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Kirloskar Electric Company Ltd.

BSE: 533193 Sector: Engineering
NSE: KECL ISIN Code: INE134B01017
BSE LIVE 15:48 | 22 Sep 46.25 -3.50
(-7.04%)
OPEN

48.60

HIGH

49.15

LOW

45.45

NSE 15:55 | 22 Sep 45.95 -3.05
(-6.22%)
OPEN

49.40

HIGH

49.40

LOW

45.20

OPEN 48.60
PREVIOUS CLOSE 49.75
VOLUME 141258
52-Week high 73.65
52-Week low 36.50
P/E
Mkt Cap.(Rs cr) 307
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 48.60
CLOSE 49.75
VOLUME 141258
52-Week high 73.65
52-Week low 36.50
P/E
Mkt Cap.(Rs cr) 307
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kirloskar Electric Company Ltd. (KECL) - Auditors Report

Company auditors report

TO THE MEMBERS OF KIRLOSKAR ELECTRIC COMPANY LIMITED BENGALURU

Abridge Report on the Abridge Standalone Financial Statements:

The accompanying abridged financial statements which comprise the abridged balancesheet as at March 31 2016 the abridged statement of profit and loss and abridged cashflow statement for the year then ended and related notes are derived from the auditedfinancial statements of Kirloskar Electric Company Limited ("the Company") as atand for the year ended March 31 2016. We expressed a qualified audit opinion on thosefinancial statements in our report dated May 25 2016.

The abridged financial statements do not contain all the disclosures required by theaccounting principles generally accepted in India including the accounting standardsspecified under section 133 of the Companies Act 2013 ("the Act") read withrule 7 of the Companies (Accounts) Rules 2014. Reading the abridged financial statementstherefore is not a substitute for reading the audited financial statements of theCompany.

Management’s Responsibility for the Abridge Standalone Financial Statements:

Management is responsible for the preparation of a summary of the audited financialstatements in accordance with the accounting standards specified under section 133 of theAct read with rule 7 of the Companies (Accounts) Rules 2014 and accounting principlesgenerally accepted in India.

Auditor’s Responsibility:

Our responsibility is to express an opinion on the abridged financial statements basedon our procedures which were conducted in accordance with Standard on Auditing (SA) 810"Engagements to Report on Summary Financial Statements" issued by the Instituteof Chartered Accountants of India.

Basis for Qualified Opinion:

Attention of the members is invited to note 52 of the financial statements regardingamounts due to the Company from certain subsidiaries towards part consideration receivableon sale/assignment of certain immoveable properties and receivables. We have relied onmanagement’s representations that it is confident of realization of amounts due fromthe said subsidiaries aggregating to Rs. 14950.73 lakhs (previous year Rs. 18452.51Lakhs). Shortfall in realization of consideration receivable if any could not beascertained.

Qualified Opinion:

In our opinion except for the effects of the matter described in the Basis forQualified Opinion paragraph above the abridged financial statements derived from theaudited financial statements of the Company as at and for the year ended March 31 2016are a fair summary of those financial statements in accordance with the accountingstandards specified under section 133 of the Act read with rule 7 of the Companies(Accounts) Rules 2014 and accounting principles generally accepted in India.

Other Matter:

We did not audit the financial statements/information of one branch the Kuala Lumpuroffice of the Company included in the standalone financial statements of the Companywhose financial statements reflect total assets of Rs. 224.47 lakhs as at 31st March 2016and total revenues of Rs. 0.69 lakhs for the year ended on that date as considered in thestandalone financial statements. The financial statements of the said office have beenaudited by the branch auditors (M/s Sundar & Associates Chartered Accountants) whosereport has been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these branches is based solely on the report ofsuch branch auditors.

Emphasis of Matter:

(a) Attention of the members is invited to note 53 of the financial statements wherein the directors have detailed the reasons for compiling the financial statements on agoing concern basis though the net worth of the group consisting of the Company itssubsidiaries and associate has been eroded. The appropriateness of the said basis issubject to the Company adhering to the restructuring plan and infusion of requisite fundsto it. We have relied on the representations made to us by the management.

Our report is not qualified in this respect.

(b) Attention of the members is invited to note 54 of the financial statements whichsets out that the Company has filed special leave petition in respect of demands forresale tax and sales tax penalty of Rs. 527 lakhs and Rs. 362 Lakhs respectively beforethe honourable Supreme Court of India. Management has represented to us that it is notprobable that there will be an outflow of economic benefits and hence no provision isrequired to be recognized in this regard. We have relied on this representation. Ourreport is not qualified in this respect.

For B.K. RAMADHYANI & CO LLP
Chartered Accountants
Firm Registration No. 002878S/S200021
VASUKI H S
Date: May 25 2016 Partner
Place: Bengaluru Membership No. 212013

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KIRLOSKAR ELECTRIC COMPANY LIMITEDBENGALURU

Report on the Standalone Financial Statements:

We have audited the accompanying standalone financial statements of Kirloskar ElectricCompany Limited ("the Company") which comprise the Balance Sheet as at March31 2016 the Statement of Profit and Loss the Cash Flow Statement and a summary ofsignificant accounting policies and other explanatory information for the year then endedin which are incorporated the financial statements audited by the branch auditors M/sSundar & Associates Chartered Accountants of the Kuala Lumpur office of the Companyin Malaysia.

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 and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting standardsspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility:

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 undersection 143(10) of the Act. Those Standards require that we comply with the ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our qualified auditopinion on the standalone financial statements.

Basis for Qualified Opinion:

Attention of the members is invited to note 52 of the financial statements regardingamounts due to the Company from certain subsidiaries towards part consideration receivableon sale/assignment of certain immovable properties and receivables. We have relied onmanagement’s representations that it is confident of realization of amounts due fromthe said subsidiaries aggregating to Rs. 14950.73 lakhs (previous year Rs. 18452.51Lakhs). Shortfall in realization of consideration receivable if any could not beascertained.

Qualified Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone 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 March 31 2016 and its loss and its cash flows for the yearended on that date.

Other Matter

We did not audit the financial statements/information of one branch the Kuala Lumpuroffice of the Company included in the standalone financial statements of the Companywhose financial statements reflect total assets of Rs. 224.47 lakhs as at 31st March 2016and total revenues of Rs. 0.69 lakhs for the year ended on that date as considered in thestandalone financial statements. The financial statements of the said office have beenaudited by the branch auditors (M/s Sundar & Associates Chartered Accountants) whosereport has been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these branches is based solely on the report ofsuch branch auditors.

Emphasis of Matter:

(a) Attention of the members is invited to note 53 of the financial statements wherein the directors have detailed the reasons for compiling the financial statements on agoing concern basis though the net worth of the group consisting of the Company itssubsidiaries and associate has been eroded. The appropriateness of the said basis issubject to the Company adhering to the restructuring plan and infusion of requisite fundsto it. We have relied on the representations made to us by the management. Our report isnot qualified in this respect.

(b) Attention of the members is invited to note 54 of the financial statements whichsets out that the Company has filed special leave petition in respect of demands forresale tax and sales tax penalty of Rs. 527 lakhs and Rs. 362 Lakhs respectively beforethe honourable Supreme Court of India. Management has represented to us that it is notprobable that there will be an outflow of economic benefits and hence no provision isrequired to be recognized in this regard. We have relied on this representation. Ourreport is not qualified in this respect.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by the 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus. c. The report on the accounts of the Kuala Lumpur office in Malaysia of the Companyaudited under Section 143 (8) of the Act by branch auditors have been forwarded to us andhave been duly dealt with by us while preparing this report.

d. The Balance Sheet Statement of Profit and Loss and Cash Flow statement dealt withby this report are in agreement with the books of account and with the returns receivedfrom the branches not visited by us.

e. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with rule 7 of theCompanies (Accounts) Rules 2014.

f. On the basis of the written representations received from the directors as on March31 2016 taken on the record by the Board of Directors none of the directors isdisqualified as on that date from being appointed as a director in terms of section 164(2)of the Act.

g. 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".

h. With respect to other matters to be included in the Auditors report in accordancewith rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us

i The Company has disclosed the impact of pending litigations on its financial positionin its financial statements – Refer Note 23 to the financial statements;;

ii The Company did not have any long-term contracts and has not entered into anyderivative contracts. Accordingly no provision is required to be recognised in respect ofmaterial foreseeable losses under applicable laws or accounting standards.

iii There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For B.K. RAMADHYANI & CO LLP
Chartered Accountants
Firm Registration No. 002878S/S200021
VASUKI H S
Date: May 25 2016 Partner
Place: Bengaluru Membership No. 212013