Mar 31, 2022
Kirloskar Pneumatic Company Limited
Report on the Audit of the Financial Statements Opinion
We have audited the financial statements of Kirloskar Pneumatic Company Limited (âthe Companyâ), which comprises the Balance Sheet as at 31st March 2022, the Statement of Profit and Loss (including the Statement of Other Comprehensive Income), the Statement of Changes in Equity, and the 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 financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid the financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under Section 133 of the Act read with Companies (Accounts) Rules, 2014 as amended ("Indian Accounting Standardsâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2022, and profit and other comprehensive income and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the 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 financial statements under the provisions of the Companies Act, 2013 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 opinion on the financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
(Refer note 19, 53.3.1 and 53.4.16 of the accompanying financial statements)
Companyâs revenue comprises of revenue from sale of goods as well as services, including cases where performance obligations are satisfied at a point in time as well as over a period of time.
Revenue recognition has been identified as a key audit matter since it involves management judgment and estimates, and the fact that it is considered to be key metric for evaluation of Companyâs performance.
Our audit procedures included the following:
⢠Obtaining an understanding of and assessing the design, implementation and operating effectiveness of key internal financial controls in relation to revenue recognition.
⢠Assessing the appropriateness of the accounting policies related to revenue recognition with reference to the applicable Indian Accounting Standards.
⢠Testing the revenue transactions recognised during the year by verification of underlying documents on a sample basis.
⢠Testing the appropriateness of contract classification, determination of the performance obligations and determination of transaction price including variable consideration for selected samples.
⢠Testing the supporting documents on a sample basis, for sales transactions recorded during the period closer to the year end to determine whether revenue was recognised in the appropriate period based on the terms of contract.
⢠Assessing the completeness and appropriateness of disclosures relating to revenue recognition as required by the applicable Indian Accounting Standards.
The financial statements of the Company for the year ended March 31, 2021 were audited by another firm of Chartered Accountants under the Companies Act, 2013 who expressed an unmodified opinion, vide their separate reports on financial statements and financial results both dated April 29, 2021.
Information Other than the financial statements and Auditorâs Report thereon
The Companyâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boardâs Report, including annexures
thereto, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our 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.
Responsibility of Management for the Financial Statements
The Companyâs 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 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 principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management 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 management 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 Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system 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 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
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.
Report on Other Legal and Regulatory Requirements
1. A statement on the matters specified in paragraphs 3 and 4 of the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in 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, based on our audit 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 the Statement of Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on 31st March 2022 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Companyâs internal financial controls over financial reporting.
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, 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 pending litigations which may have an impact on its financial position. (Refer Note 41 to the financial statements).
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a. The management has represented that, to the
best of its knowledge and belief, no funds 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 (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b. The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c. Based on audit procedures, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The Company has declared and paid dividend during the year in compliance of Section 123 of the Act.
vi. Requirement of mandatory audit trail in company accounting software is postponed to financial years commencing on or after the 1st April, 2022 specified in notification No. F. No.1/19/2013-CL-V Part III dated 1st April 2021 read along with notification No. G.S.R. 205(E) dated 24th March, 2021 issued by the Ministry of Corporate Affairs. Accordingly, reporting for the same is not applicable.
3. With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
Mar 31, 2019
Report on the Audit of the Standalone Indian Accounting Standards (Ind AS) Financial Statements
Opinion
We have audited the standalone Ind AS financial statements of Kirloskar Pneumatic Company Limited (âthe Companyâ), which comprise the balance sheet as at 31st March, 2019, and 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 Ind AS financial statementsâ.
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 31st March, 2019, and its standalone profit (including Other Comprehensive Income), standalone changes in equity and its standalone cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Ind AS 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 Ind AS financial statements under the provisions of the Companies Act, 2013 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 opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter : The company has trade receivables of Rs. 1835.24 millions as at 31st March, 2019. Refer Note No. 4 in the Financial Statements. The company has sent letters seeking balance confirmation certificates from most material trade receivables during the financial year. Since most of the companyâs principal customers are government entities & public sector undertakings, written balance confirmations are not received. We had informed the management that the identification of doubtfulness, if any, in Trade Receivables is subjective and therefore the period of âGood receivablesâ in some cases extends to one or two years. The management needs to put more objective criteria & tighter norms for the determination of the recoverability. We draw the attention to Note 51(4.7)(v) second para, regarding the companyâs Accounting Policy on impairment of trade receivables.
Response to Key Audit Matter : Audit procedures carried out by auditors : We checked all significant trade receivable accounts for their past history of payments & obtain reasons for the pending cases. We also verified on test basis, the evidence of receipt of material or services by the customers.
Although the companyâs management & officers are making reasonable efforts to obtain information, given the nature of the customers, their practices & the manner in which they release payments, the delay in settlement of trade receivables in few cases is inevitable. Further, retention of receivables in certain cases on some pretext is fairly common. We consider that insisting on the company to make a provision for bad / doubtful debts just because of this delay would tantamount to profit shifting from one year to another. Hence, we consider that the time period of up to two years from bill date to finally determine recoverability is fair & reasonable.
The above mentioned factors have been appropriately considered by us and based on the work performed and the evidence obtained we consider the accounting treatment is appropriate.
Other Information
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Directors Report to the members & Annexures thereto, Report on Corporate Governance, Management Discussion & Analysis, but does not include the standalone Ind AS financial statements and our auditorâs report thereon. Our opinion on the standalone Ind AS 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 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 Ind AS 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 Ind AS Financial Statements
The Companyâs 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 standalone Ind AS financial position, standalone Ind AS financial performance, standalone Ind AS changes in equity and standalone Ind AS cash flows of the Company in accordance with the 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. 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.
In preparing the standalone Ind AS financial statements, management 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 Ind AS 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 Ind AS 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 Companies act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system with reference to 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 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 Ind AS 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 Ind AS financial statements, including the disclosures, and whether the standalone Ind AS 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 significant deficiencies, if any, 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 Ind AS financial statements of the current period 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.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), 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 Annexure 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), and the Cash Flow Statement 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 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 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 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 financial statements - Refer Note 40 to the financial statements;
ii The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE A TO THE AUDITORSâ REPORT
(Referred to in our above report of even date)
i. (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The fixed assets have been physically verified by the Management during the year according to a programme designed to cover all the items once in 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. According to the information and explanations given to us and the records produced to us for our verification, the discrepancies noticed during such physical verification were not material and the same have been properly dealt with in the books of account;
(c) The title deeds of immovable properties, as disclosed in Note 1 to the financial statements, are held in the name of the company;
ii. The physical verification of inventory, excluding stocks with third parties, have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material;
iii. The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
iv. In our opinion and according to the information & explanations given to us, in respect of loans, investments, guarantees, and security, the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
v. In our opinion and according to the information & explanations given to us, the company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. The Company has made & is maintaining cost records as prescribed under Section 148 (1) of the Companies Act, 2013. However, we have not verified the same for completeness or accuracy.
vii. (a) According to the information & explanations given to us & according to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, GST cess and any other statutory dues to the appropriate authorities and there were no arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable ;
(b) According to the information & explanations given to us & according to the records of the company, there are no dues of income tax, sales tax, service tax, duty of customs, excise duty, value added tax or GST which have not been deposited on account of any dispute except :
Name of the Statute |
Nature of dues |
Amount (Rs. millions) |
Period to which amount relates |
Forum |
Excise Duty |
Demand of penalty on reversal of Cenvat Credit not made |
0.2 |
FY 1997-98 to 200102 upto Feb-2002 |
CESTAT, Delhi |
Service Tax |
Wrong availment of CENVAT |
1.28 |
FY 2013-14 |
Commissioner Appeals, Excise & Customs, Nashik |
Customs Duty |
Non compliance of conditions for availing concessional rate of customs duty |
1.45 |
FY 1997-98 |
Asst. Commissioner (Customs) Mumbai |
Non compliance of conditions for availing concessional rate of customs duty |
15.79 15.52 |
FY 2011-12 FY 2012-13 |
Supreme Court DGFT, Pune & Delhi |
|
Sales Tax |
Non- production of C Forms |
0.10 0.74 0.92 57.97 56.17 |
FY 1992-93 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 |
Asst. Commissioner Appeals, Jt.Commissioner Appeals |
Sales Tax |
Demand under Work Contract Tax |
0.47 |
FY 1985-86to1987-88 |
Asst. Commissioner Appeals |
Income Tax |
Provision for Pension Scheme Assessment effects |
6.97 5.79 |
FY 1996-97 FY 2015-16 |
High Court CIT Appeals 7, Pune |
viii. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of loans or borrowing to any financial institutions, banks, Government or dues to debenture holders.
ix. The company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) or any term loan during the year;
x. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year;
xi. Managerial remuneration for the year has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
xii. The company is not a Nidhi Company;
xiii. Based upon the audit procedures performed and information and explanations given by the management, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the IND AS financial Statements etc., as required by the applicable accounting standards;
xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
xv. Based upon the audit procedures performed and information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him within the meaning of the provisions of section 192 of Companies Act, 2013;
xvi. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B to the Independent Auditorsâ Report
Referred to in paragraph 2 (f) under the heading, âReport on Other legal and Regulatory Requirementsâ of our report on even date:
Report on the Internal Financial Controls 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 financial statements of Kirloskar Pneumatic Company Limited (âthe Companyâ) as of 31 March 2019 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 controls with reference to financial statements 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 (âICAIâ). 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 with reference to financial statements 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 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 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 auditorâs judgment, including the assessment of the risks of material misstatement of the IND AS 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 with reference to financial statements
A companyâs internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of IND AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control with reference to financial statements 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 IND AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the IND AS financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial statements
Because of the inherent limitations of internal financial controls with reference to 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements 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 controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2019, based on the internal controls with reference to financial statements 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
Firmâs Registration Number 101118W
sd/-
Sanjay Athavale
Partner. Membership Number 83374
Pune: Date: 4thMay, 2019
Mar 31, 2018
INDEPENDENT AUDITORâS REPORT TO THE MEMBERS OF KIRLOSKAR PNEUMATIC COMPANY LIMITED
Report on the Standalone IND AS financial statements
We have audited the accompanying standalone IND AS financial statements of Kirloskar Pneumatic Company Limited ("the Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and 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 the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone IND AS financial statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) with respect to the preparation of these standalone IND AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 Act. 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 IND AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 thereunder.
We conducted our audit 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 IND AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the IND AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the 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 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 Directors, as well as evaluating the overall presentation of the 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, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A 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 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, and the Cash Flow Statement 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 (IND AS) specified under Companies (Indian Accounting Standards) Rules, 2015 specified under Section 133 of the Act, read with the Rules of the Companies (Accounts) Rules, 2014.
(e) In our opinion there are no financial transactions or matters which have any adverse effect on the functioning of the company.
(f) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act;
(g) 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 Annexure B;
(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, 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 IND AS financial statements - Refer Note 39 to the IND AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As explained to us, considering the nature of the Fixed Assets, the same have been physically verified by the management at reasonable intervals during the year as per the verification plan adopted by the company, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanations given to us and the records produced to us for our verification, the discrepancies noticed during such physical verification were not material and the same have been properly dealt with in the books of account;
(c) The title deeds of immovable properties are held in the name of the company;
(ii) The physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed during such verification;
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In respect of loans, investments, guarantees, and security the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) In our opinion and according to the information & explanations given to us, the company has not accepted any deposits.
(vi) The Company is maintaining cost records as prescribed under Section 148 (1) of the Companies Act, 2013. However, we have not verified the same for completeness or accuracy.
(vii) (a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and there were no arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable;
(b) According to the records of the company, there are no dues of income tax or sales tax or service tax or duty of customs or excise duty or value added tax which have not been deposited on account of any dispute except :
Name of the Statute |
Nature of dues |
Amount (Rs) |
Period to which amount relates |
Forum |
Excise Duty |
Demand of penalty on reversal of Cenvat Credit not made |
2,00,000 |
FY 1997-98 to 2001-02 upto Feb-2002 |
CESTAT, Delhi |
Service Tax |
Wrong a ailment of CENVAT |
12,79,793 |
FY 2013-14 |
Commissioner Appeals, Excise & Customs, Nashik |
Customs Duty |
Noncompliance of conditions for availing concessional rate of customs duty |
14,54,000 |
FY 1997-98 |
Asst. Commissioner (Customs) Mumbai |
Non-compliance of conditions for availing concessional rate of customs duty |
1,45,88,379 |
FY 2011-12 |
Supreme Court |
Name of the Statute |
Nature of dues |
Amount (Rs) |
Period to which amount relates |
Forum |
Sales Tax |
Non- production of C Forms |
1,02,000 1,22,06,864 2,15,44,210 12,35,47,951 |
FY 1992-93 FY 2010-11 FY 2011-12 FY 2012-13 |
Asst. Commissioner Appeals, Jt. Commissioner Appeals |
Sales Tax |
Demand underwork Contract Tax |
4,75,000 |
FY 1985-86 to1987-88 |
Asst. Commissioner Appeals |
Income Tax |
Provision for Pension Scheme |
69,66,000 |
FY 1996-97 |
High Court |
(viii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of loans or borrowing to any financial institutions, banks, Government or dues to debenture holders.
(ix) The company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) and the term loan raised during the year was applied for the purpose for which it was taken.
(x) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year;
(xi) Managerial remuneration for the year has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
(xii) The company is not a Nidhi Company;
(xiii) Based upon the audit procedures performed and information and explanations given by the management, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the IND AS financial Statements etc., as required by the applicable accounting standards;
(xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
(xv) Based upon the audit procedures performed and information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him within the meaning of the provisions of section 192 of Companies Act, 2013;
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Kirloskar Pneumatic Company Limited ("the Companyâ) as of 31st 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 (âICAIâ). 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.
Auditorsâ 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 "Guidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 ifsuch 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 auditorâs judgment, including the assessment of the risks of material misstatement of the IND AS 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 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 IND AS 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 IND AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the IND AS 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 controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st 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
[ FRN :101118W]
Chartered Accountants
sd/-
(S.S.Athavale)
Partner
Membership No. 83374
Place : Pune
Date : 26th April, 2018
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Kirloskar Pneumatic Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.
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 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 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 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 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Company''s preparation of the 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 Company''s Directors, 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 on the standalone financial statements.
Opinion
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 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 31st March, 2017, and its profit and its 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, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A 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 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) In our opinion there are no financial transactions or matters which have any adverse effect on the functioning of the company.
(f) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;
(g) 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 Annexure B;
(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, 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 financial statements - Refer Note 38 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
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 company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the company.
(Referred to in our above report of even date)
(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As explained to us, considering the nature of the Fixed Assets, the same have been physically verified by the management at reasonable intervals during the year as per the verification plan adopted by the company, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanations given to us and the records produced to us for our verification, the discrepancies noticed during such physical verification were not material and the same have been properly dealt with in the books of account;
(c) The title deeds of immovable properties are held in the name of the company;
(ii) The physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed during such verification;
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In respect of loans, investments, guarantees, and security the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) In our opinion and according to the information & explanations given to us, the company has not accepted any deposits.
(vi) The Company is maintaining cost records as prescribed under Section 148 (1) of the Companies Act, 2013. However, we have not verified the same for completeness or accuracy.
(vii) (a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and there were no arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable;
(b) According to the records of the company, there are no dues of income tax or sales tax or service tax or duty of customs or excise duty or value added tax which have not been deposited on account of any dispute except:
Name of the Statute |
Nature of dues |
Amount (Rs) |
Period to which amount relates |
Forum |
Excise Duty |
Demand of penalty on reversal of Cenvat Credit not made |
18,44,000 |
FY 1997-98 to 200102 upto Feb-2002 |
CESTAT, Delhi |
Service Tax |
Wrong availment of CENVAT |
12,79,793 |
FY 2013-14 |
Asst. Commissioner Central Excise & Customs |
Customs Duty |
Non compliance of conditions for availing concessional rate of customs duty |
14,54,000 |
FY 1997-98 |
Asst. Commissioner (Customs) Mumbai |
Sales Tax |
Non- production of C Forms |
102,000 56,831,414 12,206,864 21,794,210 130,180,480 |
FY 1992-93 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 |
Asst. Commissioner Appeals Jt. Commissioner Appeals |
Sales Tax |
Demand under Work Contract Tax |
475,000 |
FY 1985-86 to1987-88 |
Asst. Commissioner Appeals |
(viii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
(ix) The company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year;
(x) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year;
(xi) Managerial remuneration for the year has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
(xii) The company is not a Nidhi Company;
(xiii) Based upon the audit procedures performed and information and explanations given by the management, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
(xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
(xv) Based upon the audit procedures performed and information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him within the meaning of the provisions of section 192 of Companies Act, 2013;
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For M/S P G BHAGWAT
Chartered Accountants
Firmâs Registration Number : 101118W
sd/-
S S Athavale
Partner
Membership Number 83374
Place : Pune
Date : 9th May, 2017
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Kirloskar Pneumatic Company Limited ("the Company"), which comprise the
Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
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 ("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 and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 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
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 thereunder.
We conducted our audit 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 financial statements
are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and the
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 financial control relevant to the Company''s preparation of the
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
Company''s Directors, 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 on the standalone financial statements.
Basis for qualified opinion
Ministry of Corporate Affairs has directed the company to recover the
remuneration in excess of 5% of the net profits u/s 349 of the
Companies Act 1956, paid to Executive Chairman for FY 2012-13 &
2013-14. Company''s application for payment of minimum remuneration for
the year 2014-15 has been rejected for this reason and therefore
remuneration paid in excess of limits specified in Schedule V of the
Companies Act 2013 also is required to be recovered. Such excess
remuneration amounts to Rs. 200.39 lakhs. The company has filed Form
MR-2 with the Ministry for waiver of the said recovery and therefore
the company has not recovered this amount nor accounted for the
recoverable amount. As a result, the profits of the company for the
year ended 31st March 2016 are lower by Rs. 131.04 lakhs (net of Tax) &
correspondingly the Reserves & Surplus are also lower by the same
amount. (refer Note No. 31)
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, the
aforesaid standalone 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 state of affairs of the Company as at 31st March, 2016, and its
profit and its 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, 2016 issued
by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the Annexure A 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 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) In our opinion there are no financial transactions or matters which
have any adverse effect on the functioning of the company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act;
(g) The qualification relating to the non compliance with the
directions of the Ministry of Corporate Affairs regarding the
remuneration of Executive Chairman are as stated in the Basis for
Qualified Opinion paragraph above.
(h) 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 Annexure B;
(i) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
(Referred to in our above report of even date)
(i) (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
company, which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the
information and explanations given to us and the records produced to us
for our verification, the discrepancies noticed during such physical
verification were not material and the same have been properly dealt
with in the books of account;
(c) The title deeds of immovable properties are held in the name of the
company;
(ii) The physical verification of inventory has been conducted at
reasonable intervals by the management and no material discrepancies
were noticed during such verification;
(iii) The company has not granted any loans, secured or unsecured to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under section 189 of the Companies
Act, 2013.
(iv) In respect of loans, investments, guarantees, and security the
provisions of section 185 and 186 of the Companies Act, 2013 have been
complied with.
(v) In our opinion and according to the information & explanations
given to us, the company has not accepted any deposits.
(vi) The Company is maintaining cost records as prescribed under
Section 148 (1) of the Companies Act, 2013. However, we have not
verified the same for completeness or accuracy.
(vii) (a) According to the records of the company, the company is
regular in depositing undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and any other
statutory dues to the appropriate authorities and there were no arrears
of outstanding statutory dues as on the last day of the financial year
concerned for a period of more than six months from the date they
became payable;
(b) According to the records of the company, there are no dues of
income tax or sales tax or service tax or duty of customs or excise
duty or value added tax which have not been deposited on account of any
dispute except :
Name of the Amount Period to which
Nature of dues Forum
Statute (Rs) amount relates
Excise Duty Demand of
penalty on
reversal of 18,44,000 FY 1997-98 to
2001-02 CESTAT, Delhi
Cenvat Credit
not made upto Feb-2002
Service Tax Wrong
availment of
CENVAT 12,79,793 FY 2013-14 Addn.
Commissioner
Central Excise
& Customs
Customs Non
compliance
of
conditions
for 14,54,000 FY 1997-98 Asst.
Commissioner
Duty availing
concessional
rate of (Customs)
Mumbai
customs duty
Sales Tax Non-
production
of C Forms 102,000 FY 1992-93 Asst.
Commissioner
Appeal
56,831,414 FY 2009-10 Jt.
Commissioner
Appeal
12,207,000 FY 2010-11 Jt.
Commissioner
Appeal
Sales Tax Demand
under Work
Contract
Tax 475,000 AY 1985-86
to 1987-88 Asst.
Commissioner
Appeal
(viii) Based on our audit procedures and on the information and
explanations given by themanagement, we are of the opinion that the
company has not defaulted in repayment of loans or borrowing to a
financial institution, bank, Government or dues to debenture holders.
(ix) The company has not raised any moneys by way of initial public
offer or further public offer (including debt instruments) and term
loans during the year;
(x) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud by the
company or any fraud on the Company by its officers or employees has
been noticed or reported during the year;
(xi) Managerial remuneration for the year has been paid or provided in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act;
(xii) The company is not a Nidhi Company;
(xiii) Based upon the audit procedures performed and information and
explanations given by the management, all transactions with the related
parties are in compliance with sections 177 and 188 of Companies Act,
2013 where applicable and the details have been disclosed in the
Financial Statements etc., as required by the applicable accounting
standards;
(xiv) The company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during
the year under review;
(xv) Based upon the audit procedures performed and information and
explanations given by the management, the company has not entered into
any non-cash transactions with directors or persons connected with him
within the meaning of the provisions of section 192 of Companies Act,
2013;
(xvi) The company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934.
For M/S P G BHAGWAT
Chartered Accountants
Firm''s Registration Number : 101118W
sd/-
S S Athavale
Partner
Membership Number 83374
Place : Pune
Date : 27th April, 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Kirloskar Pneumatic Company Limited ("the Company"), which comprise
the Balance Sheet as at 31st March, 2015, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
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 ("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 and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. 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 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
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 thereunder.
We conducted our audit 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 financial statements
are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and the
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 financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial control system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of the 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 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 financial statements.
Opinion
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 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 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to the following matter in the Notes to the financial
statements:
Chairman's remuneration for FY 2014-15 is in excess of limits laid down
in Schedule V of the Companies Act 2013, and is subject to the approval
of the Central Government (refer Note No. 31)
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 issued
by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the Annexure 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 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, and the Cash
Flow Statement 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 Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) In our opinion there are no financial transactions or matters which
have any adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on 31 March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act;
(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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(Referred to in our above report of even date)
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
company, which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the
information and explanations given to us and the records produced to us
for our verification, the discrepancies noticed during such physical
verification were not material and the same have been properly dealt
with in the books of account.
2. (a) The inventory has been physically verified during the year by
the management, which, is in our opinion, at reasonable intervals.
(b) The procedures of physical verification of inventories 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 records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were noticed on verification
between the physical stock and the book records.
3. The Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013, during the year.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system.
5. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits.
6. The Company is maintaining cost records as prescribed under Section
148 (1) of the Companies Act, 2013. However, we have not verified the
same for completeness or accuracy.
7. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues with the appropriate authorities.
There were no amounts payable in respect of the statutory dues
outstanding, as at the Balance Sheet date for a period of more than
six months from the date they became payable.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, ESI, Sale Tax,
VAT, Income Tax, Customs duty, Wealth Tax, Service Tax, Excise Duty,
Cess and any other statutory dues were outstanding, as at the balance
sheet date for a period of more than six months from the date they
became payable.
(b) According to the records of the Company, there are no dues of Sales
Tax, VAT, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Cess and
Service Tax which have not been deposited on account of any dispute,
except:
Name of the Nature of dues Amount (Rs)
Statute
Excise Duty Demand of penalty on reversal of Cenvat 1,844,000
Credit not made
Customs Duty Non compliance of conditions for availing 1,454,000
concessional rate of customs duty
Sales Tax Non- production of C Forms 102,000
56,831,414
12,207,000
Sales Tax Demand under Work Contract Tax 475,000
Income Tax Disallowance of certain expenditure 712,247
Name of the Period to which Forum
Statute amount relates
Excise Duty FY 1997-98 to 2001-02 CESTAT, Delhi
upto Feb-2002
Customs Duty FY 1997-98 Asst. Commissioner
(Customs) Mumbai
Sales Tax FY 1992-93 Asst.Commissioner Appeal
FY 2009-10 Jt.Commissioner Appeal
FY 2010-11 Jt.Commissioner Appeal
Sales Tax AY 1985-86 to1987-88 Asst.Commissioner Appeal
Income Tax AY 1960-70 to High Court
AY 1978-79
(c) The amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time.
8. The company has no accumulated losses as on the Balance Sheet date.
The company has not incurred cash losses during the financial year
covered by our audit nor during the immediately preceding financial
year.
9. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders.
10. As informed to us, the company has not given any guarantee for
loans taken by others from bank or financial institutions.
11. During the year, Term Loans have not been raised by the company.
12. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
For M/S P G BHAGWAT
Chartered Accountants
Firm's Registration Number : 101118W
sd/-
S S Athavale
Partner
Membership Number 83374
Place : Pune
Date : 7 May, 2015
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of Kirloskar
Pneumatic Company Limited, which comprise the Balance Sheet as at March
31, 2014, 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 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, but not for the purpose of expressing
an opinion on the effectiveness of the entity''s internal control. 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 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 March 31, 2014;
(b) in the case of the Profit and Loss Account, 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, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, 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 such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in our above report of even date)
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
company, which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the
information and explanations given to us and the records produced to us
for our verification, the discrepancies noticed during such physical
verification were not material and the same have been properly dealt
with in the books of account.
(c) During the year, the company has not disposed off major part of the
Fixed Assets.
2. (a) The inventory has been physically verified during the year by
the management, which, is in our opinion, at reasonable intervals.
(b) The procedures of physical verification of inventories 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 records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were noticed on verification
between the physical stock and the book records.
3. (a) The Company has not granted any loans to companies, firms and
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956, during the year. (b) The Company has not
taken any loans from companies, firms and other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956,
during the year.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, 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. (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 five Lacs rupees in respect of any party during the year have been
made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
with the provisions of Sections 58A and 58AA of the Companies Act,
1956, and the rules framed there under.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. The Company is maintaining cost records as prescribed under Section
209 (1) (d) of the Companies Act, 1956. However, we have not verified
the same for completeness or accuracy.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues with the appropriate
authorities. There were no amounts payable in respect of the statutory
dues outstanding, as at the Balance Sheet date for a period of more
than six months from the date they became payable.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Sale Tax, Income Tax, Customs
Tax / Wealth Tax, Excise Duty/Cess and Service Tax were outstanding, as
at the balance sheet date for a period of more than six months from the
date they became payable.
(b) According to the records of the Company, there are no dues of Sales
Tax, Income Tax, Customs Duty/Wealth Tax, Excise Duty/Cess and Service
Tax which have not been deposited on account of any dispute, except:
Name of
the Nature of dues Amount (Rs) Period to which Forum
Statute amount relates
Excise
Duty Demand of
penalty on
reversal of 18,44,000 FY 1997-98 to
2001-02 CESTAT, Delhi
Cenvat Credit
not made upto Feb-2002
Service
Tax Penalty 3,09,556 FY 2003-04 to
05-06 CESTAT, Mumbai
Penalty 2,47,316 FY 2007-08 to
2009-10 Comm. Appeals,
Pune III
"Sales
Tax Non- production
of C Forms 83,000 AY 1992-93 Mumbai High
Court, Mumbai
Sales Tax
Tribunal.
Appeal against
incorrect 5,99,000 AY 2004-05 & Commissioner
Appeal
Assessment
Order 2005-06
Demand under
Works Contract
Tax 1,88,000 AY 1985-86 "Tribunal
Demand under
Works Contract
Tax 2,87,000 AY 1985-86 &
1986-87 High Court
& 1987-88
Income
Tax Disallowance of
certain
expenditure 7,12,247 AY 1960-70 to High Court
AY 1978-79
10. The company has no accumulated losses as on the Balance Sheet
date. The company has not incurred cash losses during the financial
year covered by our audit nor during the immediately preceding
financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders.
12. The Company has not granted 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 funds are
not applicable to the Company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments.
15. As informed to us, the company has not given any guarantee for
loans taken by others from bank or financial institutions.
16. During the year, Term Loans have not been raised by the company.
17. The funds raised on short term basis have not been used for long
term investment.
18. The company has not made preferential allotment of shares during
the year.
19. No money has been raised by debenture issues during the year.
20. No money has been raised by public issues during the year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
For M/S P. G. BHAGWAT
Chartered Accountants
Firm''s Registration Number : 101118W
Sanjay Athavale
Partner
Membership Number 83374
Place : Pune
Date : April 23, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Kirloskar
Pneumatic Company Limited, 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 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 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 March 31,2013;
(b) in the case of the Profit and Loss Account, of the profit forthe
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 ourexamination 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 such cess is to be paid, no cess is
due and payable by the Company.
(Referred to in our above report of even date)
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
company, which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the
information and explanations given to us and the records produced to us
for our verification, the discrepancies noticed during such physical
verification were not material and the same have been properly dealt
with in the books of account.
(c) During the year, the company has not disposed off major part of the
Fixed Assets.
2. (a) The inventory has been physically verified during the year by
the management, which, is in our opinion, at reasonable intervals.
(b) The procedures of physical verification of inventories 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 records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were noticed on verification
between the physical stock and the book records.
3. (a) The Company has not granted any loans to companies, firms and
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956, during the year. (b) The Company has not
taken any loans from companies, firms and other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956,
during the year.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no majorweakness has been noticed in the internal control
system.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, 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. (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 five Lacs rupees in respect of any party during the year have been
made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
with the provisions of Sections 58Aand 58AAof the Companies Act, 1956,
and the rules framed there under.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. The Company is maintaining cost records as prescribed under Section
209 (1) (d) of the Companies Act, 1956. However, we have not verified
the same for completeness or accuracyA
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues with the appropriate
authorities. There were no amounts payable in respect of the statutory
dues outstanding, as at the Balance Sheet date for a period of more
than six months from the date they became payable.
According to the information and explanations given to us, no
undisputed amounts payable in respect of
Sale Tax, Income Tax.Tlustoms Tax/Wealth Tax, Excise Duty/Cess and
Service Tax were outstanding, as at
the balance sheet date for a period of more than six months from the
date they became payable. 10. The company has no accumulated losses
as on the Balance Sheet date. The company has not incurred cash losses
during the financial year covered by our audit nor during the
immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders.
12. The Company has not granted 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 funds are
not applicable to the Company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments.
15. As informed to us, the company has not given any guarantee for
loans taken by others from bank or financial institutions.
16. During the year, Term Loans have not been raised by the company.
17. The funds raised on short term basis have not been used for long
term investment.
18. The company has not made preferential allotment of shares during
the year.
19. No money has been raised by debenture issues during the year.
20. No money has been raised by public issues during the year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
For M/S P. G. BHAGWAT
Chartered Accountants
Firm''s Registration Number: 101118W
Sanjay Athavale
Partner
Membership Number 83374
Place : Pune
Date: April 24, 2013
Mar 31, 2012
1. We have audited the attached balance sheet of KIRLOSKAR PNEUMATIC
COMPANY LIMITED, as at 31 st March, 2012, and also the profit and loss
account and the cash flow statement for the year 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 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.
The financial statements of the Company for the year ended 31 st March,
2011 were audited by other independent auditor whose report dated 27th
April, 2011, expressed an unqualified opinion on those statements. The
audited balances as on 31st March, 2011 have been considered as opening
balances for the purpose of these financial statements.
3. 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 paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to 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 purposes 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
those books;
(iii) The balance sheet and profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the balance sheet and profit and loss account and
the 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 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 financial statements 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 31 st March, 2012;
(b) in the case of the Profit and Loss Account, 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.
(Referred to in our above report of even date)
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the Fixed Assets have been physically verified by the
management during the year and there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. The discrepancies
noticed during such verification have been properly dealt with in the
books of account.
(c) During the year, the company has not disposed off major part of the
Fixed Assets.
2. (a) The inventory has been physically verified during the year by
the management, which, is in our opinion, at reasonable intervals.
(b) The procedures of physical verification of inventories 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 records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were noticed on verification
between the physical stock and the book records.
3. (a) The Company has not granted any loans to companies, firms and
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956, during the year.
(b) The Company has not taken any loans from companies, firms and other
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956, during the year.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, 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.
(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 five Lacs rupees in respect of
any party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
with the provisions of Sections 58A and 58AA of the Companies Act,
1956, and the rules framed there under.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. The Company is maintaining cost records as prescribed under Section
209 (1) (d) of the Companies Act, 1956. However, we have not verified
the same for completeness or accuracy.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues with the appropriate
authorities. There were no amounts payable in respect of the statutory
dues outstanding, as at 31.03.2012 for a period of more than six months
from the date they became payable.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Sales Tax, Income Tax, Custom
Duty / Wealth Tax, Excise Duty / Cess and Service Tax were outstanding,
as at the balance sheet date for a period of more than six months from
the date they became payable.
(b) According to the records of the Company, there are no dues of Sales
Tax, Income Tax, Customs Duty/Wealth Tax, Excise Duty/Cess and Service
Tax which have not been deposited on account of any dispute, except:
Name of the Nature of dues Amount Period to
which Forum
Statute (Rs.) amount
relates
Excise Duty Demand of penalty 18,44,000 FY1997-98
to CESTAT, Delhi
on reversal of
Cenvat 2001-02
upto
Credit not made Feb-2002
Service Tax Penalty 3,09,556 FY 2003-04
to 2005-06 CESTAT, Mumbai
Sales Tax Non-production
of 83,000 AY 1992-93 Mumbai High
C Forms Court, Mumbai
Sales Tax
Tribunal
Appeal against
incorrect 5,99,000 AY 2004-05
and Commissioner
Assessment Order 2005-06 Appeal
Demand under 1,88,000 AY 1985-86 Tribunal
Works Contract
Tax
Demand underwork 2,87,000 AY 1985-86, High Court
Contract Tax 1986-87 and
1987-88
Income Tax Disallowance of
certain 7,12,247 AY 1960-70
to High Court
expenditure AY 1978-79
10. The Company has no accumulated losses as on the Balance Sheet
date. The Company has not incurred cash losses during the financial
year covered by our audit nor during the immediately preceding
financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders.
12. The Company has not granted 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 funds are
not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments.
15. As informed to us, the company has not given any guarantee for
loans taken by others from bank or financial institutions.
16. During the year, Term Loans have not been raised by the company.
17. The funds raised on short term basis have not been used for long
term investment.
18. The Company has not made preferential allotment of shares during
the year.
19. No money has been raised by debenture issues during the year.
20. No money has been raised by public issues during the year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For M/S P G BHAGWAT
Chartered Accountants
Firm Registration Number: 101118W
Sanjay Athavale
Partner
Membership Number: 83374
Pune
April 24,2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Kirloskar Pneumatic
Company Limited (the "Company") as at 31 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 base 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 Pneumatic Company Limited on the financial
statements for the year ended 31sl 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 five 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.
(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, fims 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) Our opinion and acording 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. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. The Company has made a representation to the Central Government
stating that provisions under Section 209(1)(d) of the Companies Act,
1956, are not applicable to the Company as the products manufactured by
the Company are not covered under the said section and the rules made
there under viz: Cost Accounting records (Engineering Industries)
Rules, 1984, Consequently, the cost records have not been made and
maintained.
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
providend 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 31sl March 2011 which have not been deposited on
account of a dispute are as follows:
Name of
the Nature of
statue dues Amount Period to which Forum where
(Rs.) the amount the disputes
relates pending
Sales
Tax Non
production
of C 83,000 AY 1992-93 Commissioner
Forms Appeal
Appeal
against 599,000 AY 2004-05 & Commissioner
incorrect 2005-06 Appeal
Assessment
order
Demand
under 188,000 AY 1985-86 Tribunal
Works
Contract
Tax
Demand
under 287,000 AY 1985-86, High Court
Works
Contract 1986-87 &
Tax 1987-88
Income
Tax Disallo
wance of 712,247 AY 1960-70 to High Court
certain AY 1978-79
expenditure
Service
Tax Additional
Demand 1,706,145 PY 2004-05 to Commissioner
for Payment
of PY 2007-08 Appeal
service tax
gross value
of Inovice
Demand for 420,557 PY 2003-04 to Tribunal
Payment of
service PY 2005-06
tax on gross
value of
Invoice
Excise Demands
received 1,844,000 PY 2002-03, Tribunal
2005-07.
10. The Company has no accumulated losses as at 31st March 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial 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 banks 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. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
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 or financial institutions during the year.
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 year.
18. The Company has not raised any money by public issues during the
year.
19. 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.
20. The other clauses, iii (b), (c), (d), (f) and (g), xiii and xix of
paragraph 4 of the Companies (Auditors Report) Order 2003, as amended
by the Companies (Auditors Report)(Amendment) Order 2004, are not
applicable in the case of the Company for the year, since in our
opinion there is no matter which arises to be reported in the aforesaid
Order.
For Dalai & Shah
Firm Registration Number: 102021W
Chartered Accountants
AnishAmin
Partner
Membership Number40451
Mumbai
April 27,2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of KIRLOSKAR PNEUMATIC
COMPANY LIMITED, as at 31 st March 2010 and the related Profit and Loss
Account and the Cash Flow Statement of the Company 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 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 misstatements. An Audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in 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 ofthe 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 paragraph 4 and 5 of the Order;
4. Further to our comments 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 the report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet and the Profit and Loss Account
and the 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 the written representations received from the
Directors as on 31st March, 2010, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st 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 the affairs of
the Company as at 31 st March, 2010, (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 THE AUDITORS REPORT
Referred to in Paragraph 3 of the Auditors Report of even date to the
Members of KIRLOSKAR PNEUMATIC COMPANY LIMITED on the Financial
Statements for the year ended 31st March, 2010.
On the basis of the records produced to us for our verification /
perusal, such checks as we considered appropriate, and in terms of
information and explanations given to us on our enquiries, we state
that:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets;
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
Company, which is reasonable having regard to the size of the company
and nature of its assets. According to the information and explanations
given to us and the records produced to us for our verification,
discrepancies noticed on such physical verification were not material
and the same have been properly dealt with in the Books of Account;
(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;
(ii) (a) The inventories (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventories lying with third parties, these have substantially
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management as explained to us are, in our opinion, reasonable and
adequate in relation to the size of the Company and the nature of its
business
(c) According to the records produced to us for our verification, we
are of the opinion that the Company is maintaining proper records of
its inventory. Further, the discrepancies noticed on physical
verification of inventories referred to above, as compared to book
records, though not material, have been properly dealt with in the
books of account;
(iii) (a) As per the information and explanation given to us and the
records produced to us for our verification the company has not
granted, secured or unsecured, loans to companies, firms and other
parties covered in the register maintained under section 301 oftheAct.
(b) As per the information and explanation given to us and the records
produced to us for our verification the company has not taken, secured
or unsecured, loans from companies, firms and other parties covered in
the register maintained under section 301 oftheAct.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory and fixed assets and
also for the sale of goods and services. As per the information given
to us, no major weaknesses in the internal controls have been
identified by the management or the internal auditor of the company.
During the course of our audit, nothing had come to our notice that may
suggest a major weakness in internal control systems of the company;
(v) (a) On the basis of the audit procedures applied by us, and
according to the information and explanations given to us on our
enquiries on this behalf and the records produced to us for our
verification, the transactions required to be entered into the register
in pursuance of section 301 of the Companies Act, 1956, have been so
entered;
(b) The transactions so entered, aggregating in excess of Rs. 500,000/-
in respect of each party during the year, have been in our opinion, as
per the information and explanation given to us, made at prices, which
are reasonable, having regard to the prevailing market prices available
with the Company for such transactions or prices at which transaction
for similar goods have been made with other parties at the relevant
time.
(vi) The Company has not accepted any deposits from public in terms of
Section 58A and 58AA of the Act and the rules framed there under.
(vii) On the basis of the internal audit reports broadly reviewed by
us, we are of the opinion that, the Company has an adequate internal
audit system commensurate with the size and nature of its business;
(viii) The Company has made a representation to the Central Government
stating that provisions under Section 209(1 )(d) of the Companies Act,
1956,are not applicable to the Company as the products manufactured by
the Company are not covered under the said section and the rules made
there under viz: Cost Accounting Records (Engineering Industries)
Rules, 1984, Consequently, the cost records have not been made and
maintained;
(ix) (a) According to the records of the Company, the Company has been
generally regular in depositing 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 Statutory dues with the appropriate
authorities;
(b) On the basis of our examination of the documents and records of the
Company and the information and explanations given to us upon our
enquiries in this regards, disputed amounts payable in respect of Sales
Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty/
Cess not deposited with the appropriate authorities are as follows:
Name of the Nature of dues Amount
statute (Rs.)
Sales Tax Non production of C 83,000
Forms
Appeal against 752,000
incorrect
Assessment order
Demand under 188,000
Works Contract Tax
Demand under 287,000
Works Contract Tax
Income Tax Disallowance of 712,000
certain expenditure
Service Tax Additional Demand 2,235,848
for non Payment of
service tax on
export commission
Demand for 308,620
Payment of service
tax on gross value
of Invoice
Excise Demands received 7,725,957
Name of the Period to which the Forum where the
Statue amount relates dispute is pending
Sales Tax AY 1992-93 Commissioner
Appeal
A Y 2004-05 & Commissioner
2005-06 Appeal
AY 1985-86 Tribunal
AY 1985-86, High Court
1986-87 & 1987-88
Income Tax AY 1969-70 to High Court
AY 1978-79
Service Tax P Y 2004-08 Commissioner
Appeal
P Y 2003-06 Tribunal
Excise P Y 2002-03, Tribunal
2005-07.
x) The Company has no accumulated losses as at 31 st March 2010 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
xi) The Company has not defaulted in repayment of dues to banks. The
Company has not borrowed any sums fromFinancial Institutions nor
through Debentures as at the balance sheet date.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) The Company has maintained proper records of transaction and
contracts in respect of investments in securities and timely entries
have been made therein. Further, such securities have been held by the
company in its own name.
xiv) The terms and conditions at which guarantees have been given by
the company for loans taken from financial institutions and/ or banks
by others are, in our opinion, not prejudicial to the interest of the
company.
xv) As per the information and explanations given to us, term loans
obtained by the company, in our opinion, have been applied for the
purpose for which they were obtained;
xvi) 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 upon our enquiries in this regards, the funds
raised on short term basis have not been used for long term investment;
xvii) 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.
xviii) The Company has not issued any debentures and hence the company
has not created any security or charge in respect thereof.
xix) The Company has not raised any money by public issues during the
year.
xx) 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;
In view of the nature of activities carried on by the Company clause no
(xiii) of paragraph 4 of the Companies (Auditors Report) Order 2003,
as amended by the Companies (Auditors Report) (Amendment) Order, 2004,
are not applicable in the case of the Company for the current year,
since in our opinion there is no matter which arises to be reported in
the aforesaid order.
For DALAL & SHAH
Firm Registration Number: 102021W
Chartered Accountants
SHISHIR DALAL
Partner
MUMBAI : April, 28 2010 Membership No: 37310