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Century Enka Ltd.

BSE: 500280 Sector: Industrials
NSE: CENTENKA ISIN Code: INE485A01015
BSE LIVE 15:40 | 24 Nov 337.55 -4.25
(-1.24%)
OPEN

343.20

HIGH

343.25

LOW

336.50

NSE 15:31 | 24 Nov 337.80 -3.80
(-1.11%)
OPEN

345.00

HIGH

345.00

LOW

335.75

OPEN 343.20
PREVIOUS CLOSE 341.80
VOLUME 2786
52-Week high 454.00
52-Week low 256.30
P/E 11.01
Mkt Cap.(Rs cr) 738
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 343.20
CLOSE 341.80
VOLUME 2786
52-Week high 454.00
52-Week low 256.30
P/E 11.01
Mkt Cap.(Rs cr) 738
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Century Enka Ltd. (CENTENKA) - Auditors Report

Company auditors report

TO THE MEMBERS OF CENTURY ENKA LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Century Enka Limited("the Company") which comprise the Balance Sheet as at 31 March 2017 and theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "Ind AS financial statements").

Management's Responsibility for Ind AS 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; the selection andapplication of appropriate accounting policies; making judgments and the estimates thatare reasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at 31 March 2017 and its financial performance including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Emphasis of Matter

We draw your attention to Note 46 to the financial statements regarding the Company'sappeal pending before CESTAT Mumbai against the excise duty demand aggregating Rs. 22927lakh plus interest thereon and penalty of Rs. 22927 lakh. Based on expert legal adviceand merits of the case no provision has been considered necessary by the company. Thefinal determination of the cash outflow if any would depend upon the final decision ofthe appropriate authorities in the future. Our opinion is not modified in respect of thismatter.

Other Matter

The comparative financial information of the Company for the year ended 31 March 2016and the transition date opening Balance Sheet as at 1 April 2015 included in these Ind ASfinancial statements are based on the previously issued statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited byPrice Waterhouse Chartered Accountants (predecessor auditor) for the year ended 31 March2016 and for the year ended 31_ March 2015 whose reports dated 4 May 2016 and 5 May 2015respectively expressed an unmodified opinion on those financial statements as adjustedfor the differences in the accounting principles adopted by the Company on transition tothe Ind AS which have been audited by us. Our opinion is not modified in respect of thismatter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified inparagraphs_3_and_4_of the Order.

1. 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 the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act.

(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.

(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 beincluded in the Auditors' Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has disclosed the impact of pendinglitigations on the financial position in its Ind AS financial statements – Refer Note46 to the Ind AS financial statements; ii. The Company has made provision as requiredunder the applicable law or accounting standards for material foreseeable losses if anyon derivative contracts. The Company has long-term contracts for which there were nomaterial foreseeable losses - Refer Note 47(b) to the Ind AS financial statements; 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 providedrequisite disclosures in the Ind AS financial statements as to holdings as well asdealings in Specified Bank Notes during the period from 8 November 2016 to 30 December2016. Based on audit procedures and relying on the management representation we reportthat the disclosures are in accordance with books of account maintained by the Company andas produced to us by the Management- Refer Note 50 to the Ind AS financial statements.

For Khimji Kunverji & Co.
Chartered Accountants
Firm's Registration No: 105146W
Gautam V. Shah
Mumbai Partner
10 May 2017 Membership No: 117348

Annexure ARs to the Independent Auditor's Report 31st March 2017

(Referred to in our report of even date) i. (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

(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 assets. Pursuant to the programme certain fixedassets were physically verified by the Management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company. ii. The inventory has been physicallyverified by the management at reasonable intervals during the year. In our opinion thefrequency of such verification is reasonable. No material discrepancies noticed onverification between the physical stocks and the book records. iii. In our opinion andaccording to the information and explanations given to us the Company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under Section 189 of the Act. Accordinglyparagraph 3(iii) of the Order is not applicable to the Company. iv. The Company has notgranted any loans or provided any guarantees or security to the parties covered underSection 185 of the Act. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 186 of the Act withrespect to the loans given investments made guarantees given and security provided. v.In our opinion and according to the information and explanations given to us the Companyhas not accepted any deposits from the public during the year in terms of the provisionsof Sections 73 to 76 or any other relevant provisions of the Act and the rules framedthere under. Accordingly paragraph 3(v) of the Order is not applicable to the Company.vi. We have broadly reviewed the books of account maintained by the Company as specifiedunder Section 148(1) of the Act for maintenance of cost records in respect of productsmanufactured by the Company and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete. vii. (a) According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted/accrued in thebooks of account in respect of undisputed statutory dues including Provident FundEmployees' State Insurance Income-tax Sales-tax Service tax Duty of Customs Duty ofExcise Value added tax Cess and other material statutory dues have been regularlydeposited during the year 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 were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company details of dues of Income-tax Sales-taxService tax Duty of Customs Duty of Excise and Value added tax which have not beendeposited as on 31 March 2017 on account of disputes are given below:

Name of the Statute Nature of the Dues Forum where dispute is pending Period to which amount relates Amount* Rs ( In Lakh)
Income Tax Act 1961 Income Tax Interest and Penalty Calcutta high Court A.Y. 2004-2005 118
Income Tax Appellate Tribunal A.Y. 2008-2009 50
The Central Excise Act 1944 Excise duty and Penalty Custom Excise and Service Tax Appellate Tribunal 2000 to 2003 45154#
Excise Duty Custom Excise and Service Tax Appellate Tribunal 1995 -1996 66
Excise duty and Penalty Custom Excise and Service Tax Appellate Tribunal 2007-2008 to 2010 -2011 & 2011-12 196
Excise duty and Penalty Commissioner of Central Excise (A) 2011 to 2015 36
Finance Act 1994 Service Tax Custom Excise and Service Tax Appellate Tribunal 2009-2010 to 2013-2014 141
Gujarat Sales Tax Act 1969 Sales Tax including interest & Penalty The Supreme Court of India 2000 -2001 672
Sales Tax Joint Commissioner of Sales-Tax (A) 2007-2008 13

* net of amounts paid under protest.

# This does not include the interest claimed (not quantified) by the Central exciseauthorities.

viii. According to the information and explanations given to us and based on therecords of the Company the Company has not defaulted in the repayment of loans orborrowings to financial institutions banks government and dues to debenture holders. ix.According to the information and explanations given to us the term loans have beenapplied by the Company during the year for the purposes for which they were obtained. TheCompany did not raise money by way of initial public offer or further public offer(including debt instruments) during the year. x. According to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit. xi. According tothe information and explanations given to us and based on our examination of the recordsof the Company the Company has paid/provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act. xii. In our opinion and according to the information and explanations givento us the Company is not a nidhi company. Accordingly paragraph 3(xii) of the Order isnot applicable to the Company. xiii. According to the information and explanations givento us and based on our examination of the records of the Company transactions with therelated parties are in compliance with Sections 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the Ind AS financial statements asrequired by the applicable accounting standards. xiv. According to the information andexplanations given to us and based on our examination of the records of the Company theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly paragraph 3(xiv) of the Orderis not applicable to the Company. xv. According to the information and explanations givento us and based on our examination of the records of the Company the Company has notentered into non-cash transactions with directors or persons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable to the Company. xvi. Accordingto the information and explanations given to us the Company is not required to beregistered under section 45 IA of the Reserve Bank of India Act 1934. Accordinglyparagraph 3(xvi) of the Order is not applicable to the Company.

For Khimji Kunverji & Co.
Chartered Accountants
Firm's Registration No: 105146W
Gautam V. Shah
Mumbai Partner
10 May 2017 Membership No: 117348

Annexure B to the Independent Auditors' Report – 31 March 2017

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

We have audited the internal financial controls over financial reporting of CenturyEnka Limited ("the Company") as at 31 March 2017 in conjunction with our auditof the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control 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 the company's policies the safeguardingof its 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.

Auditors' 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 issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

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 control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial 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 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 control 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 control over financialreporting includes those policies and procedures that: (a) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (b) 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 (c) 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 controlover 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 control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For Khimji Kunverji & Co.
Chartered Accountants
Firm's Registration No: 105146W
Gautam V. Shah
Mumbai Partner
10 May 2017 Membership No: 117348