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Century Enka Ltd.

BSE: 500280 Sector: Industrials
NSE: CENTENKA ISIN Code: INE485A01015
BSE 00:00 | 23 Jul 243.05 6.75
(2.86%)
OPEN

236.40

HIGH

244.40

LOW

236.40

NSE 00:00 | 23 Jul 243.55 6.65
(2.81%)
OPEN

234.40

HIGH

245.45

LOW

234.40

OPEN 236.40
PREVIOUS CLOSE 236.30
VOLUME 11111
52-Week high 408.00
52-Week low 228.40
P/E 10.54
Mkt Cap.(Rs cr) 531
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 236.40
CLOSE 236.30
VOLUME 11111
52-Week high 408.00
52-Week low 228.40
P/E 10.54
Mkt Cap.(Rs cr) 531
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 Audit of 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 31st March2018 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flows Statement for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "Ind AS financial statements").

Management's Responsibility for the 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 changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards ("Ind AS")prescribed under Section 133 of the Act.

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; selection and application ofappropriate accounting policies; making judgements 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 of theaccounting records relevant to the preparation and presentation of the Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Auditor's 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 the auditor's judgmentincluding the assessment of the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of the Ind ASfinancial 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 Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion 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 Ind AS financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India including the Ind AS of the state of affairs ofthe Company as at 31st March 2018 its profit (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to Note 44 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 advice andmerits of the case no provision has been considered necessary by the Company. The finaldetermination of the cash outflow if any would depend upon the final decision of theappropriate authorities in the future. Our opinion is not modified in respect of thematter.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

b) I n 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 Statement of Changes inEquity and Cash Flow Statement and dealt with by this Report are in agreement with thebooks of account.

d) I n our opinion the Ind AS financial statements comply with the Indian AccountingStandards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none ofthe directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

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 Ind AS financial statements - Refer Note 44 (a) to the Ind AS financialstatements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on derivative contracts - Refer Note45 to the Ind AS financial statements. The Company did not have any other long-termcontracts for which 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.

iv. The disclosures in the Ind AS financial statements regarding holdings as well asdealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made since they do not pertain to the financial year ended 31 March2018.

For Khimji Kunverji & Co.
Chartered Accountants
Firm's Registration No: 105146W
Gautam V. Shah
Mumbai Partner
3rd May 2018 Membership No: 117348

Annexure A to the Independent Auditors' Report - 31st March 2018 (Referredto in our report of even date)

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 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 physically verified by the management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material.

iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable to theCompany.

iv. The Company has not granted any loans or provided any guarantees or security to theparties covered under section 185 of the Act. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofSection 186 of the Act with respect to the loans given investments made guaranteesgiven and security provided.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

vi. We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofproducts manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

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 Goods and Services Tax Duty of CustomsDuty of Excise Value Added Tax Cess and other material statutory dues have beenregularly deposited 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-Tax Service Tax Goodsand Services Tax Duty of Customs Duty of Excise Value Added Tax Cess and othermaterial statutory dues were in arrears as at 31st March 2018 for a period ofmore than six months from 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 31st March 2018 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* (' in Lacs)
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
Central Excise Act 1944 Excise Duty and penalty Custom Excise and Service Tax 2000 to 2003 45154#
Appellate Tribunal 1995-1996 66
2007-08 to 2010-11 & 2011-12 196
1999-2000 10
Finance Act 1994 Service Tax Custom Excise and Service Tax Appellate Tribunal 2009-10 to 2013-14 141
Gujarat Sales Tax Act 1969 Sales Tax including interest & penalty The Supreme Court of India 2000-2001 672
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 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 give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration 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 to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

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 them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

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 to the Company.

For Khimji Kunverji & Co.
Chartered Accountants
Firm's Registration No: 105146W
Gautam V. Shah
Mumbai Partner
3rd May 2018 Membership No: 117348

Annexure B to the Independent Auditors' Report of even date on the Ind AS financialstatements of Century Enka Limited - 31st March 2018

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 31st March 2018 in conjunctionwith our audit of the 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 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 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(b) 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 authorisations of management and directors of the Company; and

(c) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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.

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 31st March 2018based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal 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
3rd May 2018 Membership No: 117348