Kirloskar Oil Engines Limited (KOEL) has disclosed a Deed of Family Settlement (DFS) dated September 11, 2009, involving individual members of the Kirloskar family. This disclosure comes after the company obtained a legal clarification from the Securities and Exchange Board of India (SEBI) through a writ petition filed before the Bombay High Court.

Key Points of the Disclosure

• The disclosure follows SEBI's clarification that mere disclosure of an agreement by a listed entity does not imply the company's admission of the agreement being binding or impacting its management, control, or creating any liability.
• KOEL emphasized that it is not a party to the family settlement, has never ratified it, and the deed does not impose any restrictions or create liabilities for the company.
• The family settlement involved the distribution of shares among five family members across various Kirloskar Group companies.

Details of the Family Settlement

The 2009 family settlement involved five key members of the Kirloskar family:

1. Atul Kirloskar
2. Sanjay Kirloskar
3. Vikram Kirloskar
4. Rahul Kirloskar
5. Gautam Kulkarni

The settlement included share transfers, cash payments, and restructuring of holdings through investment companies within the Kirloskar Group.

SEBI's Clarification

SEBI provided a significant clarification during the court proceedings, stating that:

• The mere disclosure of an agreement by a listed entity does not automatically bind the company.
• Such disclosure does not imply the company's admission of the agreement's impact on its management or control.
• Listed entities may include a disclaimer as part of their disclosure.

Company's Stance

In its disclosure, Kirloskar Oil Engines Limited made the following points clear:

• The company is neither a party to the DFS nor has it ever taken the DFS on record.
• KOEL has not ratified or approved the DFS and has not agreed to be bound by it.
• The company does not admit that the DFS has any impact on its management or control.
• The DFS does not impose any restrictions or create any liabilities for KOEL.

Implications

This disclosure by Kirloskar Oil Engines Limited highlights the complex nature of family-owned businesses and the importance of clear communication with shareholders regarding family settlements. It also underscores the regulatory environment's evolving nature, where SEBI's clarifications provide listed entities with more flexibility in disclosing family agreements without necessarily binding the company to such agreements.

The disclosure serves to maintain transparency with investors while protecting the company's interests and clarifying its position regarding the family settlement. This move may help in maintaining investor confidence by clearly delineating the company's obligations and liabilities from those of its promoter family members.

As the Kirloskar Group continues to navigate its corporate structure and family dynamics, this disclosure marks an important step in ensuring clear communication and corporate governance standards.

Kirloskar Oil Engines Limited (KOEL), a prominent player in the manufacturing sector, has recently come under scrutiny from Maharashtra's tax authorities. The company has received a show cause notice from the Office of Deputy Commissioner of State Tax, Pune, Maharashtra, regarding an Input Tax Credit (ITC) mismatch for the financial year 2021-22 under GST regulations.

Details of the Tax Demand

The show cause notice proposes a substantial financial implication for KOEL:

This total demand of approximately Rs 18.7 crore stems from discrepancies identified in the company's Input Tax Credit claims for FY 2021-22.

Company's Response

In response to this development, Kirloskar Oil Engines Limited has stated that it does not foresee any material impact on its financial operations or other activities. This assertion suggests that the company is confident in its position and may be prepared to address the issues raised in the show cause notice.

Regulatory Compliance

As per the regulatory requirements, KOEL has duly informed the stock exchanges about this notice. The company filed an intimation under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This prompt disclosure aligns with the company's commitment to transparency and regulatory compliance.

Recent Corporate Actions

It's worth noting that amid these tax-related developments, Kirloskar Oil Engines Limited continues to progress with its employee stock option plan. The company's Stakeholders Relationship Committee allotted 25,651 fully paid-up equity shares of Rs. 2 each under the 'Kirloskar Oil Engines Limited – Employee Stock Option Plan 2019 [KOEL ESOP 2019]'. This allotment has resulted in a slight increase in the company's issued, subscribed, and paid-up capital.

As the situation unfolds, stakeholders will be keenly watching how Kirloskar Oil Engines Limited addresses the GST-related issues while maintaining its operational momentum. The company's response to the show cause notice and any subsequent developments will be crucial in determining the final outcome of this tax matter.