You are here » Home » Companies » Company Overview » Empire Industries Ltd

Empire Industries Ltd.

BSE: 509525 Sector: Industrials
NSE: N.A. ISIN Code: INE515H01014
BSE 00:00 | 22 Jun 798.95 -1.55
(-0.19%)
OPEN

810.00

HIGH

840.00

LOW

786.05

NSE 05:30 | 01 Jan Empire Industries Ltd
OPEN 810.00
PREVIOUS CLOSE 800.50
VOLUME 1695
52-Week high 920.00
52-Week low 476.00
P/E 19.56
Mkt Cap.(Rs cr) 479
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 810.00
CLOSE 800.50
VOLUME 1695
52-Week high 920.00
52-Week low 476.00
P/E 19.56
Mkt Cap.(Rs cr) 479
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Empire Industries Ltd. (EMPIREINDS) - Auditors Report

Company auditors report

TO THE MEMBERS OF EMPIRE INDUSTRIES LIMITED REPORT ON THE AUDIT OF THE FINANCIALSTATEMENTS

Opinion

We have audited the accompanying financial statements of Empire Industries Limited("the Company") which comprise the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedincluding a summary significantaccounting policies and other of explanatory information(hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards ("Ind AS")prescribed under Section 133 of the act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2020 and itsprofit and total comprehensive income changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is to provide abasis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the year ended 31stMarch 2020. These matters were addressed in the context of our audit of financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matter to be communicated in our report:

1) Adoption of Ind AS 116 Leases

As described in Notes to the financial statements the Company has adopted Ind AS 116Leases (Ind AS 116) in the current year. The application and transition to this accountingstandard is complex and is an area of focus in our audit since the Company has a largenumber of leases with different contractual terms.

Ind AS 116 introduces a new lease accounting model wherein lessees are required torecognise a right-of-use (ROU) asset and a lease liability arising from a lease on thebalance sheet. The lease liabilities are initially measured by discounting future leasepayments during the lease term as per the contract/ arrangement. Adoption of the standardinvolves significant judgements and estimates including determination of the discountrates and the lease term.

Additionally the standard mandates detailed disclosures in respect of transition.

Principal Audit Procedures

Our audit procedures on adoption of Ind AS 116 include:

Assessed and tested new process and controls in respect of the lease accountingstandard (Ind AS 116);

Assessed the Company's evaluation on the identification of leases based on thecontractual agreements and our knowledge of the business;

Upon transition as at 1 April 2019:

Evaluated the method of transition and related adjustments;

Tested completeness of the lease data by reconciling the Company's operating leasecommitments to data used in computing ROU asset and the lease liabilities.

On statistical sample we performed the following procedures: assessed the key termsand conditions of each lease with the underlying lease contracts; and evaluatedcomputation of lease liabilities and challenged the key estimates such as discount ratesand the lease term.

Assessed and tested the presentation and disclosures relating to Ind AS 116 includingdisclosures relating to transition.

Information Other than the Financial Statements and Auditor's Report Thereon appropriate

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report and Shareholder's

Information but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation and presentation of these financialstatements that give a true and fair view of the financial position financial performance total comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the

Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due 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. audit findings The Board of Directors are responsible foroverseeing the Company's financial reporting process.

Auditors' Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions significantdoubt that may cast on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and including significantdeficiencies in anyinternal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report On Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the 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 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 the Statement of Profit and Loss (including other comprehensiveincome) the statement of changes in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct.

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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting. g. With respect to the other matters to be included in the

Auditor's Report in accordance with the requirements of section 197(16) of the Act asamended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act. h. With respect tothe other matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best ofour 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.

(ii) The Company does not have any long-term contracts including derivative contractsfor 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.

Annexure A to the Independent Auditor's Report of even date on the Financial Statementsof EMPIRE INDUSTRIES LIMITED

We report that

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

b) As per the information and explanations given to us Fixed Assets were physicallyverified during the year by the management as per its programme.

The frequency of verification is reasonable and no material discrepancies have beennoticed on such verification.

c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable property are heldin the name of the company.

2. As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals. Stock of Finished Goods Raw Materials stores andspare parts are reported to be physically verified in accordance with the procedurefollowed by the management. No material discrepancy was noticed on physical verificationof stocks by the management as compared to book records.

3. The company has not granted loan to party covered in the register maintained underSection 189 of the Act.

4. In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans given and investment made.

5. The Company has accepted deposits from the public. The directives issued by ReserveBank Of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Companies Act and the Rules framed there under where applicable have been compliedwith.

6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by Central Governmentunder sub – section (1) of Section 148 of the Companies Act 2013 and we are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

7. a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income tax dutyof excise goods and service tax duty of customs value added tax sales tax cess andother statutory dues have been regularly deposited during the year by the Company with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax goods and service tax dutyof customs value added tax sales tax cess and other statutory dues were in arrears asat 31st March 2020 for a period of more than six months from the date theybecame payable.

b) According to the information and explanations given to us and on the basis of ourexamination of books of accounts and records the details of the aforesaid statutory duesas at 31st March 2020 which have not been deposited with the appropriateauthorities on account of any dispute are given below:

Name of Statute Nature of Dues Amount (Rs. in lakhs) Period to which it Relates Forum where dispute is Pending
Income Tax Act 1961 Income Tax Demand 53.18 A.Y. 2010-11 Income Tax Appellate Tribunal - Mumbai
Income Tax Act 1961 Income Tax Demand 83.43 A.Y. 2011-12 Income Tax Appellate Tribunal –Mumbai
Income Tax Act 1961 Income Tax Demand 106.52 A.Y. 2012-13 Commissioner of Income Tax (Appeal)
MVAT Act 2002 VAT / CST dues 58.81* F.Y. 2009- 10 Jt. Commissioner of Sales Tax (A)
MVAT Act 2002 VAT / CST dues 13.10 F.Y. 2014- 15 Jt. Commissioner of Sales Tax (A)

[* Total demand of Rs. 83.51 Lakhs less amount deposited in dispute of Rs. 25.00 Lakhs]

8. According to the information and explanation given to us and based on the documentsand records examined by us the company has not defaulted in repayment of loans due tobanks and financial institutions.

9. In our opinion and on the basis of information and explanations given to us thecompany has not raised money by way of public offer.

The term loans raised by the company were applied for the purposes for which they wereraised.

10. According to the information and explanations given to us no fraud on or by thecompany was noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on theexamination of the records of the

Company the Company has paid/provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.

12. In our opinion and according to the explanations given to us the Company is not aNidhi company. Accordingly paragraph 3(xii) of the order is not applicable. 13. Accordingto the information and explanations given to us and based on our examination of therecords of the

Company transactions with the related parties are in compliance with Section 177 and188 of the Act where applicable and details of such transactions have been disclosed inthe financial statements as required by the applicable Indian accounting standards.

14. According to the information and explanation 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 paid convertible debenturesduring the year and hence reporting under paragraph 3(xiv) of the order is not applicable.

15. 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) ofthe order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

Annexure B to the Independent Auditor's Report of even date on the Financial Statementsof EMPIRE INDUSTRIES LIMITED Report on the Internal Financial Controls over FinancialReporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financial reporting of EmpireIndustries Limited ("the Company") as of March 31 2020 in conjunction with ouraudit 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls 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 ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 judgement 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 appropriate to provide a basisfor our audit opinion on the Company's internal financial controls system over financialreporting.

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 authorisations of management and directors of the company; and

(3) 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.