner of Income Tax (Appeals) Bangalore
Nil (*14) April 2007 to March 2008
Nil (*15) April 2008 to March 2009
3376830 (*16) April 2009 to March 2010 The Commissioner of Income Tax (Appeals) LTU Bangalore
Nil (*17) April 2010 to March 2011
Nil (*18) April 2011 to March 2012
Nil (*19) April 2012 to March 2013 The Dispute Resolution Panel Bangalore
The Customs Act 1962 Customs duty Nil (*20) April 2009 to October 2013 CESTAT Bangalore

(*1) Net of 5094915 paid "under protest" by the Company.

(*2) Net of 576227 paid "under protest" by the Company.

(*3) Net of 5872886 paid "under protest" by the Company.

(*4) Net of 78550 paid "under protest" by the Company.

(*5) Net of 12228373 paid "under protest" by the Company.

(*6) Net of 404400 paid "under protest" by the Company.

(*7) Net of 2715000 paid“under protest by the Company.

(*8) Net of 2141073 paid "under protest" by the Company.

(*9) Net of 5345294 paid "under protest" by the Company.

(*10) Net of 3963243paid "under protest" by the Company.

(*11) Net of 18000000 paid "under protest" by the Company.

(*12) Net of 750375 paid "under protest" by the Company.

(*13) Net of 27667829 paid "under protest" by the Company.

(*14) Net of 54009650 paid "under protest" by the Company.

(*15) Net of 50365440 paid "under protest" by the Company.

(*16) Net of 53038036 paid "under protest" by the Company.

(*17) Net of 50842950 paid "under protest" by the Company.

(*18) Net of 19639356 paid "under protest" by the Company.

(*19) Net of 57400000 paid“under protest” by the Company.

(*20) Net of 15908015 paid "under protest" by the Company.

viii. As the Company does not have any loans or borrowings from anyfinancialinstitution or bank or Government nor has it issued any debentures as at the balancesheet date the provisions of Clause 3(viii) of the Order are not applicable to theCompany.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its of cers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with ScheduleV to the Act.

xii. As the Company is not a NidhfiCompany and the NidhfiRules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of theAct. The details of such related partytransactions have been disclosed in thefinancial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specfied under Section 133 of theAct readwith Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under audit.Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Shivakumar Hegde
Bengaluru Partner
August 24 2017 Membership Number: 204627