Mar 31, 2023
Kirloskar Oil Engines Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Kirloskar Oil Engines Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 as amended (âthe Act'') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of Standalone Financial Statements in accordance with the Standards on Auditing (SAs) as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matter described below to be the key audit matter to be communicated in our report.
Revenue recognition
During the financial year the Company has recognised revenue from contracts with customers for sale of goods and services of H 4,073.04 Crores (Refer Note 30 of Standalone Financial Statements). Revenue is recognised as per revenue recognition policy described in Note 41.4.17
We have identified revenue recognition as a key audit matter since it involves significant management judgement and estimates including whether contracts contain multiple performance obligations which should be accounted for separately. This comprises allocation of the transaction price to each performance obligation and assessing whether the identified performance obligations are satisfied at a point in time or satisfied over a period of time and determining when the control is transferred.
Our audit methodology included the following:
⢠Obtained an understanding and assessed internal controls and its effectiveness with regards to recognition of revenue.
⢠Analysed major streams of revenue of the Company to assess whether the method of revenue recognition is consistent with Ind AS 115 âRevenue from contracts with customers'' and has been applied consistently.
⢠Focused on contract classification, determination of the performance obligations and determination of transaction price including variable consideration for selected samples.
⢠Tested on sample basis whether revenue transactions near to the reporting date have been recognised in the appropriate period based on terms of the contract.
⢠Evaluated and critically analysed on sample basis, the significant judgements and estimates made by the management in applying the accounting policy for allocation of transaction price and the timing of transfer of control.
⢠Critically analysed the adequacy and appropriateness of disclosures required as per Ind AS 115 âRevenue from contracts with customers''.
The Company''s Board of Directors is responsible for the Other Information. The Other Information comprises the information included in the Management Discussion and Analysis, Corporate Governance, Business Responsibility and Sustainability Report and Directors'' Report, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the Other Information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
⢠Conclude on the appropriateness of Management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone 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''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure A''; a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the director is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating
effectiveness of such controls, refer to our separate Report in âAnnexure B'' to this report.
(g) As required by section 197 (16) of the Act, in our opinion and according to information and explanation provided to us, the remuneration paid/ provided for by the company to its directors is in accordance with the provisions of section 197 of the Act and remuneration paid to directors is not in excess of the limit laid down under this section.
(h) With respect to the other matters to be included in the 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 according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 41.5.1 to the financial statements.
(ii) The Company has made provision for material foreseeable losses on long term contracts - Refer Note 29. Further, the Company did not have any long-term derivative contracts as at March 31, 2023.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(iv) The Management has represented that to the best of its knowledge or belief, no funds other than as disclosed in the notes to the financial statements (Refer Note 46) have been advanced or loaned or invested (either from borrowed funds or share premium 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 the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any 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;
(v) The Management has represented that to the best of its knowledge or belief, no funds have been received by the company from any other person(s) or entity(ies) including foreign entities (funding parties) with the understanding, whether recorded in writing or otherwise, that the company shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(vi) Based on the audit procedures considered reasonable and appropriate in the circumstances carried out by us, nothing has come to our notice that has caused us to believe that the representation under clause (iv) & (v) contain any material misstatements.
(vii) The dividend declared and paid during the year by the Company is in compliance with section 123 of the Act.
(viii) No comments have been offered as regards the maintenance of books of account using accounting software which has a feature of recording audit trail (edit log) facility under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 since the said requirements under proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014 are not applicable to the Company for the financial year ended on March 31, 2023.
Chartered Accountants Firm Registration Number: 100515W UDIN: 23113053BGWTAM2389
Partner
Membership Number: 113053 Pune, May 19, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Kirloskar Oil Engines Limited (âthe companyâ), which comprise the Balance Sheet as at March 31, 2022 the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at March 31, 2022 and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of standalone financial statements in accordance with the Standards on Auditing (SAs) as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the standalone financial statementsâ section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Financial Statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matter described below to be the key audit matter to be communicated in our report.
During the financial year the company has recognised revenue from contracts with customers for sale of goods and services of H 3,267.59 Crores (Refer Note 30 of standalone financial statements). Revenue is recognised as per revenue recognition policy described in Note 41.4.17.
We have identified revenue recognition as a key audit matter since it involves significant management judgement and estimates including whether contracts contain multiple performance obligations which should be accounted for separately. This comprises allocation of the transaction price to each performance obligation and assessing whether the identified performance obligations are satisfied at a point in time or satisfied over a period of time and determining when the control is transferred.
Our audit methodology included the following:
⢠Obtained an understanding and assessed internal controls and its effectiveness with regards to recognition of revenue.
⢠Analysed major streams of revenue of the company to assess whether the method of revenue recognition is consistent with âInd AS 115, Revenue from Contracts with customersâ and has been applied consistently.
⢠Focused on contract classification, determination of the performance obligations and determination of transaction price including variable consideration for selected samples.
⢠Tested on sample basis whether revenue transactions near to the reporting date have been recognised in the appropriate period based on terms of the contract.
⢠Evaluated and critically analysed on sample basis, the
significant judgements and estimates made by the
management in applying the accounting policy for allocation of transaction price and the timing of transfer of control.
⢠Critically analysed the adequacy and appropriateness
of disclosures required as per âInd AS 115, Revenue from Contracts with Customersâ.
Other Information
The companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Corporate Governance and Directorsâ Report, but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
The companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the companyâs financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone 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 auditorâs report. However, future events or conditions may cause the company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The standalone financial statements of the company for the year ended March 31, 2021 were audited by the predecessor auditors
P G Bhagwat LLP, Chartered Accountants who expressed an unmodified opinion on those statements vide their audit report dated May 13, 2021.
Our opinion is not modified in respect of this matter.
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of 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 the company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the director is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ to this report.
(g) As required by section 197 (16) of the Act, in our opinion and according to information and explanation provided to us, the remuneration paid/ provided for by the company to its directors is in accordance with the provisions of section 197 of the Act and remuneration paid to directors is not in excess of the limit laid down under this section.
(h) With respect to the other matters to be included in the Auditorâs 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 according to the explanations given to us:
(i) The company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 41.5.1 to the financial statements.
(ii) The company has made provision for material foreseeable losses on long term contracts - Refer Note 29 to the financial statements. Further, the company did not have any long-term derivative contracts as at March 31, 2022.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.
(iv) The management has represented that to the best of its knowledge or belief, no funds other than as disclosed in the notes to the financial statements have been advanced or loaned or invested (either from borrowed funds or share premium 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 the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any 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;
(v) The management has represented that to the best of its knowledge or belief, no funds have been received by the company from any other person(s) or entity(ies) including foreign entities (funding parties) with the understanding, whether recorded in writing or otherwise, that the company shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(vi) Based on the audit procedures considered reasonable and appropriate in the circumstances carried out by us, nothing has come to our notice that has caused us to believe that the representation under clause (iv) & (v) contain any material misstatements.
(vii) The dividend declared and paid during the year by the company is in compliance with section 123 of the Act.
Chartered Accountants Firm Registration Number: 100515W UDIN: 22017532AJFUCR1923
Partner
Membership Number: 017532 Pune, May 19, 2022
Mar 31, 2018
INDEPENDENT AUDITORâS REPORT
TO THE MEMBERS OF KIRLOSKAR OIL ENGINES LIMITED
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements Report on the Standalone Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Kirloskar Oil Engines Limited, (âthe Companyâ) comprising of the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement for the year then ended and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the preparation of these standalone Ind AS financial statements in terms of the requirements of the matters stated in Section 134(5) of the Companies Act, 2013 (hereinafter referred to as âthe Actâ) that give a true and fair view of the standalone financial position, standalone financial performance, standalone cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. The Companyâs Board of Directors is also responsible for ensuring accuracy of records including financial information considered necessary for the preparation of standalone Ind AS financial statements. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which has been used for the purpose of preparation of the standalone Ind AS financial statements by the Directors of the Company, as aforesaid.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well 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 to provide 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 explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the standalone state of affairs of the Company as at 31 March 2018, and their standalone profit (including other comprehensive income), their standalone cash flows and standalone changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by âthe Companies (Auditorâs Report) Order, 2016â, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Aâ a statement 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 best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid standalone Ind AS financial statements;
b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Companies Act, 2013, read with relevant rules thereunder;
e. On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018, 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 to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 39 (5.1) to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts as at 31 March 2018.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2018.
Referred to in paragraph 1 of our âReport on Other Legal and Regulatory Requirementsâ on even date
(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the phased programme of three years which is reasonable with regard to size of the company and nature of its assets.
(c) According to records of the company examined by us the title deeds of immovable properties are held in the name of the company.
(ii) The management has conducted physical verification of inventory (excluding stock with third parties) at reasonable Intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. As informed to us, the discrepancies noticed on verification between physical stock and book records were not material.
(iii) As informed to us, the company has not granted secured or unsecured loan to other companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3 (iii) (a) (b) and (c) are not applicable to the company.
(iv) According to the information and explanations provided to us, there are no loans, guarantees and security given by the Company, covered under the provisions of section 185 of the Companies Act, 2013. According to the information and explanations provided to us, provisions of section 186 of the Companies Act, 2013 have been complied with respect to investment.
(v) In our opinion and according to information and explanation given to us, the Company has not accepted public deposits, hence the directive issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to it. According to information and explanation given to us, no order has been passed against the company by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (l) of section 148 of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of records with a view to determine whether they are accurate and complete.
(vii) (a) According to information and explanation given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including income tax, service tax and other material statutory dues applicable to it.
According to the information and explanation given to us, no undisputed amounts payable in respect of statutory dues were in arrears as at 31 March 2018, 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 dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess as at 31 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 (Rs, In Crs.) |
Period to which amount is related |
Forum where the dispute is pending |
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 2012-2016 |
Appellate authority - Up to Commissioner level |
||
Excise Duty |
Valuation & exemption disputes and disallowance of cenvat credit against the excise duty |
5.38 |
1996-1997 1999-2002 2004-2013 |
Tribunal |
29.80 |
1996 2011-2016 2017-2018 |
Appellate authority - Up to Commissioner level |
||
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, the Company has not defaulted in repayment of dues to a financial institution or bank as at the balance sheet date and also not issued debentures.
(ix) According to the information and explanation given to us, the company has not raised money by way of initial public offer or further public offer (including debt instrument) and not availed term loan during the year. Accordingly, the Provisions of clause 3(ix) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the company.
(x) During the course of our examination of the books & records of the company carried out in accordance with the generally accepted auditing Practices in India and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by Management.
(xi) According to the information and explanation given to us, the company has paid managerial remuneration within the limit prescribed under section 197 of the Companies Act, 2013. Accordingly no requisite approval is required to be sought.
(xii) In our opinion, the company is not a Nidhi company. Accordingly, the provisions specified in Paragraph 3(xii) of Companies (Auditorâs Report) order, 2016 are not applicable to the company.
(xiii) According to the information and explanation given to us and in our opinion transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 and requisite details have been disclosed in the Financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures for raising funds during the year. Accordingly, the provisions of clause 3 (xiv) of the Companies (Auditorâs Report) Order, 2016 are not applicable to the company.
(xv) According to the information and explanation given to us, the company has not entered into a noncash transaction with any of the directors or persons connected with directors. Accordingly, the provisions of clause 3 (xv) of the Companies (Auditorâs Report) Order, 2016 are not applicable to the company.
(xvi) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions in Paragraph 3(xvi) of Companies (Auditorâs Report) order, 2016 are not applicable.
Annexure B to the Independent Auditorâs Report of even date on the Standalone Financial Statements of Kirloskar Oil Engines Limited.
Report on the Internal Financial Controls with reference to Standalone Ind AS Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls with reference to Standalone Ind AS Financial Statements of Kirloskar Oil Engines Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the existence of internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting with reference to Standalone Ind AS Financial Statements, including the possibility of collusion or improper management override of 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 financial reporting with reference to Standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to Standalone Ind AS Financial may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting 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
Mar 31, 2017
INDEPENDENT AUDITORâS REPORT
TO THE MEMBERS OF KIRLOSKAR OIL ENGINES LIMITED Report on the Standalone Financial Statements
We have audited the accompanying Ind AS standalone financial statements of Kirloskar Oil Engines Limited, (âthe Companyâ) which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well 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 to provide 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 explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2017;
(b) in the case of the Statement of Profit and Loss (including other comprehensive income), of the Profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
(d) in case of changes in equity, of the changes in equity for the year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended 31 March 2016 and the transition date opening balance sheet as at 1 April 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us whose report for the year ended 31 March 2016 and 31 March 2015 dated 18 May 2016 and 8 May 2015 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
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 of the Companies Act, 2013, we give in the
âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Companies Act, 2013, read with relevant rules there under;
e. On the basis of written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 40 (6.1) to the financial statements.
ii. The company did not have any long term contract including derivative contract having any material foreseeable losses for which provision was required to be made under the applicable law or accounting standard.
iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures and relying on management representations, the disclosures are in accordance with the books of accounts maintained by the Company. Refer Note 11a (2) to the standalone Ind AS financial statements.
Referred to in paragraph 1 of our âReport on Other Legal and Regulatory Requirementsâ on even date
(I) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the phased programme of three years which is reasonable with regard to size of the company and nature of its assets.
(c) According to records of the company examined by us the title deeds of immovable properties are held in the name of the company.
(ii) The management has conducted physical verification of inventory (excluding stock with third parties) at reasonable Intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. As informed to us, the discrepancies noticed on verification between physical stock and book records were not material.
(iii) As informed to us, the company has not granted secured or unsecured loan to other companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3 (iii) (a) (b) and (c) are not applicable to the company.
(iv) The Company has not entered into any transaction which attracts the provisions of section 185 and 186 of the Companies Act, 2013.
(v) In our opinion and according to information and explanation given to us, the Company has not accepted public deposits, hence the directive issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to it. According to information and explanation given to us, no order has been passed against the company by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (I) of section 148 of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of records with a view to determine whether they are accurate and complete.
(vii) (a) According to information and explanation given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including income tax, service tax and other material statutory dues applicable to it.
According to the information and explanation given to us, no undisputed amounts payable in respect of statutory dues were in arrears as at 31 March 2017, 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 dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess as at 31 March 2017 which has not been deposited on account of disputes are as follows:
Name of the statute |
Nature of dispute due |
Amount under dispute not deposited (Rs, in Crs) |
Period to which the amount is related |
Forum where the dispute is pending |
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 |
6.79 |
2004-2006, 2008-2009, 2014-2015 |
Appellate authority - Up to Commissioner level |
|
Service Tax |
Disallowance of credit |
0.03 |
2007-2010 |
High Court |
0.92 |
2006-2013 |
Tribunal |
||
0.53 |
2004-2007 2012-2016 |
Appellate authority - Up to Commissioner level |
||
Excise Duty |
Valuation & exemption disputes and disallowance of cenvat credit against the excise duty |
5.66 |
1999-2002 2004-2012 |
Tribunal |
29.40 |
1996, 2011-2016 |
Appellate authority - Up to Commissioner level |
||
Customs Duty |
Dispute related to exemption and other matters |
0.86 |
1994-1997, 2011-2012 |
Appellate authority - Up to Commissioner level |
Octroi |
Demand for differential Octroi |
3.66 |
2002-2008 |
Civil Court |
(viii) In our opinion and according to information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank as at the balance sheet date and also not issued debentures.
(ix) According to the information and explanation given to us, the company has not raised money by way of initial public offer or further public offer (including debt instrument) and not availed term loan during the year. Accordingly, the Provisions of clause 3(ix) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the company.
(x) During the course of our examination of the books & records of the company carried out in accordance with the generally accepted auditing Practices in India and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by Management.
(xi) According to the information and explanation given to us, the company has paid managerial remuneration within the limit prescribed under section 197 of the Companies Act, 2013. Accordingly no requisite approval is required to be sought.
(xii) In our opinion, the company is not a Nidhi company. Accordingly, the provisions specified in Paragraph 3(xii) of Companies (Auditor''s Report) order, 2016 are not applicable to the company.
(xiii) According to the information and explanation given to us and in our opinion transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 and requisite details have been disclosed in the Financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures for raising funds during the year. Accordingly, the provisions of clause 3 (xiv) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the company.
(xv) According to the information and explanation given to us, the company has not entered into a non-cash transaction with any of the directors or persons connected with directors. Accordingly, the provisions of clause 3 (xv) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the company.
(xvi) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions in Paragraph 3(xvi) of Companies (Auditor''s Report) order, 2016 are not applicable.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
We have audited the internal financial controls over financial reporting of Kirloskar Oil Engines Limited (âthe Companyâ) as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation 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 financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''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 designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of 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 financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial Control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting 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 No.: 117695 Pune
Date: 10May2017
Mar 31, 2013
We have audited the accompanying financial statements of Kirloskar Oil
Engines Limited, ("the Company") which comprise the Balance Sheet
as at March 31, 2013, and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which the cess is to be paid, no cess is due
and payable by the Company.
Referred to in paragraph 1 of our Report on Other Legal and Regulatory
Requirements of even date
(i) (a) The company has maintained proper records showing full
particulars of fixed assets including quantitative details and
situation of fixed assets.
(b) The fixed assets have been physically verified by the management
according to the phased programme of three years which is reasonable
with regard to size of the company and nature of its assets. Pursuant
to the programme, a portion of the fixed assets has been physically
verified by the management during the year and no significant material
discrepancies between the book records and such physical verification
have been noticed.
(c) According to the information and explanation given to us, the
company has not disposed off major part of fixed assets during the
year.
(ii) (a) The management has conducted physical verification of
inventory (excluding stock with third parties) at reasonable Intervals.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion the Company is maintaining proper records of
inventory. As informed to us, the discrepancies noticed on verification
between physical stock and book records were not material.
(iii) (a) The Company has not granted any loans secured or unsecured to
companies, firms or other parties covered in the register maintained as
per section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4 (iii) (b) (c) and (d) are not applicable to the
company
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained as
per section 301 of the Companies Act, 1956. Accordingly, the provisions
of clause 4 (iii) (f) and (g) are not applicable to the company
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business for the
purchase of the inventory, fixed assets and for the sale of the goods
and services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rs. five lakhs in respect of
any party during the year have been made at the prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) As informed to us the company has not accepted any deposit from
public. Accordingly, the provision of clause 4 (vi) is not applicable
to the company.
(vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not however
made a detailed examination of records with a view to determine whether
they are accurate and complete.
(ix) (a) According to the information and explanations given to us and
the records of the company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including income tax, sales tax, wealth tax, service tax, custom
duty, excise duty, cess and other material statutory dues applicable to
it.
(b) According to information and explanation given to us, the
particulars of dues of income tax, sales tax, wealth tax, service tax,
custom duty, excise duty and cess as at 31st March, 2013 which have not
been deposited on account of a dispute, are as follows:-
Name of Nature of dispute due Amount
the under
statute dispute not
deposited
(Rs. in Crs)
Sales Tax Sales Tax including 0.13
Interest and Penalty as 1.92
applicable
0.12
0.16
Income Income Tax including 3.24
Tax Interest and Penalty as
applicable
Service Service Tax including 0.03
Tax Interest and Penalty as 0.20
applicable 0.01
Excise Excise Duty including 0.65
Duty Interest and Penalty as
applicable 2.47
Custom Custom Duty including 0.22
Duty interest and penalty as 0.86
applicable
Octroi Levy of octroi at higher 3.80
rate and demand of differential
octroi
Name of Statute Period to which the Forum where the dispute
amount related pending
Sales Tax 2008 to 2010 - Supreme Court
1990 to 1997 & 2004-05 - High Court
2006-07 - Tribunal
2004-05, 2005-06 & - Appellate authority
2008-09 Up to Commissioner level
Income Tax 2009-10 Commissioner of Income
Tax (Appeals)
Service Tax 2007 to 2010 - High Court
1997 to 2000, - Tribunal
1997 to 1999
2010-11 - Appellate authority
Up to Commissioner level
Excise Duty 1999 to 2002, 2004 to - Tribunal
2007, 2007-08
1996-97, 2007 to 2013, - Appellate authority
Up to Commissioner Level
Custom Duty 2006-07 - Tribunal
1991-92 - Appellate authority
Up to Commissioner Level
Octroi 2002 to 2008 - Civil Court
(x) As the company is registered for a period less than five years,
clause (x) of paragraph 4 of the Companies (Auditor''s Report) Order,
2003, as amended by the Companies (Auditor''s Report) Order, 2004, is
not applicable for the year.
(xi) In our opinion and according to information and explanation given
to us, the Company has not defaulted in repayment of dues to a
financial institution or bank as at the balance sheet date.
(xii) According to information and explanation given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly, the
provision of clause 4 (xii) of the Companies (Auditor''s Report)
Order, 2003 is not applicable to the company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company.
(xiv) In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in securities. The
company has invested surplus funds in mutual funds. According to the
information and explanation given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. Further, such investments have been held by the
company in its own name except to the extent of the exemption granted
under sec. 49 of the Act.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by
company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) According to the information and explanation given to us the
company has not availed any term loan during the year. Accordingly,
the provisions of clause 4 (xvi) of the Companies (Auditor''s Report)
Order, 2003 are not applicable the company.
(xvii) In our opinion and according to information and explanation
given to us, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) According to information and explanation given to us, the
company has not made any preferential allotment of any shares to
parties and companies covered under Section 301 of the Companies Act,
1956.
(xix) According to information and explanation given to us, the company
has not issued any debentures. Accordingly, the provisions of clause 4
(xix) of the Companies (Auditor''s Report) Order, 2003 are not
applicable the company.
(xx) According to information and explanation given to us, the company
has not made any public issue to raise money during the year.
Accordingly, the provisions of clause 4 (xx) of the Companies
(Auditor''s Report) Order, 2003 are not applicable the company.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instances of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by management.
FOR M/S P. G. BHAGWAT
Chartered Accountants
Firm Registration Number 101118W
Nachiket Deo
Partner
Membership Number : 117695
Pune
Date: 26th April, 2013
Mar 31, 2012
1. We have audited the attached balance sheet of KIRLOSKAR OIL ENGINES
LIMITED as at 31st March 2012, the statement of profit and loss and
cash flow statement of the company for the period ended on that date,
annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. The financial statements of the Company for the year ended 31st
March 2011 were audited by other independent auditor whose report dated
13th May 2011, expressed an unqualified opinion on those statements.
The balances as on 31st March 2011 have been considered as opening
balances for the purpose of these financial statements.
4. As required by the Companies (Auditor's Report) Order, 2003 [as
amended by Companies (Auditor's Report) (Amendment) Order, 2004] issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraph 4 and 5 of the said
Order to the extent applicable.
5. Further to our comments in the Annexure referred to in paragraph 4
above, we report that:
(i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion proper books of account as required by law have
been kept by the company so far as appears from our examination of such
books;
(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of the written representations received from the
directors as on 31st March 2012, and taken on record by the board of
directors, we report that none of the directors is disqualified as on
31st March 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the accounts, read together with the
notes thereon, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(a) in the case of the balance sheet, of the state of affairs of the
company as at 31st March 2012;
(b) in the case of the Statement of Profit and Loss of the Profit for
the year ended on that date;
(c) in the case of the Cash Flow Statement, of the Cash flows for the
year ended on that date.
ANNEXURE
Referred to in paragraph 4 of our report of even date
(i) (a) The company has maintained proper records showing full
particulars of fixed assets including quantitative details and
situation of fixed assets.
(b) The fixed assets have been physically verified by the management
according to the phased programme of three years which is reasonable
with regard to size of the company and nature of its assets. Pursuant
to the programme, a portion of the fixed assets has been physically
verified by the management during the year and no significant material
discrepancies between the book records and such physical verification
have been noticed.
(c) According to the information & explanation given to us, the company
has not disposed off major part of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory (excluding stock with third parties) at reasonable intervals.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion the Company is maintaining proper records of
inventory. As informed to us, the discrepancies noticed on verification
between physical stock and book records were not material.
(iii) (a) The Company has not granted any loans secured or unsecured to
companies, firms or other parties covered in the register maintained as
per section 301 of the Companies Act, 1956. Accordingly, the provisions
of clause 4 (iii) (b) (c) and (d) are not applicable to the company.
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained as
per section 301 of the Companies Act, 1956. Accordingly, the provisions
of clause 4 (iii) (f) and (g) are not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business for the
purchase of the inventory, fixed assets and for the sale of the goods
and services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rs. five lakhs in respect of
any party during the year have been made at the prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) In our opinion and according to the information and explanation
given to us, the company has complied with the directives issued by
Reserve Bank of India and the provisions of section 58A and 58AA or any
other relevant provisions of the act and companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public. According to the information and explanation given to us, no
order has been passed by the Company Law Board or National Company Law
T ribunal or Reserve Bank of India or any court or any other Tribunal
on the company in respect of the aforesaid deposits.
(vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not however
made a detailed examination of records with a view to determine whether
they are accurate and complete.
(ix) (a) According to the information and explanations given to us and
the records of the company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including income tax, sales tax, wealth tax, service tax, custom
duty, excise duty, cess and other material statutory dues applicable to
it.
(b) According to information and explanation given to us, the
particulars of dues of income tax, sales tax, wealth tax, service tax,
custom duty, excise duty and cess as at 31st March, 2012 which have not
been deposited on account of a dispute, are as follows:-
Name of the Nature of
dispute due Amount Period to
which the Forum where the
statute under amount
related dispute is
pending
dispute not
deposited
(Rs In Crs)
Sales Tax Sales Tax
including
Interest and 2.21 2008 to 2010 Supreme Court
Penalty as
applicable 2005-06 Tribunal
2004-05 Appellate
authority
2005-06 &
2008-09. -Up to
Commissioner
level
Income Tax TDS including
Interest and 0.36 2008-09 &
2009-10 Commissioner of
Penalty as
applicable Income Tax
(Appeals)
Service Tax Service Tax
including
Interest 0.20 2007 to 2010 High Court
and Penalty
as applicable 1997 to 2000 Tribunal
2010-11 Assistant
commissioner
Excise Duty Excise Duty
including
Interest 0.84 1990 to 2002,
2004 to Tribunal
and Penalty
as applicable 2007, 2007-08
2007 to 2011,
1996-97 Appellate
authority
- Up to
Commissioner
Level
Custom Custom Duty
including
interest 1.08 1991-92,
2006-07 Appellate
authority
Duty and penalty as
applicable - Up to
Commissioner
Level
Octroi Levy of
Octroi at
higher rate
and 3.80 2002 to 2008 Civil Court
demand of
differential
octroi
(x) As the company is registered for a period less than five years,
clause (x) of paragraph 4 of the Companies (Auditor's Report) Order,
2003, as amended by the Companies (Auditor's Report) Order, 2004, is
not applicable for the year.
(xi) In our opinion and according to information and explanation given
to us, the Company has not defaulted in repayment of dues to a
financial institution or bank as at the balance sheet date.
(xii) According to information and explanation given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly, the
provision of clause 4 (xii) of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
company.
(xiv) In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in securities. The
company has invested surplus funds in mutual funds. According to the
information and explanation given to us, proper records have been
maintained of the transactions and contracts, and timely entries have
been made therein. Further, such investments have been held by the
company in its own name except to the extent of the exemption granted
under sec. 49 of the Act.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by
company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) According to the information and explanation given to us the
company has not availed any term loan during the year. Accordingly,
the provisions of clause 4 (xvi) of the Companies (Auditor's Report)
Order, 2003 are not applicable the company.
(xvii) In our opinion and according to information and explanation
given to us, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) According to information and explanation given to us, the
company has not made any preferential allotment of any shares to
parties and companies covered under Section 301 of the Companies Act,
1956.
(xix) According to information and explanation given to us, the company
has not issued any debentures. Accordingly, the provisions of clause 4
(xix) of the Companies (Auditor's Report) Order, 2003 are not
applicable the company.
(xx) According to information and explanation given to us, the company
has not made any public issue to raise money during the year.
Accordingly, the provisions of clause 4 (xx) of the Companies
(Auditor's Report) Order, 2003 are not applicable the company.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instances of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by management.
FOR M/S P. G. BHAGWAT
Chartered Accountants
F. R. No. 101118W
Nachiket Deo
Partner
Membership No.: 117695
Pune
Date: 26th April, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Kirloskar Oil Engines
Ltd (the "Company") as at 31st March 2011 , and the related Profit and
Loss Account and Cash Flow Statement for the year ended on that date
annexed thereto, which we have signed under reference to this report.
These financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
of India (the Act) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on 31st March , 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March 2011
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
Referred to in paragraph 3 of the Auditors Report of even date to the
members of kirloskar Oil Engines Limited on the financial statements
for the year ended 31st March 2011.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and such physical verification
have been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2 (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weakness have been noticed or
reported.
5. (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by
Reserve Bank of India and the provisions of Sections 58 A and 58AA or
any other relevant provisions of the Act and the Companies (Acceptance
of Deposits) Rules, 1975 with regard to the deposits accepted from the
public. According to the information and explanations given to us, no
Order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal on
the Company in respect of the aforesaid deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection fund, employees
state insurance, income-tax, sales-tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at 31st March 2011 which have not been deposited on
account of a dispute, are as follows:
Name of Nature of the dues Amount under Period to which
the Statue dispute not this amounts
yet deposited relates to
(Rs.)
Sales Tax Sales Tax including 31,103,684 2008 to 2010
interest and penalty 1990 to 1997,
2004-05
as applicable 1995-96 and
2005-06
1996-97,2004 to
2006 and 2010-11
Income Tax Income Tax including - -
interest and penalty
as applicable
Service Tax Service Tax including 5,962,944 1997-2001,2006 to
2009
interest and penalty
as applicable 2005 to 2009
and 2010 - 2011
Customs Custom duty including 10,798,507 1991-92,2006-07
interest and penalty
as applicable
Excise Excise duty including 3,869,343 2000 to 2002,
interest and penalty 2004-05,2007-08
as applicable 1996-97
2003-2007
and 2010 to 2011
Octroi Octroi including interest 38,004,063 2002 to 2008
and penalty as applicable
Name of the Statue Forum where the dispute is pending
Sales Tax Supreme Court
High Court
Tribunal
Appellate Authority
-upto Commissioner s level
Income Tax -
Service Tax Tribunal
Appellate Authority
-upto Commissioner s level
Customs Appellate Authority
-upto Commissioner s level
Excise Tribunal
Appellate Authority
-upto Commissioner s level
Octroi Civil Court
10. As the Company is registered for a period less than five years,
clause (x) of paragraph 4 of the Companies (Auditors Report) Order,
2003, as amended by the Companies (Auditors Report) (Amendment) Order,
2004, is not applicable for the year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
12 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
14. In our opinion, the Company has maintained proper records of
transactions and contracts relating to dealing or trading in shares,
securities, debentures and other investments during the year and timely
entries have been made therein. Further, such securities have been
held by the Company in its own name or are in the process of transfer
in its name, except to the extent of the exemption granted under
Section 49 of the Act.
15. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. There were no debentures issued and outstanding at the year-end.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Dalal & Shah
Firm Registration Number: 102021W
Chartered Accountants
Anish Amin
Partner
Membership Number 40451
Pune: 13th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of KIRLOSKAR ENGINES
INDIALIMITED, as at 31st March, 2010, and the related Profit and Loss
Account for the period ended on that date annexed thereto, which we
have signed under reference to this report. These financial statements
are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
of India (the Act) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us and in consideration of
the scheme of arrangement detailed in Note No 2 in schedule 22 to the
Financial Statements, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on 31s March, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31s March, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(ii) In the case of the Profit and Loss Account, of the profit for the
period ended on that date.
ANNEXURE TO AUDITORS REPORT
Referred to in paragraph 3 of the AuditorsReport of even date to the
members of KIRLOSKAR ENGINES INDIALIMITED on the financial statements
for the year ended 31st March, 2010
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to coverall the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable. Inventories lying with outside parties have
been confirmed by them at the close of the year.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weaknesses have been noticed or
reported.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by
Reserve Bank of India and the provisions of Sections 58A and 58AA or
any other relevant provisions of the Act and the Companies (Acceptance
of Deposits) Rules, 1975 with regard to the deposits accepted from the
public. According to the information and explanations given to us, no
Order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal on
the Company in respect of the aforesaid deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, investor education and protection fund, employees
state insurance, income-tax, sales-tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess as at 31 st March, 2010 which have not been deposited on
account of a dispute, are as follows -
Name of the Nature of dues Amount under
statute dispute not
yet deposited
(Rs.)
Sales Tax Sales tax including 1,334,878
interest and penalty,
as applicable 19,235,425
5,263,737
1,242,015
Income Tax Income tax including 66,001,138
interest and penalty,
as applicable
Service Tax Service tax including 1,937,976
interest and penalty,
as applicable 4,364,119
Customs Customs duty including 10,798,507
interest and penalty,
as applicable
Excise Excise duty including 4,042,297
interest and penalty,
as applicable 2,822,023
Octroi Octroi including interest
and penalty, as applicable 38,004,063
Name of the Period to which Forum where the
statute the amount relates dispute is pending
Sale Tax 2008 to 2010 Supreme Court
1990 to 1997,2004-05 High Court
1995-96 and 2005-06 Tribunal
1996-97,2004 to 2006 Appellate Authority
- upto Commissioners
level
Income Tax 1994-95
1997 to 2001 Tribunal
Service Tax 1997 to 2001,2006 to 2009 Tribunal
2005 to 2009 Appellate Authority -
upto Commissioners
level
Customs 1991-92,2006-07 Appellate Authority -
upto Commissioners
level
Excise 2000 to 2002, Tribunal
2004-05, 2007-08
1996-97 Appellate Authority -
2003 to 2007 upto Commissioners
level
Octori 2002 to 2008 Civil Court
10. As the Company is registered for a period less than five years,
clause (x) of paragraph 4 of the Companies (Auditors Report) Order,
2003, as amended by the Companies (Auditors Report) (Amendment) Order,
2004, is not applicable for the period.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any bank during the period.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In respect of shares, securities, and other investments dealt or
traded by the Company, proper records have been maintained in respect
of the transactions and contracts and timely entries have been made
therein. All the investments at the close of the year are in the
process of being transferred in the name of the Company as detailed in
the Note no 2(B) of Schedule 22 of the Financial Statements.
14. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks orfinancial institutions during the period.
15. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
16. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
17. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the period.
18. The Company has not issued any debentures and hence the company
has not created any security or charge in respect thereof.
19. The Company has not raised any money by public issues during the
period.
20. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
21. Considering the nature of the business, clause (xiii) of paragraph
4 of the Companies (Auditors Report) Order 2003, as amended by the
Companies (Auditors Report) (Amendment) Order, 2004, is not applicable
in the case of the Company for the current period, hence in our opinion
there is no matter which arises to be reported in the aforesaid clause
of the order.
For Dalai & Shah
Firm Registration Number: 102021W
Chartered Accountants
Shishir Dalal
Partner
Membership Number: 37310
Mumbai: 14,th May, 2010