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Centum Electronics Ltd.

BSE: 517544 Sector: Engineering
NSE: CENTUM ISIN Code: INE320B01020
BSE 00:00 | 25 Mar 442.10 -7.15
(-1.59%)
OPEN

439.00

HIGH

447.95

LOW

430.00

NSE 00:00 | 25 Mar 437.10 -12.45
(-2.77%)
OPEN

445.05

HIGH

445.70

LOW

428.30

OPEN 439.00
PREVIOUS CLOSE 449.25
VOLUME 50
52-Week high 620.00
52-Week low 320.55
P/E
Mkt Cap.(Rs cr) 569
Buy Price 425.00
Buy Qty 6.00
Sell Price 480.00
Sell Qty 1.00
OPEN 439.00
CLOSE 449.25
VOLUME 50
52-Week high 620.00
52-Week low 320.55
P/E
Mkt Cap.(Rs cr) 569
Buy Price 425.00
Buy Qty 6.00
Sell Price 480.00
Sell Qty 1.00

Centum Electronics Ltd. (CENTUM) - Auditors Report

Company auditors report

To the Members of Centum Electronics Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of CentumElectronics Limited (‘the Company') which comprise the Balance Sheet as at March 312018 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (‘Ind AS') specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable 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 standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone 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 of the state of affairs of the Companyas at March 31 2018 of its loss including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 01 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the accounting principles generallyaccepted in India including the Companies (Accounting Standards) Rules 2006 (as amended)specified under section 133 of the Act read with the Companies (Accounts) Rules 2014audited by the predecessor auditor whose report for the year ended March 31 2017 andMarch 31 2016 dated May 30 2017 and May 27 2016 respectively expressed an unmodifiedopinion on those financial statements as adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 (‘the Order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.

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 purpose 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 Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind

AS financial statements comply with the Accounting Standards specified under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended;

(e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2018 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 2 to this report;

(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 standalone Ind AS financial statements – Refer Note 43 to thestandalone Ind AS financial statements;

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 tothe Investor Education and Protection Fund by the Company.

For S.R. Batliboi & Associates LLP

ICAI firm registration number: 101049W/E300004

Chartered Accountants

per Sandeep Karnani
Bengaluru Partner
Date: May 30 2018 Membership number:
061207

"ANNEXURE-1" TO THE INDEPENDENT AUDITOR'S REPORT

Annexure 1 referred to in clause 1 of paragraph I on the ‘Report on Other Legaland Regulatory Requirements' of our report of even date

Re: Centum Electronics Limited (‘the Company')

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) All property plant and equipment have not been physically verified by themanagement of the Company during the year but there is a regular programme of verificationwhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us by the management of theCompany the title deeds of immovable properties included in property plant andequipment's are pledged with the banks in connection with the borrowings and not availablewith the Company. The same has not been independently confirmed by the bank and hence weare unable to comment on the same.

(ii) The inventory except goods in transit has been physically verified by themanagement during the year. In our opinion the frequency of verification is reasonable.No material discrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us by the management ofthe Company the Company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsof clause 3(iii)(a) (b) and (c) of the

Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 of the Act in respect of loans and advances to directorsincluding entities in which they are interested is not applicable. In our opinion andaccording to the information and explanations given to us provisions of section 186 ofthe Act in respect of investments made and guarantees and securities given have beencomplied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance incometax sales-tax service tax duty of customs duty of excise value addedtax goods and service tax cess and other material statutory dues as applicable to theCompany have generally been regularly deposited with the appropriate authorities thoughthere has been slight delays in a few cases.

(b) According to the information and explanations given to us by the management of theCompany no undisputed amounts payable in respect of provident fund employees' stateinsurance income-tax service tax sales-tax duty of customs duty of excise valueadded tax goods and service tax cess and other material statutory dues as applicable tothe Company were outstanding at the year end for a period of more than six months fromthe date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of customs duty of excise value added tax goods andservice tax and cess on account of any dispute are as follows:

Name of the statute Nature of dues Amount (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 52522824 Financial year 2009-2010 to 2014-2015 Commissioner Central Tax (Appeals)
(2657116)*
Customs Act 1962 Non-payment of customs duty 1000000 Financial year 2006-2007 & 2007-2008 Customs Excise And Service Tax Appellate Tribunal (‘CESTAT') Bangalore
Central Excise Act 1944 Disallowance of CENVAT credit availed 9988320 (1000000)* Financial year 2004-2005 and 2005-2006 CESTAT Bangalore
Central Excise Act 1944 Disallowance of CENVAT credit availed 22257402 Financial year CESTAT Bangalore
2010-2011
2011-2012
2012-2013
The Karnataka Stamp Act 1957 Stamp duty 16281302 Financial year 2007-08 The District Registrar Gandhinagar
Registration District
Karnataka Value Commercial tax 548809 Financial year Karnataka Appellate
Added Tax 2003 (164643)* Tribunal (‘KAT')
2009-2010 Bangalore
Karnataka Value Commercial tax 6487682 Financial year KAT Bangalore
Added Tax 2003 (1946305)* 2013-2014 Bangalore

* Amount in parenthesis represents the payment made under protest

(viii) In our opinion and according to the information and explanations given to us bythe management of the Company the Company has not defaulted in repayment of loans orborrowing to a bank.

The Company did not have any outstanding loans or borrowing dues in respect of afinancial institution or to government or dues to debenture holders during the year.

(ix) According to the information and explanations given to us by the management of theCompany the Company has not raised any money way of initial public offer / further publicoffer / debt instruments and term loans hence reporting under clause (ix) of the Order isnot applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us by the management of the Company we report that no fraud by the Company or nofraud on the Company by the officers and employees of the Company has been noticed orreported during the year.

(xi) According to the information and explanations given to us by the management of theCompany the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given to us by the management ofthe Company transactions with the related parties are in compliance with section 177 and188 of the Act where applicable and the details have been disclosed in the notes to thestandalone Ind AS financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.

(xv) According to the information and explanations given to us by the management of theCompany the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP
ICAI firm registration number: 101049W/E300004
Chartered Accountants
per Sandeep Karnani
Bengaluru Partner
Date: May 30 2018 Membership number:
061207

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL 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 March 31 2018 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 Reporting (the‘Guidance Note') issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteand the Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

An audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standaloneInd AS financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone Ind AS financialstatements 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 overfinancial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Ind AS Financial Statements

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation of thestandalone Ind AS financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting with reference to these standalone Ind AS financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone Ind AS financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are beingmade only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingWithReference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalone IndAS financial statements and such internal financial controls over financial reporting withreference to these standalone Ind AS financial statements were operating effectively as atMarch 31 2018 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP
ICAI firm registration number: 101049W/E300004
Chartered Accountants
per Sandeep Karnani
Bengaluru Partner
Date: May 30 2018 Membership number:
061207