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Enkei Wheels India Ltd.

BSE: 533477 Sector: Auto
NSE: N.A. ISIN Code: INE130L01014
BSE LIVE 15:40 | 15 Dec 368.20 2.45
(0.67%)
OPEN

371.95

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374.00

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365.20

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 371.95
PREVIOUS CLOSE 365.75
VOLUME 2363
52-Week high 464.00
52-Week low 158.00
P/E 125.67
Mkt Cap.(Rs cr) 548
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 371.95
CLOSE 365.75
VOLUME 2363
52-Week high 464.00
52-Week low 158.00
P/E 125.67
Mkt Cap.(Rs cr) 548
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Enkei Wheels India Ltd. (ENKEIWHEELS) - Auditors Report

Company auditors report

To

The Members

Enkei Wheels (India) Limited.

Report on the Financial Statements

1. We have audited the accompanying financial statements of Enkei Wheels (India)Limited ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements.

2. The Company's Board of Directors and management are responsible for thematters stated in section 134(5) of the Companies Act 2013 ("the Act") withrespect to the preparation of these financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules 2016("the Rules").

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other regularities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors Responsibility

3. Our responsibility is to express an opinion on these 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 and the Order under section 143(11) ofthe Act.

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.

4. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements. The procedures selected depend on theauditor's judgment 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 true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors and management as well as evaluating the overallpresentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the financial statements.

Emphasis of Matter:

6. a) The Company has followed the useful lives of the assets prescribed under Part Cof Schedule II to the Companies Act 2013 for calculation of depreciation in respect ofits fixed assets(s). It has neither reviewed useful lives of all its assets nor determineduseful lives of significant components of all its principal assets separately as requiredunder amended Accounting Standard (AS) -10 'Property Plant and Equipment' notified andduly amended under the Companies (Accounting Standard) Amendment Rules 2016 in itsentirety as useful lives of only some of its assets /components have been reviewed anddepreciation has been provided accordingly.

b) The Company has not tested its fixed assets for impairment as required under -Accounting Standard (AS) -28 "Impairment of Assets" read with amendedAccounting Standard (AS) -10. The Company's management believes that there is noindication of potential impairment loss as of the March 31 2017.

Opinion

7. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 March 31 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of sub-section (11) of Section 143of the Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

9. As required by Section 143(3) of the Act we report that :

(a) Except for the matters described under 'Emphasis of Matter' paragraph above andfor the reasons stated therein we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof 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 financial statements comply in all materialrespects with the Accounting Standards specified under section 133 of the Act read withthe Rules as applicable except and to the extent referred under 'Emphasis of Matter'paragraph above.

(e) On the basis of written representations received from the Directors as on March312017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 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 .

(g) With respect to other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 33(k) to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses under the applicable law or accounting oraccounting standards.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes (SBN) during the period from November08 2016 to December 30 2016 and these are in accordance with the books of accountmaintained by the Company. Refer Note 33(m) to the financial statements;

For Asit Mehta & Associates

Chartered Accountants

Registration No. 100733W

Sanjay S. Rane

Partner

Membership No.100374

Place : Pune

Date : May 25 2017

ANNEXURE- A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 8 under the heading 'Report on Other Legal and RegulatoryRequirements of our report of even date on the financial statements of Enkei Wheels(India) Limited ('the Company') for the year ended March 31 2017).

Report on Companies (Auditor's Report) Order 2016 ("the Order") issued bythe Central Government in terms of Section 143 (11) of the Companies Act 2013 ('the Act)

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

(i) (a) The Company has generally maintained proper records showing particularsincluding quantitative details and situation of its fixed assets.

(b) In our opinion and according to the information and explanations given to us someof the fixed assets have been physically verified by the Company's management as a part ofthe Company's plan of verification of all its fixed assets over a period three years. Weare informed that discrepancies noticed on physical verification have been properly dealtwith in the books of account.

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

(ii) The inventories comprising semi-finished goods raw materials stores and sparesetc. have been physically verified by the Company's management during the year. In ouropinion the frequency of verification is reasonable. The discrepancies noticed onphysical verification of inventory as compared to book records were not material and havebeen properly dealt with in the account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loan secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013.Accordingly the provisions of clause (iii) (a) (b) & (c) of paragraph 3 of the Orderare not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany does not have any transactions to which the provisions of section 185 of the Actapply. There are no loans investments guarantees and security by a company to any personor other body corporate contemplated by the provisions section 186 of the Act.

Accordingly the provisions of clause (iv) of paragraph 3 of the Order are notapplicable to the Company.

(v) The Company has not accepted any deposits from the public and does not haveunclaimed deposits within the meaning of the provisions of section 73 to 76 of theCompanies Act 2013 Act and rules framed thereunder. Accordingly the provisions of clause(v) of paragraph 3 of the Order are not applicable to the Company.

(vi) According to the information and explanations given to us and in our opinionmaintenance of cost records has not been specified by the Central Government under subsection (1) of section 148 (1) of the Companies Act 2013 and the Companies (Cost Recordsand Audit) Rules 2014. Accordingly the provisions of clause (vi) paragraph 3 of theOrder are not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing of the amounts deducted / accrued in its books of account in respect ofundisputed statutory dues including provident fund employees' state insuranceincome-tax service tax duty of customs duty of excise sales-tax value added tax cessand other material statutory dues as applicable to it to the appropriate authorities.

According to the records of the Company and according to the information andexplanations given to us no undisputed amounts payable in respect of statutory duesreferred above were in arrears as at March 31 2017 for a period of more than six monthsfrom the date those became payable.

(b) According to the information and explanations given to us there are no dues ofincome-tax service tax duty of customs duty of excise sales-tax value added tax cesswhich have not been deposited on account of any dispute other than those mentioned below.

Name of the Statue/nature of Dues Period to which the amount relates Amount involved (`) Forum where dispute is pending
Value Added Tax 2010-11 53428525/- Joint Commissioner of Sales Tax (Appeals) 2 Pune

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans or borrowing to banks. There are no loans or borrowings from financialinstitutions or government and has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to usmoneys raised by way of term loans by the Company have prima-facie been applied for thepurposes for which those were raised. The Company has not raised moneys by way of initialpublic offer or further public offer.

(x) According to the information and explanations given to us and to the best of ourknowledge no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company has paid / provided the managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V of the Act.

(xii) The Company is not the Nidhi Company and therefore the provisions of clause (xii)of paragraph 3 of the Order are not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company transactions with therelated parties are in compliance of with section 177 and 188 of the Act where applicableand the details of which have been disclosed in the financial statements etc as requiredby the applicable accounting standards.

(xiv) The Company has made preferential allotment during the year under audit which isin compliance of the requirement of section 42 of Act and the amount raised have prima-facie been used for the purpose for which the funds were raised.

(xv) In our opinion an according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with the and therefore the provisions of section 192 of the Companies Act 2013are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of paragraph 3 of theOrder are not applicable to the Company.

For Asit Mehta & Associates
Chartered Accountants
Registration No. 100733W
Sanjay S. Rane
(Partner)
Membership No. 100374
Place : Pune
Date : May 25 2017

ANNEXURE- B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 8 (f) of our report of even date on the financial statementsof Enkei Wheels (India) Limited ('the Company') for the year ended March 31 2017)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of EnkeiWheels (India) Limited ("the Company"') as of March 31 2017 in conjunction withour audit of the 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 ('the Guidance Note'').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial information 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls over financial reporting both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 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

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.

According to the information and explanations given to us and based on our audit thefollowing deficiencies & weaknesses have been identified in internal financialcontrols over financial reporting as at March 31 2017.

a) The existing rules policies and some of its key business processes including thatin respect of assets and related expenditure have remained to be documented updated andstrengthened to cover all components and facets of internal control.

The Company needs to improve upon the policy documentation and related controls toensure proper accounting classification and the safeguarding of all its properties andassets from loss damage misappropriation etc.

We have been advised that the Company's management has already initiated some steps inthis regard.

b) The Company does not have risk assessment framewok & mitigation plan at presentto address the risks - both current and potential. The Company inter alia has beenincurring foreign exchange losses which are quite substantial and which have erodedsizable part of the Company's net worth.

The Company needs to ensure of its sustainability business continuity and overallfinancial health of the Company in the medium term.

We have been advised that the Company's management has already initiated some steps inthis regard.

Opinion

In our opinion and to the best of our information and according to the explanationgiven to us the Company has except for the matters stated above in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as atMarch 31 2017 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note.

For Asit Mehta & Associates
Chartered Accountants
Registration No. 100733W
Sanjay S. Rane
Partner
Membership No.100374

 

Place : Pune
Date : May 25 2017