o. PROVISIONS AND CONTINGENT LIABILITIES:
(i) A provision is recognized when an enterprise has a present obligation (legal or constructive) as result of past event and it
is probable that an outflow of embodying economic benefits of resources will be required to settle a reliably assessable
obligation. Provisions are determined based on best estimate required to settle each obligation at each balance sheet
date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due
to the passage of time is recognized as a finance cost.
(ii) Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting obligations under a
contract exceed the economic benefits expected to be received, are recognized when it is probable that an outflow of
resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event,
based on a reliable estimate of such obligation.
(iii) Provisions for warranty-related costs are recognized when the service provided to the customer. Initial recognition is
based on historical experience and the present value of the future estimated obligation. The initial estimate of warranty-
related costs is revised annually. The annual rewinding of interest is recognized in the Statement of Profit and Loss.
(iv) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its
existence in the financial statements.
p. FINANCIAL INSTRUMENTS:
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of
financial asset or financial liability.
(i) Cash and Cash Equivalents:
Cash and Cash Equivalents comprise cash and deposit with banks other than for term deposit earmarked for Bank
Guarantee. The company considers all highly liquid investments including demand deposits with bank with an original
maturity of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
(ii) Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business
whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
(iii) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other
payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the
short maturity of these instruments.
q. IMPAIRMENT:
(i) Financial Assets:
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is
impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company
recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing
transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month
expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset
has increased significantly since initial recognition.
(ii) Investment in Subsidiaries and Associates:
The Company has accounted for its investments in Subsidiaries and Associates at cost less impairment loss ( if any ).
(iii) Other Equity Investments:
All other equity instruments are measured at fair value, with value changes recognised in Statement of Profit and Loss,
except for those equity investments for which the Company has elected to present the value changes in 'Other
Comprehensive Income'.
(iv) Non Financial Assets:
A non financial asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss, if any, is charged to statement of profit and loss, in the year in which an asset is identified as impaired.
r. EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity
shares outstanding during the period are adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all
dilutive potential equity shares.
3) This Company has been dissolved. However, the investment has not been written off pending approvals from Reserve Bank of
India. However full provision has been made for the same.
4) Securities in The Mysore Kirloskar Limited have been written off.
5) Shares held in Kirloskar Proprietary Limited, Kirloskar Trading Pte Limited and Kirloskar Power Equipments Limited (all
unlisted) have been mark to market based on the net asset value of an equity share as at March 31, 2024 and March 31, 2023
as per their latest audited financial statements as of those dates. The differential amounts as on the date of transition has been
recognized in opening reserves and changes thereafter have been recognized as other comprehensive income.
6) Investments in Subsidiaries includes financial guarantee contracts which have been recognised at fair value at the inception in
accordance with Ind AS 109 along with accrued guarantee charges. The carrying value of investments in subsidaries include
fair value of guarantees given by the company on behalf of the subsidiaries and the cumulative value of guarantee charges
recognised as income. No gurantee fees is chargable as per contractual terms.
7) During the year ended March 31,2021, company has made 100% provision of ?6,064 lakhs towards investment in one of its
wholly owned subsidiary Luxquisite Parkland Private Limited.
Foot notes :
1 Preference shares:
a. T he Company had issued cumulative preference shares of ? 100/- each. The preference shareholders did not have
voting rights.
b. 1,176,746 Preference shares (value ? 1,176.75 lakhs) were allotted pursuant to a contract without consideration being
received in cash. These preference shares were allotted to preference share holders of Kaytee Switchgear Limited as
fully paid up pursuant to the Scheme of arrangement approved by the Honorable High Court of Karnataka under sec
391 -394 of the Companies Act, 1956 without payment being received in cash.
c. During the financial year 2014-15 Company issued and allotted 1,595,890 (Fifteen lakh ninety five thousand eight hundred
and ninety) Compulsory Convertible Preference Shares (“CCPS”) of ? 100/-(Rupees one hundred), to Mr. Vijay Ravindra
Kirloskar (Promoter) by way of private placement for a tenor not exceeding 18 months which carried a preferential
cumulative dividend of 0.1% (zero point one per cent) per annum, payable till the date of conversion into equity shares.
777,485 Preference shares were converted into 2,554,156 equity shares of face value of ? 10/- each issued at premium
of ? 20.44 (Rupees twenty and forty four paise) as per the first tranche on February 11, 2016 and 818,405 Preference
shares were converted into 2,688,583 equity shares of face value of ? 10/- each issued at a premium of ? 20.44 (Rupees
twenty and forty four paise) as per the second tranche on September 26, 2016.
2 Equity shares:
a. The Company has only one class of equity shares having a par value of ? 10/- each. Each holder of equity shares is
entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled
to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in
proportion to the equity shares held by the shareholder.
5 Current assets, loans and advances include ? 108.49 Lakhs (as at March 31, 2024 ? 102.56 Lakhs) being rescheduled
advances from certain companies in which certain key managerial personnel are interested. The Company is confident
that these companies will fulfill their obligations and has considered these amounts as good of recovery.
6 During a previous year, the shareholders of the Company at the Annual General Meeting held on September 30, 2013 have
approved an Employee Stock Option Scheme. However, the Company has not issued any options as at March 31,2025
and accordingly, recognition of expense in this respect and requisite disclosures are not applicable.
KEC North America Inc has been dissolved. The investments in and dues from the said company have not been written off, pending
receipt of approvals from Reserve Bank of India. However, full provision has been made for the same. Since the said company
has been dissolved, the same has not been considered for related party disclosures.
($) Provision for investment of Rs. ? 6,064.00 Lakhs had been made during year ended March 31, 2021.
10 OPERATING LEASE (Ind AS 17):
The Company has various operating leases for office facilities, guesthouse and residential premises of employees that are
renewable on a periodic basis, and cancelable at its option. Rental expenses for operating leases included in the financial
statements for the year are ? 200.60 Lakhs (Previous Year ? 173.74 Lakhs).
Foot Note:
Provision in respect of wage settlement has been made on estimated basis and differences if any will be accounted on final
settlement. Further as a matter of abundant caution an estimated provision has been made for contingencies as held in
respect of ongoing litigations as detailed in note 23 and certain probable liability including in respect of customers.
12 Financial risk management objectives and policies:
The entity’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance the entity’s operations to support its operations. The entity’s principal financial assets include trade and
other receivables, rental and bank deposits and cash and cash equivalents that are derived directly from its operations.
The entity is exposed to market risk/credit and liquidity risks. The entity’s senior management oversee the management of
these risks. The board reviews their activities. No significant derivative activities have been undertaken so far.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity
price risk and commodity risk. Financial instruments affected by market risk include deposits, FVTOCI investments and
derivative financial instruments.
The sensitivity analysis in the following sections relate to the positions as at March 31, 2025 and March 31, 2024:
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement
obligations; provisions; and the non-financial assets and liabilities of foreign operations.
The following assumption has been made in calculating sensitivity analysis.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at March 31, 2025 and March 31, 2024 including the effect of
hedgeaccounting.
i. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The company’s exposure to the risk of changes in foreign exchange rates relates primarily to
the some of the vendor payments and customer receivables.
ii. Foreign currency sensitivity:
Every 1% strengthening in the exchange rate between the Indian rupee and the respective currencies for the above
mentioned financial assets/liabilities for the years ended March 31, 2025 and March 31, 2024 would decrease the
Company’s loss and increase the Company’s equity by approximately ? 11.97 Lakhs and ? 15.82 Lakhs respectively. A 1%
weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect. In management’s
opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end
of the reporting period does not reflect the exposure during the year.
13 Fair Value Measurement ( Ind AS 113):
The Financial Instruments of the Company are initially recorded at fair value and subsequently measured at amortized cost
based on the nature and timing of the cash flows.
The Company has not classified any Financial Asset or Liabilities as measured at Fair value through Profit and Loss (FVTPL)
or measured at Fair Value through Other Comprehensive Income (FVTOCI).
Fair value of shares held by the Company in ICICI Bank Limited as at the three reporting dates have been computed based
on its value traded in an active market and constitutes Level 1 in the fair value hierarchy as set out in Ind AS 113. Shares held
by the Company in other entities which are unlisted and not traded in an active market have been valued based on their net
asset value per share as per their latest available audited financial statements with the company. The increase / (decrease) is
recognized in other comprehensive income as at March 31,2025 and March 31,2024 on this count is estimated at ?13.23 Lakhs
and ? 11.92 Lakhs respectively.
The Fair Value of the above financial assets and liabilities are measured at amortized cost which is considered to be
approximate to their fair values.
14 As reported in earlier years Lloyd Dynamowerke GmbH & Co. KG, Germany (LDW), a step down subsidiary of the Company,
incurred substantial losses , thereby eroding its net worth and consequent to the actions of local directors of LDW, insolvency
administrator was appointed by the court in Germany during the preceding year. The Company has been given to understand
that a South Korean company acquired all significant assets, patents, estates, orders and employees of LDW. During the year,
Company entered into Settlement Agreement with Insolvency Administrator of Lloyd Dynamowerke GmbH & Co. KG, Germany
(LDW) for the settlement of all outstanding issues. EUR 125,000 was the settlement amount which KEC has agreed to pay
through this settlement agreement and accordingly Company had disbursed the entire agreed amount and obtained No Due
Confirmation from Insolvency Administrator
15 Wholly owned subsidiaries of the Company have accumulated losses and part/ whole of their net worth have been eroded.
However having regard to the estimated fair value of the assets which these Companies hold, the diminution in value has been
considered as temporary and consequently no provision is required to be recognised in the financial statements.
16 As a measure of restructuring and with the consent of Lead Bank and other Lender Banks under the Joint Lender Forum (JLF)
mechanism, the Company had transferred in the year ended March 31,2015 certain assets comprising of immovable properties,
receivables and inventories to its subsidiaries - Kelbuzz Trading Private Limited, SKG Terra Promenade Private Limited and
SLPKG Estate Holdings Private Limited, which will function as special purpose vehicles to hold such assets, dispose off the same
and pay off certain debts (bank dues) transferred by the Company. The amounts outstanding and due from the subsidiaries as at
March 31, 2025 in respect of the transfer of the assets as mentioned above, other expenses incurred by the subsidiaries
reimbursed by the Company and interest charged totally amounts to ?11,006.09 lakhs (^11,153.84 lakhs as at March 31,2024)
after considering Ind AS adjustments. As on date, the majority of the immovable properties in these subsidiaries have been
disposed off and the debts including the interest thereon have been paid. All the Banks (Financial liabilities) in these subsidiaries
have been paid off. However based on expected credit losses as prescribed under Ind AS as against the incurred loss model
envisaged under earlier GAAP, a sum of ^9,711.00 lakhs has been provided upto March 31,2025 (?8,400.77 lakhs provided upto
March 31,2024).
The Board of Directors in its meeting held on May 23, 2024, has approved the merger of its wholly owned subsidiaries Kelbuzz
Trading Private Limited, SKG Terra Promenade Private Limited, SLPKG Estate Holdings Private Limited and Luxquisite
Parkland Private Limited with the Holding company. The Company has filled the application of merger with NCLT on October 31,
2024.
On April 24, 2025 NCLT issued order to send notices to various statutory departments to raise their objection, if any, within 30
days of receipt of notices. Accordingly notices has been sent on May 06, 2025 by the Company.
17 The net worth (after excluding revaluation reserve) of the group in terms of the consolidated financial statement as at March 31,
2025 consisting of the Company, its subsidiaries and its associate is eroded. The company has repaid all term loans which were
restructured under JLF mechanism. Also the company is in advance stage of negotiation for monetization/disposal of assets
which will improve the working capital and in turn improve the performance in the forthcoming periods. The company is confident
that this funding will have a positive impact on the performance and net worth. Accordingly your directors have prepared these
financial statement of the company on the basis that it is a going concern and that no adjustments are considered necessary to
the carrying value of assets and liabilities.
18 The Company has filed before the Honorable Supreme Court, special leave petition in respect of resale tax and sales tax penalty
of ? 527 lakhs (since merged with the Company) and confirmed by the honorable High Court of Karnataka. The Company has
paid an aggregate amount of ? 298.17 lakhs as at March 31, 2025 against the demand which has been included in disputed
statutory liabilities / taxes paid as reported in Note - 9 to Financial Statements.
19 During the year ended March 31, 2024 Company has closed its branch situated at Kuala Lumpur, Malaysia. Effective date of
closure is September 30, 2023. Closure of Branch has no impact on the operations of the Company.
20 Company has discontinued the component machining activity at unit - 15 situated at Budihal, Bangalore Rural District with
effect from January 22, 2024. Discontinuation has no impact on the operations of the Company. All workers have been
relieved from duty and all their compensation dues have been paid.
a) Debt-Equity ratio: Reduction in borrowings this year decreased the debt-equity ratio, increasing profits.
22. Other Statutory Information:
(i) There are no proceedings initiated or are pending against the Company for holding any benami property under the
prohibition of Benami Property Transaction Act, 1988 and rules made thereunder.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or
any other relevant provisions of the Income Tax Act, 1961)
(viii) Previous year's figures have been regrouped/ rearranged wherever necessary to conform to the current year grouping.
(ix) The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software,
creating an edit log of each change made in the books of account along with the date when such changes were made and
ensuring that the audit trail cannot be disabled and no instance of audit trail feature being tampered with was noted in respect
of accounting software(s) where the audit trail has been enabled. Further, the audit trail been preserved by the company as
per the statutory requirements for record retention.
To be read with our report of even date For and on behalf of the Board of Directors of
For K N Prabhashankar & Co. Kirloskar Electric Company Limited
Chartered Accountants
Firm Regn. No: 004982S
A. Umesh Patwardhan Vijay Ravindra Kirloskar Anand B Hunnur
Partner Executive Chairman Managing Director
Membership No:222945 DIN:00031253 DIN:06650798
Sanjeev Kumar S Mahabaleshwar Bhat
Director Finance & General Manager &
Place: Bengaluru Chief Financial Officer Company Secretary
Date: May 28, 2025 DIN:08673340 Membership No:A21919
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