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Kirloskar Ferrous Industries Ltd.

BSE: 500245 Sector: Metals & Mining
NSE: KIRLOSFERR ISIN Code: INE884B01025
BSE LIVE 15:48 | 17 Nov 80.75 2.35
(3.00%)
OPEN

80.00

HIGH

82.75

LOW

79.35

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 80.00
PREVIOUS CLOSE 78.40
VOLUME 1049110
52-Week high 112.00
52-Week low 64.70
P/E 26.13
Mkt Cap.(Rs cr) 1,109
Buy Price 82.55
Buy Qty 200.00
Sell Price 0.00
Sell Qty 0.00
OPEN 80.00
CLOSE 78.40
VOLUME 1049110
52-Week high 112.00
52-Week low 64.70
P/E 26.13
Mkt Cap.(Rs cr) 1,109
Buy Price 82.55
Buy Qty 200.00
Sell Price 0.00
Sell Qty 0.00

Kirloskar Ferrous Industries Ltd. (KIRLOSFERR) - Auditors Report

Company auditors report

TO THE MEMBERS OF KIRLOSKAR FERROUS INDUSTRIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Kirloskar FerrousIndustries Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in Section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation andpresentation of these 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 relevant rules issued thereunder fromtime to time. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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 control 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 financial statements based on ouraudit. 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 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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Board of Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial 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 March31 2017 and its profit and its cash flows for the year ended on that date.

Other Matter

The financial statements of the Company for the year ended 31st March 2016 wereaudited by other auditor who expressed an unmodified opinion on these statements on 29thApril 2016.

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 sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. in our opinion the aforesaid financial statements comply with the AccountingStandards referred to in Section 133 of the Act read with relevant rules issuedthereunder from time to time;

e. on the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.

f. with respect to the adequacy of the internal financial controls over the financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";

g. with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialstatements Refer Note 37 to the 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 to theInvestor Education and Protection Fund by the Company;

iv) The Company has provided requisite disclosures in the financial statements as toholding as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management Refer Note 41 to thefinancial statements.

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

The annexure referred to in paragraph 1 in Report on Other Legal and RegulatoryRequirements of the Independent Auditors' Report to the members of the Company on thefinancial statements for the year ended March 31 2017 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As informed to us the fixed assets have been physically verified by the Managementat reasonable intervals in accordance with the phased programme of verification adopted bythe Company and the discrepancies noticed during such physical verification were notmaterial.

(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 immovable properties areheld in the name of the Company.

(ii) As informed to us the physical verification of inventory has been conducted bythe management at reasonable intervals and the discrepancies noticed during such physicalverification were not material. Stocks lying with third parties at the year-end have beenconfirmed.

The discrepancies noticed on physical verification of Inventory as compared to the bookrecords have been properly dealt with the Books of Account.

(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act. Accordingly paragraph 3(iii) of the Order is notapplicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has not given loans made investments or given guarantees which are covered by theprovisions of Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public under Section 73 to 76 or any otherrelevant provisions of the Companies Act and the rules framed there under.

(vi) The Central Government has specified maintenance of cost records under Sub-Section(1) of Section 148 of the Act and we are of the opinion that prima facie such accounts andrecords are made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.

(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 Income TaxSales Tax Value Added Tax Duty of Customs Duty of Excise Service Tax Employees' StateInsurance Cess and any other material statutory dues have been regularly deposited duringthe year by the Company with appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of statutory dues were in arrears as at March 31 2017 for a period ofmore than six months from the date they became payable.

(b) According to the information and explanations given to us there are amounts ofExcise Duty Customs Duty Value Added Tax Service Tax Income Tax and Provident Fundwhich have not been deposited on account of dispute as listed below:

Sl. No Name of the statute Nature of the dues Amount in Rs Financial year to which the amount relates Forum where dispute is pending Remarks if any
1 Central Excise Act 1944 Interest on refund 341496 2004-05 Assistant Commissioner of Central Excise Bellary
2 Central Excise Act 1944 Cenvat Credit issues 1797114 2007-08 to 2016-17 Assistant Commissioner of Central Excise Bellary
3 Central Excise Act 1944 Cenvat Credit availed on Steel 8860610 2004-05 to 2009-10 CESTAT Bangalore
4 Central Excise Act 1944 Cenvat Credit availed on Steel 268737 2009-10 Commissioner of Central Excise (Appeals) Mysore
5 Central Excise Act 1944 Cenvat Credit availed on Steel 94084 2010-11 Assistant Commissioner of Central Excise Bellary
6 Central Excise Act 1944 Cenvat Credit on capital goods write o s 1023603 2009-10 Additional Commissioner of Central Excise Belgaum
7 Central Excise Act 1944 Valuation of excisable goods 1876214 2000-01 CESTAT Mumbai
8 Finance Act 1994 Cenvat Credit utilised for Service Tax payment 7585734 2006-07 Commissioner of Central Excise Belgaum
9 Finance Act 1994 Cenvat Credit issues 772188 2009-10 to 2011-12 Assistant Commissioner of Central Excise Bellary
10 Finance Act 1994 Penalty on Freight Outward 2992835 2013-14 CESTAT Bangalore
11 Finance Act 1994 Cenvat Credit issues 2716155 2011-12 and 2016-17 Assistant Commissioner of Central Excise Bellary
12 Finance Act 1994 Service Tax demand on Interest on Letter of Credit 11496454 2012-13 CESTAT Bangalore
13 Finance Act 1994 Service Tax demand on Interest on Letter of Credit 1887734 2014-15 Commissioner of Central Excise (Appeals) Mysore
14 Finance Act 1994 Service Tax demand on usance charges 983215 2015-16 and 2016-17 Assistant Commissioner of Central Excise Bellary
15 Finance Act 1994 Service Tax demand on usance charges 505569 2015-16 Commissioner of Central Excise (Appeals) Mysore
16 Finance Act 1994 Service Tax Cenvat Credit availed on Input Services 5373798 2015-16 and 2016-17 Commissioner of Central Excise Belgaum
17 Customs Act 1962 Refund of customs duty 337883 2010-11 CESTAT Bangalore
18 Income Tax Act 1961 Minimum Alternate Tax 99831949 2004-05 to 2006-07 Hon'ble High Court Mumbai
19 Income Tax Act 1961 Disallowance of Expenses 58317163 2010-11 and 2011-12 Commissioner of Income Tax (Appeals) Pune Unfavourable outcome will be adjusted against the refund amount.
20 Income Tax Act 1961 Disallowance of Expenses 76318 2014-15 Deputy Commissioner of Income Tax Pune Unfavourable outcome will be adjusted against the refund amount.
21 Karnataka VAT Act 2003 Disallowed Input Tax Credit 8276255 2007-08 Hon'ble High Court of Karnataka Dharwad Bench
22 Karnataka VAT Act 2003 Input Tax Credit on purchases 52730556 2013-14 Local Vat O cer Koppal
23 Maharashtra VAT Act 2002 Disallowed Input Tax Credit 100828 2012-13 Deputy Commissioner of Sales Tax Solapur
24 Provident Fund and Miscellaneous Provisions Act 1952 Interest and damages for belated remittance 6719589 2001 to 2005 EPF Appellate Tribunal New Delhi
25 Provident Fund and Miscellaneous Provisions Act 1952 Demand for di erential PF dues 11813110 2012-13 to 2015-16 EPFO Bellary

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to its banks and financialinstitutions. The Company did not have any loan or borrowings from Government or anydebentures outstanding during the year.

(ix) In our opinion and according to the information and explanations given to us theterm loans taken by the Company have been applied for the purpose for which they wereraised. The Company had not raised money by way of further public offer (including debtinstruments) during the year.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us the managerialremuneration is paid or provided in accordance with the requisite approvals mandated bythe provisions of section 197 read with schedule V to the Act.

(xii) In our opinion and 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) In our opinion and according to the information and explanations given to usall transactions with related parties are in compliance with Sections 177 and 188 of theAct and the details as required by the applicable accounting standards have beendisclosed in the financial statements.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partiallyconvertible debentures during the year.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.

(xvi) In our opinion and 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.

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

The annexure referred to in paragraph 2(f) on Other Legal and Regulatory Requirementsof the Independent

Auditors' Report to the members of the Company on the financial statements for the yearended March 31 2017.

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

We have audited the internal financial controls over financial reporting of KirloskarFerrous Industries Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of the 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 and maintaining internalfinancial controls based on the internal financial control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing to the extent applicable to anaudit of internal financial controls both issued by the Institute of CharteredAccountants of India. 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 reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

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 controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial 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 or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Control Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting 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 internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Reg. No. 105215W/W100057
Suhas Deshpande
Partner
Pune : 28th April 2017 Membership No. 31787