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Kirloskar Oil Engines Ltd.

BSE: 533293 Sector: Engineering
NSE: KIRLOSENG ISIN Code: INE146L01010
BSE 00:00 | 24 May 175.00 6.85
(4.07%)
OPEN

169.50

HIGH

175.00

LOW

168.00

NSE 00:00 | 24 May 174.55 5.50
(3.25%)
OPEN

168.80

HIGH

175.50

LOW

167.00

OPEN 169.50
PREVIOUS CLOSE 168.15
VOLUME 14696
52-Week high 354.85
52-Week low 150.10
P/E 11.25
Mkt Cap.(Rs cr) 2,531
Buy Price 173.00
Buy Qty 1.00
Sell Price 176.00
Sell Qty 10000.00
OPEN 169.50
CLOSE 168.15
VOLUME 14696
52-Week high 354.85
52-Week low 150.10
P/E 11.25
Mkt Cap.(Rs cr) 2,531
Buy Price 173.00
Buy Qty 1.00
Sell Price 176.00
Sell Qty 10000.00

Kirloskar Oil Engines Ltd. (KIRLOSENG) - Auditors Report

Company auditors report

TO THE MEMBERS OF KIRLOSKAR OIL ENGINES LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial StatementsReport on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of KirloskarOil Engines Limited ("the Company") comprising of the Balance Sheet as at 31March 2018 the Statement of Profit Loss (including Other Comprehensive Income) the CashFlow Statement for the year then ended and the Statement of Changes in Equity for the yearthen ended and a summary of significant and other explanatory information (hereinafterreferred to as "the Standalone Ind AS Financial Statements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the preparation of these standaloneInd AS financial statements in terms of the requirements of the matters stated in Section134(5) of the Companies Act 2013 (hereinafter referred to as "the Act") thatgive a true and fair view of the standalone financial position standalone financialperformance standalone cash flows and changes in equity of the Company in accordance withaccounting principles generally accepted in India including the Indian AccountingStandards specified in the Companies (Indian Accounting Standards) Rules 2015 (asamended) under Section 133 of the Act. The Company's Board of Directors is alsoresponsible for ensuring accuracy of records including financial information considerednecessary for the preparation of.

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; the selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error which has been used for the purpose ofpreparation of the standalone Ind AS financial statements by the Directors of the Companyas aforesaid.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. While conducting the audit we have taken into account theprovisions of the Act and the Rules made there under including the accounting standardsand matters which are required to be included in the audit report.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalone IndAS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditors' judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors aswell as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS 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 of the standalone state ofaffairs of the Company as at 31 March 2018 and their standalone profit (including othercomprehensive income) their standalone cash flows and standalone changes in equity forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by ‘the Companies (Auditor's Report) Order 2016' issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act we report to the extent applicable 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 of the aforesaidstandalone Ind AS financial statements;

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) the Cash Flow Statement and the statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

d. In our opinion the aforesaid standalone Ind AS financialstatements comply with theIndian Accounting Standards specified under section 133 of the Companies Act 2013 readwith relevant rules thereunder;

e. On the basis of the written representations received from the directors taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the existence of internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate 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 knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer Note 39 (5.1) to thefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts asat 31 March 2018.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31March 2018.

FOR M/S P G BHAGWAT

Chartered Accountants

Firm Registration Number : 101118W

Nachiket Deo Partner

Membership Number : 117695 Pune Date: 18 May 2018

ANNEXURE A

Referred to in paragraph 1 of our "Report on Other Legal and RegulatoryRequirements" on even date (i) (a) The company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management according to thephased programme of three years which is reasonable with regard to size of the company andnature of its assets.

(c) According to records of the company examined by us the title deeds of immovableproperties are held in the name of the company.

(ii) The management has conducted physical verification of inventory (excluding stockwith third parties) at reasonable Intervals. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. As informed to us the discrepancies noticed on verificationbetween physical stock and book records were not material.

(iii) As informed to us the company has not granted secured or unsecured loan to othercompanies firms or other parties covered in the register maintained under Section 189 ofthe Companies Act 2013. Accordingly the provisions of clause 3 (iii) (a) (b) and (c) arenot applicable to the company.

(iv) According to the information and explanations provided to us there are no loansguarantees and security given by the Company covered under the provisions of section 185of the Companies Act 2013. According to the information and explanations provided to usprovisions of section 186 of the Companies Act 2013 have been complied with respect toinvestment.

(v) In our opinion and according to information and explanation given to us theCompany has not accepted public deposits hence the directive issued by the Reserve Bankof India and the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act and the rules framed there under are not applicable to it. According toinformation and explanation given to us no order has been passed against the company byCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courtor any other tribunal.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersub-section (l) of section 148 of the Companies Act 2013 and we are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of records with a view to determine whether theyare accurate and complete.

(vii) (a) According to information and explanation given to us and the records of thecompany examined by us the company is generally regular in depositing with appropriateauthorities undisputed statutory dues including income tax service tax and other materialstatutory dues applicable to it. According to the information and explanation given to usno undisputed amounts payable in respect of statutory dues were in arrears as at 31 March2018 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us the particulars of duesof income tax sales tax wealth tax service tax custom duty excise duty and cess as at31 March 2018 which has not been deposited on account of disputes are as follows:

Name of the Statue Nature of dispute due Amount under dispute not deposited Period to which amount is related Forum where the dispute is pending
( In Crs.)
Sales Tax Sales tax and penalty for pump set 1.83 1990-1997 2004-2005 High Court
Demand for Disallowance of Claims 0.93 2006-2008 2015-2017 Tribunal
Non receipt of Forms & Disallowance of Credit 5.81 2004-2006 2008-2009 2010-2014 Appellate authority - Up to Commissioner level
Service Tax Disallowance of credit 0.03 2007-2010 High Court
0.02 2006 Tribunal
0.54 2005-2007 Appellate authority - Up to Commissioner level
2012-2016
Excise Duty Valuation & exemption disputes and disallowance of cenvat credit against the excise duty 5.38 1996-1997 Tribunal
1999-2002
2004-2013
29.80 1996 Appellate authority - Up to Commissioner level
2011-2016
2017-2018
Customs Duty Dispute related to exemption and other matters 0.86 1994-1997 2011-2012 Appellate authority - Up to Commissioner level

(viii) In our opinion and according to information and explanations given to us theCompany has not defaulted in repayment of dues to a financial institution or bank as atthe balance sheet date and also not issued debentures.

(ix) According to the information and explanation given to us the company has notraised money by way of initial public offer or further public offer (including debtinstrument) and not availed term loan during the year. Accordingly the Provisions ofclause 3(ix) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(x) During the course of our examination of the books & records of the companycarried out in accordance with the generally accepted auditing Practices in India andaccording to the information and explanation given to us we have neither come across anyinstances of fraud on or by the company noticed or reported during the year nor have webeen informed of such case by Management.

(xi) According to the information and explanation given to us the company has paidmanagerial remuneration within the limit prescribed under section 197 of the CompaniesAct 2013. Accordingly no requisite approval is required to be sought.

(xii) In our opinion the company is not a Nidhi company. Accordingly the provisionsspecified in Paragraph 3(xii) of Companies (Auditor's Report) order 2016 are notapplicable to the company.

(xiii) According to the information and explanation given to us and in our opiniontransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 and requisite details have been disclosed in the Financial statementsas required by the applicable accounting standards.

(xiv) According to the information and explanation given to us the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures for raising funds during the year. Accordingly the provisions ofclause 3 (xiv) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(xv) According to the information and explanation given to us the company has notentered into a non-cash transaction with any of the directors or persons connected withdirectors. Accordingly the provisions of clause 3 (xv) of the Companies (Auditor'sReport) Order 2016 are not applicable to the company.

(xvi) In our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions in Paragraph 3(xvi) ofCompanies (Auditor's Report) order 2016 are not applicable.

FOR M/S P G BHAGWAT

Chartered Accountants

Firm Registration Number : 101118W

Nachiket Deo Partner

Membership Number : 117695 Pune Date: 18 May 2018

Annexure B to the Independent Auditor's Report of even date on the Standalone FinancialStatements of Kirloskar Oil Engines Limited.

Report on the Internal Financial Controls with reference to Standalone Ind AS FinancialStatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls with reference to Standalone Ind ASFinancial Statements of Kirloskar Oil Engines Limited ("the Company") as of 31March 2018 in conjunction with our audit of the standalone Ind AS financial statements ofthe 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 control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the existenceof internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls Over Financial Reporting

A company'sinternalfinancialcontrol over financial reporting is a process designed toassurance regarding the reliability of financial reporting and external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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

Because of the inherent limitations of internal financial controls over financialreporting with reference to Standalone Ind AS Financial Statements 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 internal financial controls over financial reporting with referenceto Standalone Ind AS Financial Statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to Standalone IndAS Financial may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects internal financial controlswith reference to financial statements and such internal financial controls were operatingeffectively as at 31 March 2018 based on the internal 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.

FOR M/S P G BHAGWAT

Chartered Accountants

Firm Registration Number : 101118W

Nachiket Deo Partner

Membership Number : 117695 Pune Date: 18 May 2018