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Kennametal India Ltd.

BSE: 505890 Sector: Engineering
NSE: WIDIA ISIN Code: INE717A01029
BSE 13:51 | 17 Dec 1043.15 32.95
(3.26%)
OPEN

1018.00

HIGH

1054.00

LOW

1018.00

NSE 05:30 | 01 Jan Kennametal India Ltd
OPEN 1018.00
PREVIOUS CLOSE 1010.20
VOLUME 7222
52-Week high 1111.00
52-Week low 681.25
P/E 31.69
Mkt Cap.(Rs cr) 2,293
Buy Price 1043.30
Buy Qty 1.00
Sell Price 1046.35
Sell Qty 1.00
OPEN 1018.00
CLOSE 1010.20
VOLUME 7222
52-Week high 1111.00
52-Week low 681.25
P/E 31.69
Mkt Cap.(Rs cr) 2,293
Buy Price 1043.30
Buy Qty 1.00
Sell Price 1046.35
Sell Qty 1.00

Kennametal India Ltd. (WIDIA) - Auditors Report

Company auditors report

To the Members of Kennametal India Limited Report on the FinancialStatements

1. We have audited the accompanying financial statements of KennametalIndia Limited (‘the Company') which comprise the Balance Sheet as at 30 June 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (‘the Act') with respect to thepreparation of these financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (‘Ind AS') specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financialstatements based on our audit. 4. We have taken into account the provisions of the Actthe accounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether these financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial controls relevant to theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on these financial statements.

Opinion

8. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including Ind AS specifiedunder Section 133 of the Act of the state of affairs (financial position) of the Companyas at 30 June 2018 and its profit (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information for the year ended 30 June2017 and the transition date opening balance sheet as at 1 July 2016 prepared inaccordance with Ind AS included in these financial statements are based on the previouslyissued statutory financial statements for the year ended 30 June 2017 and 30 June 2016respectively prepared in accordance with Accounting Standards prescribed under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (as amended) whichwere audited by the predecessor auditor whose reports dated 24 August 2017 and 9 August2016 respectively expressed unmodified opinion on those financial statements and havebeen adjusted for the differences in the accounting principles adopted by the Company ontransition to Ind AS which have been audited by us. Our opinion is not modified inrespect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016(‘the Order') issued by the Central Government of India in terms of Section 143(11)of the Act we give in the Annexure I a statement on the matters specified in paragraphs 3and 4 of the Order.

11. Further to our comments in Annexure I as required by Section143(3) of the Act we report that: a) we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposeof our audit; b) in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books; c) the financialstatements dealt with by this report are in agreement with the books of account; d) in ouropinion the aforesaid financial statements comply with Ind AS specified under Section 133of the Act; e) on the basis of the written representations received from the directors andtaken on record by the Board of Directors disqualified none of the directors as on30 June 2018 from being appointed as a director in terms of Section 164(2) of the Act; f)we have also audited the internal financial controls over financial reporting (IFCoFR) ofthe Company as on 30 June 2018 in conjunction with our audit of the financial statementsof the Company for the year ended on that date and our report dated 23 August 2018 as perAnnexure II expressed unmodified opinion; g) with respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 (as amended) in our opinion and to the best of our information andaccording to the explanations given to us: i. the Company as detailed in Note 29 to thefinancial statements has disclosed the impact of pending litigations on its financialposition; ii. the Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses; iii. there were no amountswhich were required to be transferred to the Investor Education and Protection Fund by theCompany; iv. the disclosure requirements relating to holdings as well as dealings inspecified bank notes were applicable for the period from 8 November 2016 to 30 December2016 which are not relevant to these financial statements. Hence reporting under thisclause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Vijay Vikram Singh

Partner

Membership No.: 059139

Bengaluru

August 23 2018

Annexure I to the Independent Auditor's Report of even date to themembers of Kennametal India Limited on the financial statements for the year ended 30June 2018

Annexure I

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that: (i) (a) The Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of itsfixed assets under which fixed assets are verified in a phased manner over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. In accordance with this program certain fixed assets wereverified during the year and no material discrepancies were noticed on such verification.(c) The title deeds of all the immovable properties (which are included under thehead ‘Property plant and equipment) are held in the name of the Company.

(ii) In our opinion the management has conducted physical verificationof inventory at reasonable intervals during the year except for goods-in-transit andstocks lying with third parties. For stocks lying with third parties at the year-endwritten confirmations have been obtained by the management. No material discrepancies werenoticed on the aforesaid verification. (iii) The Company has not granted any loan securedor unsecured to companies firms Limited Liability Partnerships (LLPs) or other partiescovered in the register maintained under Section 189 of the Act. Accordingly theprovisions of clauses 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order are not applicable.(iv) In our opinion the Company has not entered into any transaction covered underSections 185 and 186 of the Act. Accordingly the provisions of clause 3(iv) of the Orderare not applicable. (v) In our opinion the Company has not accepted any deposits withinthe meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the Order are notapplicable.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of Company'sproducts/services and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.

(vii) (a) The Company is regular in depositing undisputed statutorydues including provident fund employees' state insurance income-tax sales-tax servicetax goods and service tax duty of customs duty of excise value added tax cess andother material statutory dues as applicable to the appropriate authorities. Further noundisputed amounts payable in respect thereof were outstanding at the year-end for aperiod of more than six months from the date they become payable.

(b) The dues outstanding in respect of income-tax sales-taxservice-tax goods and service tax duty of customs duty of excise and value added tax onaccount of any dispute are as follows: Statement of Disputed Dues (Rsin lakhs)

Name of the statute Nature of dues

Amount (Rs)

Amount paid under Protest (Rs)

Period to which the amount relates Forum where dispute is pending
The Central Excise Act 1944 Excise Duty/ Service tax

1

-

January 1998 to September 2011 The Customs Excise & Service Tax Appellate Tribunal (CESTAT) Bangalore
Excise Duty

97

51

April 2006 to June 2013 CESTAT Bangalore
Finance Act 1994 Service Tax

12

6

April 2007 to March 2008 CESTAT Bangalore
The Delhi Sales Tax Act 1975 Sales Tax

2

1

April 2004 to march 2005 Joint Commissioner Appeals Delhi
The Uttar Pradesh Value Added Tax Act 2008 Value Added Tax

4

4

May 2011 Joint Commissioner Appeals Sonabhadhra Uttar Pradesh
The Andhra Pradesh General Sales Tax Act 1957 Sales Tax

117

59

April 2003 to March 2004 Sales Tax Appellate Andhra Pradesh
The Karnataka Tax on Entry of Goods Act 1979 Entry Tax

122

122

April 2010 to June 2017 The Commissioner of Commercial Tax Bangalore
The Customs Act 1962 Customs Duty

159

159

August 2009 to October 2013 CESTAT Bangalore
The Central Sales Tax Act 1956 Sales Tax

64

62

April 2010 to March 2011 The Assistant Commissioner of Commercial Tax Bangalore
Sales Tax

Nil

33

April 2011 to March 2012 The Assistant Commissioner of Commercial Tax Bangalore
Sales Tax

Nil

60

April 2012 to March 2013 The Joint Commissioner of Commercial Tax (Appeals) Bangalore
Sales Tax

Nil

69

April 2013 to March 2014 The Assistant Commissioner of Commercial Tax Bangalore
Sales Tax

599

180

April 2014 to March 2015 The Joint Commissioner of Commercial Tax (Appeals) Bangalore
Income Tax Act 1961 Income Tax

8

8

April 1993 to March 1994 The Income Tax Appellate Tribunal Bangalore

22

-

April 1999 to March 2001 Supreme Court of India

277

277

April 1999 to March 2001 The Commissioner of Income Tax (Appeals) Bangalore

702

702

April 2006 to March 2007 Transfer Pricing Office

550

550

April 2007 to March 2008 The Commissioner of Income Tax (Appeals) Bangalore

505

505

April 2008 to March 2009 The Commissioner of Income Tax (Appeals) Bangalore

528

494

April 2009 to March 2010 The Commissioner of Income Tax (Appeals) Bangalore

473

473

April 2010 to March 2011 The Commissioner of Income Tax (Appeals) Bangalore

108

108

April 2011 to March 2012 The Commissioner of Income Tax (Appeals) Bangalore

164

164

April 2012 to March 2013 The Income Tax Appellate Tribunal Bangalore

209

209

April 2013 to March 2014 The Dispute Resolution Panel Bangalore

(viii) The Company has no loans or borrowings payable to a financialinstitution or a bank or government and no dues payable to debenture-holders during theyear. Accordingly the provisions of clause 3(viii) of the Order are not applicable.

(ix) The Company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments) and did not have any term loansoutstanding during the year. Accordingly the provisions of clause 3(ix) of the Order arenot applicable.

(x) No fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordinglyprovisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are incompliance with Sections 177 and 188 of Act where applicable and the requisite detailshave been disclosed in the financial statements etc. as required by the applicable IndAS.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cashtransactions with the directors or persons connected with them covered under Section 192of the Act.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Vijay Vikram Singh

Partner

Membership No.: 059139

Bengaluru

August 23 2018

Annexure II

Independent Auditor's report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

1. In conjunction with our audit of the financial statements ofKennametal India Limited ("the Company") as of and for the year ended 30 June2018 we have audited the internal financial controls over financial reporting (IFCoFR) ofthe Company as of that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal control over the financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ("theICAI"). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFRbased on our audit. We conducted our audit in accordance with the Standards on Auditingissued by the Institute of Chartered Accountants of India (ICAI) and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofIFCoFR and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFRincluded obtaining an understanding of IFCoFR assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's IFCoFR includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

7. Because of the inherent limitations of IFCoFR including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 30 June 2018 based on theinternal control over the financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Vijay Vikram Singh

Partner

Membership No.: 059139

Bengaluru

August 23 2018