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Kirloskar Ferrous Industries Ltd.

BSE: 500245 Sector: Metals & Mining
NSE: KIRLFER ISIN Code: INE884B01025
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VOLUME 3268
52-Week high 305.75
52-Week low 183.75
P/E 7.46
Mkt Cap.(Rs cr) 3,001
Buy Price 215.50
Buy Qty 20.00
Sell Price 215.95
Sell Qty 98.00
OPEN 214.00
CLOSE 210.05
VOLUME 3268
52-Week high 305.75
52-Week low 183.75
P/E 7.46
Mkt Cap.(Rs cr) 3,001
Buy Price 215.50
Buy Qty 20.00
Sell Price 215.95
Sell Qty 98.00

Kirloskar Ferrous Industries Ltd. (KIRLFER) - Auditors Report

Company auditors report

on the Audit of the Standalone Financial Statements

To the Members of

Kirloskar Ferrous Industries Limited

Opinion

Wehaveauditedtheaccompanyingstandalonefinancialstatements of Kirloskar FerrousIndustries Limited ("the Company") which comprise the Balance Sheet as at March31 2022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements").

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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under

Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the independence requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sr. No. Key Audit Matter How our audit addressed the key audit matter
1. Contingent Liability Our procedures included but were not limited to the following:
The Company is involved in direct and indirect tax litigations amounting to Rs 29.28 Crores that are pending with various tax authorities. Whether a liability is recognized or disclosed as a contingent liability in the financial statements is inherently judgmental and dependent on assumptions and assessments. We placed specific focus on the judgements in respect to these demands against the Company. Determining the amount if any to be recognized or disclosed in the financial statements is inherently subjective. Therefore these litigations amount is considered to be a key audit matter. • Obtained an understanding from the management with respect to process and controls followed by the Company for identification and monitoring of significant developments in relation to the litigations including completeness thereof.
• Obtained the list of litigations from the management and reviewed their assessment of the likelihood of outflow of economic resources being probable possible or remote in respect of the litigations.
• Assessed management's discussions held with their legal consultants and understanding precedents in similar cases;
• Obtained and evaluated the confirmations from the consultants representing the Company before the various authorities and our own dedicated teams of direct tax and indirect tax. Assessed and validated the adequacy and appropriateness of the disclosures made by the management in the financial statements.
2. Property Plant & Equipment
Valuation and existence of property plant and equipment including assessment of useful lives and residual values Property plant and equipment represents a significant proportion of the Company's asset base. The estimates and assumptions made to determine the carrying amounts including whether and when to capitalize or expense certain costs and the determination of depreciation charges are material to the Company's financial position and performance. The charges in respect of periodic depreciation are derived after estimating an asset's expected useful life and the expected residual value. Changes to asset's carrying amounts expected useful lives or residual value could result in a material impact on the financial statements and hence considered as key audit matter. Our audit approach consisted evaluation of design and implementation of controls and testing the operating effectiveness of the internal controls over valuation of property plant and equipment and review of useful lives; Periodic physical verification of property plant and equipment for adequacy and appropriateness of the accounting and disclosure by the Management:
• Review of CAPEX business process flow of documents/ information and their control's effectiveness.
• Substantive Tests on random sampling for all the major additions deletions to the assets by applying all the characteristics of capital expenditure proper classification of the same with reference to the company's policy and accounting standards.
• We performed substantive testing for the determination of assets' useful lives and residual values with reference to management's judgments including the appropriateness of past / existing asset lives and residual values applied in the calculation of depreciation. We also obtain certificates relating to useful lives of assets wherever required.
• We have reviewed the policy and the procedure of physical verification of PPE.
• After carrying out above audit procedures we did not identify any exceptions in relation to the valuation and the existence of property plant and equipment including assessment of useful lives and residual values which may affect our opinion.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 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 the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its 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 tothe Investor Education and Protection Fund by the Company.

iv. With respect to clause (e) of Rule 11 of the Companies (Audit and Auditors) Rules2014 as amended

a. The management has represented that to the best of its knowledge and belief nofunds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries.

b. Management has represented that to the best of its knowledge and belief no fundshave been received by the company from any person(s) or entity(ies) including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries.

c. Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our attention that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11 (e) as provided under (a) and(b) above contain any material misstatement.

v. Dividend declared and paid during the year by the company is in compliance withSection 123 of the Companies Act 2013.

2. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

3. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No. 105215W/W100057
Suhas Deshpande
Partner
Membership No.: 031787
UDIN: 22031787AJDPLO3594
Pune May 17 2022

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragrapRs 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Kirloskar Ferrous Industries Limitedof 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 March 31 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management and Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal control over 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. 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofInherent reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal 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 and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.

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 Controls Over Financial Reporting

Becauseoftheinherentlimitationsofinternalfinancialcontrolsover financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 March 31 2022 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No.105215W/W100057
Suhas Deshpande
Partner
Membership No.: 031787
UDIN: 22031787AJDPLO3594
Pune May 17 2022

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragrapRs 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of KIRLOSKAR FERROUS INDUSTRIES LIMITEDof even date)

(i) In respect of the Company's Fixed Assets

(a)

(A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property plant and equipment.

(B) The Company has maintained proper records showing full particulars of Intangibleassets.

(b) The Company has a program of verification to cover all the items of Property plantand equipment in a phased manner which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program Property plantand equipment were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(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 (otherthan immovable properties where the Company is the lessee and the lease agreements areduly executed in favour of the Company) disclosed in the standalone financial statementsare held in the name of the Company.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not revalued its propertyplant and equipment (including Right-of-use assets) or Intangible assets or both duringthe year.

(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no proceedings initiated or pendingagainst the Company for holding any benami property under the Prohibition of BenamiProperty Transactions Act 1988 and rules made thereunder.

(ii) (a) As informed to us the inventory has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable and procedures and coverage as followed by management were appropriate. Nodiscrepancies were noticed on verification between the physical stocks and the bookrecords that were 10% or more in the aggregate for each class of inventory.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has been sanctioned working capitallimits in excess of five crore rupees in aggregate from banks on the basis of securityof current assets. In our opinion the quarterly returns or statements filed by theCompany with such banks are in agreement with the books of account of the Company.

(iii) Based on the audit procedures conducted by us and according to the informationand explanations provided to us during the year the company has purchased equity sharesof Rs 476.63 Crores of ISMT Limited (Subsidiary of the Company) and has granted unsecuredloan to ISMT Limited details of such loan are given in sub-clause (a).

(a) A. the aggregate amount during the year is Rs 194 Crores and balance outstandingat the balance sheet date with respect to such loans or advances and guarantees orsecurity to subsidiary is Rs 194 Crores.

B. based on the audit procedures carried on by us and as per the information andexplanations given to us the Company has granted following loans to parties other thansubsidiaries :

Aggregate amount during the year Balance outstanding as at balance sheet date
Loans to Employees RS 1.09 Crores RS 0.12 Crores
Loans to Contractors RS 1.49 Crores RS 0.84 Crores

(b) The investments made and the terms and conditions of the grant of all theabove-mentioned loans during the year are in our opinion prima facie not prejudicial tothe Company's interest.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in the case of loans given the repayment ofprincipal and payment of interest has been stipulated and the repayments or receipts havebeen regular.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is no overdue amount for more than ninetydays in respect of loans given.

(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is no loan given falling due during theyear which has been renewed or extended or fresh loans given to settle the over dues ofexisting loans given to the same party.

(f) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not given any loans eitherrepayable on demand or without specifying any terms or period of repayment.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has not given any loans or provided any guaranteeor security as specified under Section 185 of the Companies Act 2013 and the Company hasnot provided any guarantee or security as specified under Section 186 of the CompaniesAct 2013. Further the Company has complied with the provisions of Section 186 of theCompanies Act 2013 in relation to loans given and investments made.

(v) The Company has not accepted any deposits or amounts which are deemed to bedeposits from the public. Accordingly clause 3(v) of the Order is not applicable.

(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) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities. There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues in arrears as at March 31 2022 for a period of morethan six months from the date they became payable.

(b) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2022 on account of dispute aregiven below:

Name of the statute Nature of the dues Amount under dispute (Rs) Period(s) to which the amount relate Forum where such dispute is pending
Central Excise Act 1944 Interest on refund 341496/- FY 2003-04 Assistant Commissioner of Central Excise Bellary
Central Excise Act 1944 Cenvat Credit availed on Steel 94084/- FY 2010-11 Assistant Commissioner of Central Excise Bellary
Central Excise Act 1944 Cenvat Credit availed on Iron ore supplied by EOU 7116956/- FY 2013-14 and FY 2014-15 Commissioner (Appeals) Central Tax Belagavi
Finance Act 1994 Cenvat credit for payment of Service Tax on GTA and Scientific Tec. Services 7585734/- FY 2006-07 Commissioner (Appeals) Central Tax Belagavi
Finance Act 1994 Service Tax demand on Interest on Letter of Credit 11496454/- FY 2008-09 to FY 2011-12 CESTAT Bangalore
Finance Act 1994 Service Tax Cenvat Credit availed on Input Services 5340086/- FY 2011-12 to FY 2014-15 CESTAT Bangalore
Finance Act 1994 Refund Claim filed in respect of Service Tax and KKC Cenvat Credit pertaining to Railway Siding Project 4115498/- FY 2016-17 and FY 2017-18 CESTAT Bangalore
Finance Act 1994 Service Tax paid on Royalty charges towards the purchase of Iron ore through e-auction 3410620/- FY 2016-17 Commissioner of Central Tax (Appeals) Belgaum
Finance Act 1994 Re-claim of Krishi Kalyan Cess & Interest thereon. 5796453/- FY 2017-18 Asst. Commissioner of Central Tax & Central Excise Hospet
GST Input Tax Credit on various material & services 7535328/- FY 2017-18 Asst. Commissioner of Central Tax Hospet
GST Input Tax Credit on Royalty against grant of mining rights 19915458/- FY 2017-18 Asst. Commissioner of Central Tax Hospet
Income Tax Act 1961 Minimum Alternate Tax (1) 82151567/- FY 2004-05 and FY 2006-07 Hon'ble High Court Mumbai
Income Tax Act 1961 Depreciation allowance - TG-3 Assessment Demand (2) 93713150/- FY 2010-11 and FY 2011-12 Income Tax Appellate Tribunal Pune
Income Tax Act 1961 Tax demand raised for Guest House Expenses 76318/- FY 2013-14 Asst. Commissioner of Income Tax Pune
Income Tax Act 1961 Disallowance of Depreciation on TG-III & Foreign Exchange Losses 24445078/- FY 2017-18 Commissioner of Income Tax (Appeals) Pune
Karnataka VAT Act 2003 Disallowed Input Tax Credit 8276255/- FY 2007-08 Hon'ble High Court of Karnataka Dharwad Bench
Provident Fund and Miscellaneous Provisions Act 1952 Interest and damages for belated remittance 6719589/- FY 2001-02 to FY 2004-05 EPF Appellate Tribunal New Delhi

(1) Out of the total amount under dispute Rs 15628182/- is paid under protest. (2)Total amount under dispute is paid under protest

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not surrendered ordisclosed any transactions previously unrecorded as income in the books of account inthe tax assessments under the Income-tax Act 1961 as income during the year.

(ix)

(a) In our opinion the company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been declared a willfuldefaulter by any bank or financial institution or government or government authority.

(c) According to the information and explanations given to us by the management and onthe basis of our examination of the records of the Company the term loans were appliedfor the purpose for which the loans were obtained.

(d) According to the information and explanations given to us by the management and onthe basis of our examination of the records of the Company no funds raised on short termbasis have been utilised for long term purposes.

(e) On an overall examination of the financial statements and records of the Companythe Company has raised _ 528.87 Crores through Commercial Papers which were used topurchase the equity shares of the subsidiary company namely ISMT Limited. Further theCompany has also raised _ 250 Crores by issue of Non-Convertible Unsecured and ReedemableDebentures for the purpose of onward lending to its subsidiary company. As per the termsof agreement between the Company and ISMT Limited the proceeds of equity shares as wellas loan are to utilised for settlement of the subsidiary company's facilities.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries as defined under the Companies Act 2013. Accordinglyclause 3(ix)(f) of the Order is not applicable.

(x)

(a) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). Accordingly clause 3(x)(a) of the Order is notapplicable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3(x)(b) of the Order is not applicable.

(xi)

(a) 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.

(b) According to the information and explanations given to us no report undersub-section (12) of Section 143 of the Companies Act 2013 has been filed by the auditorsin Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) We have considered whistle-blower complaints received by the Company during theaudit period.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe transactions with related parties are in compliance with Sections 177 and 188 of theCompanies Act 2013 where applicable and the details of the related party transactionshave been disclosed in the standalone financial statements as required by the applicableIndian Accounting Standards

(xiv)

(a) Based on information and explanations provided to us and our audit procedures inour opinion the Company has an internal audit system commensurate with the size andnature of its business.

(b) We have considered the internal audit reports of the Company issued to the Companyduring the year & covering the period upto 31 March 2022 for the period under audit.

(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected to its directors and hence provisions of Section 192 of the Companies Act 2013are not applicable to the Company.

(xvi)

(a) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly clause 3(xvi)(a) of the Order is not applicable.

(b) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is not applicable.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of the Order is notapplicable.

(d) According to the information and explanations given to us and based on auditprocedures performed by us we report that the Group does not have more than one CIC.

(xvii) The Company has not incurred cash losses in the current and in the immediatelypreceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year.Accordingly clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) In our opinion and according to the information and explanations given to usthere is no unspent amount under sub-section (5) of Section 135 of the Companies Act 2013pursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) of the Orderare not applicable.

For Kirtane & Pandit LLP
Chartered Accountants
Firm Registration No. 105215W/W100057
Suhas Deshpande
Partner
Membership No.: 031787
UDIN: 22031787AJDPLO3594
Pune May 17 2022

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