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Centum Electronics Ltd.

BSE: 517544 Sector: Engineering
NSE: CENTUM ISIN Code: INE320B01020
BSE LIVE 14:08 | 25 Jul 684.50 12.05
(1.79%)
OPEN

675.80

HIGH

690.00

LOW

664.95

NSE 14:03 | 25 Jul 685.10 20.10
(3.02%)
OPEN

667.55

HIGH

695.00

LOW

665.20

OPEN 675.80
PREVIOUS CLOSE 672.45
VOLUME 833
52-Week high 765.00
52-Week low 435.00
P/E 26.36
Mkt Cap.(Rs cr) 875
Buy Price 684.50
Buy Qty 3.00
Sell Price 687.00
Sell Qty 73.00
OPEN 675.80
CLOSE 672.45
VOLUME 833
52-Week high 765.00
52-Week low 435.00
P/E 26.36
Mkt Cap.(Rs cr) 875
Buy Price 684.50
Buy Qty 3.00
Sell Price 687.00
Sell Qty 73.00

Centum Electronics Ltd. (CENTUM) - Auditors Report

Company auditors report

To the Members of Centum Electronics Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of CentumElectronics Limited (‘the Company') which comprise the Balance sheet as at 31March 2017 the Statement of profit and loss and the Cash flow statement for the year thenended and a summary of 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 Section134(5) of the Companies Act 2013 (‘the Act') with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 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 (‘the Order')issued by the Government of India in terms of sub-section (11) of section 143 of the Actwe give in the "Annexure -A" a statement on the matters specified in theparagraphs 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 bestof 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 theCompany 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 statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the Directors as on 31March 2017 taken on record by the Board of Directors none of the Directors isdisqualified as on 31 March 2017 from being appointed as a Director in terms of Section164 (2) of the Act; and

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure -B" ; and

(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 25 to the standalone financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company ; and

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016. However as stated in note 44 to the financial statementsamounts aggregating to Rs.18500 as represented to us by the Management have beenreceived from transactions which are not permitted.

for BSR & Co. LLP
Chartered Accountants
Firm registration number: 101248W/W-100022
Amit Somani
Bangalore Partner
Date: 30 May 2017 Membership Number:
060154

"ANNEXURE-A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in the Auditor's Report to the Members of Centum ElectronicsLimited (‘the Company') for the year ended 31 March 2017. We report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its fixed assets. No material discrepancies wereobserved on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventories except materials-in-transit have been physically verified by theManagement during the year. In our opinion the frequency of verification is reasonable.No material discrepancies were observed on such verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsor Limited Liability Partnership and other parties covered in the register maintainedunder Section 189 of the Companies Act 2013 (‘the Act').

(iv) According to the information and explanations given to us the Company has notgranted loans investments guarantees and security to companies firms or other partiesunder section 185 and 186 of the Act.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government of India for maintenance of cost recordsunder section 148 (1) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales tax Service tax duty of customs duty of excise valueadded tax cess and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Sales taxService tax duty of customs duty of excise value added tax cess and other materialstatutory dues that were in arrears as at 31 March 2017 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofSales tax Service tax and duty of customs which have not been deposited with theappropriate authorities on account of any dispute. According to the information andexplanations given to us the following Income tax value of added tax and duty of excisedues have not been deposited by the Company on account of disputes:

Name of the statute Nature of dues Amount net of paid under protest (Rs.) Period to which amount relates Forum where the dispute is pending
Income Tax Act 1961 Disallowance of exemptions 1893642 Financial year 2007-2008 Commissioner of Income Tax (Appeals) – Bangalore
Central Excise Act 1944 Non – payment of Service tax 52612824 Financial year 2009-2010 to 2014-2015 Commissioner Central Excise
Central Excise Act 1944 Disallowance of Cenvat credit availed 9988320 Financial year 2004-2005 and 2005-2006 CESTAT Bangalore
(1000000)*
Central Excise Act 1944 Disallowance of cenvat credit availed 22257402 Financial year 2010-2011 2011-2012 2012-2013 CESTAT Bangalore
Karnataka Value Added Tax 2005 Commercial tax 548809 Financial year 2009-2010 Joint Commissioner of Commercial Taxes Bangalore
(164643)*
Karnataka Value Added Tax 2005 Commercial tax 6487682 Financial year 2013-2014 Joint Commissioner of Commercial Taxes Bangalore
(1946305)

* Amount in parenthesis represents the payment made under protest

(viii) In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayment of its dues to any banks during the year. TheCompany did not have any outstanding dues to any financial institution or debentureholders or Government during the year.

(ix) According to the information and explanations given to us the Company has notraised moneys by way of initial public offer or further public offer (including debtinstruments) and no term loans have been raised. Accordingly paragraph 3(ix) of the Orderis not applicable.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has beenpaid/provided for in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable

(xiii) According to the information and explanations given to us all the transactionswith the related parties are in compliance with Section 177 and 188 of the Act and thedetails have been disclosed in the standalone financial Statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures under section 42 of the Act during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3 (xvi) of the Order is not applicable.

for BSR & Co. LLP
Chartered Accountants
Firm registration number: 101248W/W-100022
Amit Somani
Bangalore Partner
Date: 30 May 2017 Membership Number:
060154

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF CENTUM ELECTRONICS LIMITED.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of CentumElectronics Limited (‘the Company') as of 31 March 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal controls over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditor's Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal controls based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial controls over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal controls over financial reporting criteria established by the Company consideringthe essential components of internal controls stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

for BSR & Co. LLP
Chartered Accountants
Firm registration number: 101248W/W-100022
Amit Somani
Bangalore Partner
Date: 30 May 2017 Membership Number: