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Kirloskar Ferrous Industries Ltd.

BSE: 500245 Sector: Metals & Mining
NSE: KIRLOSFERR ISIN Code: INE884B01025
BSE 00:00 | 24 May 94.80 4.15
(4.58%)
OPEN

89.75

HIGH

95.35

LOW

89.70

NSE 05:30 | 01 Jan Kirloskar Ferrous Industries Ltd
OPEN 89.75
PREVIOUS CLOSE 90.65
VOLUME 43803
52-Week high 104.40
52-Week low 77.40
P/E 13.30
Mkt Cap.(Rs cr) 1,305
Buy Price 92.10
Buy Qty 100.00
Sell Price 94.80
Sell Qty 10.00
OPEN 89.75
CLOSE 90.65
VOLUME 43803
52-Week high 104.40
52-Week low 77.40
P/E 13.30
Mkt Cap.(Rs cr) 1,305
Buy Price 92.10
Buy Qty 100.00
Sell Price 94.80
Sell Qty 10.00

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 Ind AS financial statements of Kirloskar FerrousIndustries Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flow and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information(hereinafter referred to as "the Ind AS financial statements").

Management's Responsibility for the Ind AS Financial Statement

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 Ind AS financial statements that give a true and fairviewof including other financialpositionfinancialcomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in

India including the Indian Accounting Standards (Ind AS) prescribed under Section 133of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial 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 Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting 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.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit 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 Ind AS financial statements. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our auditopinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid

Ind ASfinancial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March2018 and its profit total comprehensive income its cash flows and the changes in equityfor the year ended on that date.

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 mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we report to theextent applicable that: a. We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof 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 BalanceSheet the Statement of Profit and Loss including Other Comprehensive Income theStatement of Cash Flow and Statement of Changes in Equity dealt with by this Report are inagreement with the relevant books of account. d. In our opinion the aforesaid Ind ASfinancial

Standards prescribed under section 133 of the Act. e. On the basis of the writtenrepresentations received from the directors as on 31st March

2018 taken on record by the Board of Directors none of the directors is disqualifiedas on

31st March 2018 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 financialreporting of Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting. g. With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financialposition in its Ind ASfinancial statements; - Refer Note 44toIndASfinancial II. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses; III. There has been no delay in transferringamounts required to be transferred to the

Investor Education and Protection Fund by the Company.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No. 105215W / W100057
Suhas Deshpande
Partner
Pune : May 03 2018 Membership No.: 31787

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The Company has a program of verification of property plant and equipment to coverall the items in a phased manner over a period of two years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program certain property plant and equipment were physically verified by theyear. According to the information and explanations given to us no material discrepancieswere noticed on such verification.

(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) (a) As informed to us the physical verification of inventory has been conductedby the management at reasonable intervals and the discrepancies noticed during suchphysical verification were not material. Stocks lying with third parties at the year-endhave been confirmed.

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 Goods & Service Tax Employees'State Insurance Cess and any other material statutory dues have been regularly depositedduring the 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 31st March 2018 for a periodof more than six months from the date they became payable.

(b) Details of dues of Income-tax Service Tax Customs Duty Excise Duty and ValueAdded Tax which have not been deposited as on 31st March 2018 on account of disputes aregiven below:

Sl. No. Name of the statute Nature of the dues Amount unpaid (`) Period(s) to which the amount relate Forum where such dispute is pending
1 Central Excise Interest on 341496 2004-05 Assistant Commissioner of
Act 1944 refund Central Excise Bellary
2 Central Excise Cenvat Credit 1428937 2007-08 Assistant Commissioner of
Act 1944 issues to 2016-17 Central Excise Bellary
3 Central Excise Cenvat Credit 94084 2010-11 Assistant Commissioner of
Act 1944 availed on Steel Central Excise Bellary
4 Central Excise Act 1944 Cenvat Credit on capital goods write offs 1023603 2009-10 Additional Commissioner of Central Excise Belgaum
5 Finance Act 1994 Cenvat Credit utilised for Service Tax payment 7585734 2006-07 Commissioner of Central Excise Belgaum
6 Finance Act 1994 Cenvat Credit issues 772188 2009-10 to 2011-12 Assistant Commissioner of Central Excise Bellary
7 Finance Act Cenvat Credit 2716155 2011-12 & Assistant Commissioner of
1994 issues 2016-17 Central Excise Bellary
8 Finance Act 1994 Service Tax demand on Interest on Letter of Credit 11496454 2012-13 CESTAT Bangalore
9 Finance Act 1994 Service Tax demand on usance charges 562844 2016-17 Assistant Commissioner of
Central Excise Bellary
10 Finance Act 1994 Service Tax demand on usance charges 926030 2014-15 and 2015-16 Commissioner of Central Excise (Appeals) Mysore
11 Finance Act 1994 Service Tax Cenvat Credit availed on Input Services 5373798 2015-16 & 2016-17 Commissioner of Central Excise Belgaum
12 Customs Act 1962 Refund of customs duty 337883 2010-11 CESTAT Bangalore
13 Income Tax Act 1961 Minimum Alternate Tax 115460131 2005-06 to 2007-08 Hon'ble High Court Mumbai
14 Income Tax Act 1961 Disallowance of Expenses 93615326 2011-12 & 2012-13 Commissioner of Income Tax (Appeals) Pune
15 Karnataka VAT Act 2003 Disallowed Input Tax Credit 8276255 2007-08 Hon'ble High Court of Karnataka Dharwad Bench
16 Karnataka VAT Rejected Input 3779903 2008-09 Assistant Commissioner
Act 2003 Tax Credit of Commercial Tax
Davanagere
17 Karnataka VAT Act 2003 Input Tax Credit on purchases 53207879 2013-14 & 2014-15 Local Vat Officer Koppal
18 Provident Fund and Miscellaneous Provisions Act 1952 Interest and damages for belated remittance 6719589 2001 to 2005 EPF Appellate Tribunal New Delhi
19 Provident Fund and Miscellaneous Provisions Act 1952 Demand for differential 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 the repayment of loans or borrowings to financial dues todebenture holders.

(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 tous no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013. (xii) In our opinion and according to the information and explanations given tous the Company 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 givento us the Company is in compliance with Section 177 and 188 of the Companies Act 2013where applicable for all transactions with the related parties and the details of relatedparty transactions have been disclosed in the Ind AS financial statements as required bythe applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underparagraph 3(xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the

Company has not entered into any non-cash transactions with its directors or personsconnected with him. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-I of the ReserveBank of India Act

1934.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No. 105215W/W100057
Suhas Deshpande
Partner
Pune May 03 2018 Membership No. 31787

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KirloskarFerrous Industries Limited ("the Company") as of 31st March 2018 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial based on the internal control over financial reporting essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the 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. We conducted our audit in accordancewith the Guidance Note issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial financial reporting was established and maintained and if such controlsoperated effectively respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal controls system over financial reporting and their operating effectiveness.Our audit of internal financial financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial 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 the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient audit opinion on theCompany's internal financial controls system over 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 purposes in accordance with generally accepted accountingprinciples. A Company's internal financial control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls overfinancialreporting including the possibility of collusion or improper management overrideof controls 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the Institute of CharteredAccountants of India

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No. 105215W/W100057
Suhas Deshpande
Partner
Pune May 03 2018 Membership No. 31787