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Enkei Wheels India Ltd.

BSE: 533477 Sector: Auto
NSE: N.A. ISIN Code: INE130L01014
BSE 00:00 | 30 Nov 343.00 0.95
(0.28%)
OPEN

354.40

HIGH

354.40

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340.00

NSE 05:30 | 01 Jan Enkei Wheels India Ltd
OPEN 354.40
PREVIOUS CLOSE 342.05
VOLUME 1919
52-Week high 438.95
52-Week low 223.50
P/E 56.51
Mkt Cap.(Rs cr) 617
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 354.40
CLOSE 342.05
VOLUME 1919
52-Week high 438.95
52-Week low 223.50
P/E 56.51
Mkt Cap.(Rs cr) 617
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 of

Enkei Wheels (India) Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Enkei Wheels (India) Limited("the Company") which comprises the Balance Sheet as at 31st December 2020 theStatement of Profit and Loss (including the Statement of Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of significant accounting(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 prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at December 31 the loss and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs)specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withpoliciesandotherexplanatoryinformation these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our 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 of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1 Revenue Recognition: Our audit approach consisted of testing of the design and operating effectiveness of the internal controls and substantive testing in respect of revenue recognition as follows:
Revenue from sale of goods is recognised when control of the products is transferred to the customer and when there are no unfulfilled obligations. Assessing the appropriateness of the accounting policies related to revenue recognition including those relating to price increase/decrease with reference to the applicable accounting standards.
The performance obligations in the contracts are fulfilled at the time of dispatch delivery or upon formal customer acceptance depending on customer terms and conditions. Testing the revenue transactions recognised during the basis.
Revenue is measured at fair value of the consideration of underlying documents on a sample yearbyverification received or receivable after deduction of any discounts/ rebates and any taxes or duties collected on behalf of the government such as goods and services tax. Inspecting key customer contracts/ purchase order on a sample basis to identify terms and conditions relating to goods acceptance and price adjustments.
Revenue is only recognised to the extent that is highly probable a significant reversal will not occur. Testing the supporting documents on a sample basis for sales transactions recorded during the period closer to the year end and subsequent to the year end to determine whether revenue was recognised in the correct period.
Revenue recognition has been identified as a key audit matter since the management considers revenue as a key metric for evaluation of performance. Performing analytical procedures on current year revenue based on trends and where appropriate conducting further enquiries and testing.
2 Accuracy and Completeness of Capital Expenditure We assessed the Company's process to verify the Capital Expenditure incurred during the year including significant additions to Capital Work-in-Progress related to new manufacturing facility being set up.
Capital Expenditure ("capex") has been considered as a key audit matter in view of the complexity and volume of transactions and the fact that it comprises a critical element of costs for the Company. Our audit approach consisted of testing of the design and eness of the internal controls and substantive effectiv operating testing as follows:
Review of capex business process flow of documents/ information andtheircontrolseffectiveness Substantive tests on random sampling basis for all the major additions deletions to the assets by applying all the characteristics of capital expenditure proper classification of the same with reference to the company's policy and accounting standards Scrutiny of relevant general ledger accounts to assess if the expenditure has been appropriately segregated into revenue and capital expenditure
Review of closing balances of Capital Work-in-Progress with a view to confirm that the same relates to such capital items which have not yet been put to use by the management
Review of verificationcarried physical out by the Management with respect to book records.
Review of compliance done with respect to Companies Act Income Tax Act Customs duty and GST Act particularly for accounting of additions deletions depreciation and of carrying amounts thereof.
Information Other than the Financial Statements and Auditor's Report thereon: obtained during the course of our audit or otherwise appears to be materially misstated.
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the Management Discussion and Analysis Board's If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact.
Report including Annexures to Board's Report but does not include and our auditor's report the financial thereon. We have nothing to report in this regard.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Responsibility of Management for Financial Statements
In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistentwiththefinancialstatements or our knowledge The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principles

generally accepted in India including the Ind AS specified under section 133 of theAct and other accounting principles generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities 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 thosesufficient risks and obtain audit evidence that is appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Companies Act 2013 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 that may cast significant doubt on going concern.If we conclude that a material uncertainty exists we are required to draw attention inour auditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial underlying transactions and events ina manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements We . may be influenced considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the significant audit findings including and anysignificant deficiencies in internal 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of theyear and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefitsof such communication.

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 in"AnnexureA" a statement on the matters specified paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit 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 the Statement of OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account. statementsd) Inour opinion the aforesaid financial under Section comply with the Ind AS specified 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as onDecember 31 2020 and taken on record by the Board of Directors none of the directorsare disqualified as on December 31 2020 from being appointed as a director in terms ofSection 164 (2) of the Act.

Statutory reportS FinanCial StatementS

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 unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrolsoverfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note 36.g.).

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

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

For Kirtane & Pandit LLP

Chartered Accountants

Firm Registration No.105215W/W100057

Suhrud Lele

Partner

Membership No.: 121162

UDIN: 21121162AAAABK1915

Place: Pune

Date: February 18 2021

Annexure "A"

To The Independent Auditor's Report

The annexure referred to in paragraph 1 in Report on Other Legal and RegulatoryRequirements of the Independent Auditors' Report to the members of the Company on theFinancial Statements for the year ended 31st December 2020 we report that:

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

(b) The Company has a regular program of physical of property plantverification andequipment wherein all items of property plant and equipment are verified in a phasedmanner over a period not exceeding 3 years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. The Company has carriedout physical verification in accordance with this program during the year and materialdiscrepancies were not noticed during the same.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds comprising all the immovableproperties (comprising of freehold land) are held in the name of the Company as at thebalance sheet date.

(ii) According to the information and explanations given to us verificationofinventory (including the physical stock lying with third parties) has been conducted bythe management at reasonable intervals. The discrepancies noticed on such verificationofInventory as physical compared to the book records were not material and have beenproperly dealt with in the Books of Account.

(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act. Accordingly paragraph 3(iii) of the Order is notapplicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has not given loans made investments or given guarantees which are covered by theprovisions of Section 185 and 186 of the Act. Accordingly paragraph 3(iv) of the Order isnot applicable.

(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 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 for the business activities carried out by the Company.Accordingly paragraph 3(vi) of the Order is not applicable.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at December 31 2020 for a period of more than six monthsfrom the date they became payable.

(c) Details of dues of Income-tax Service Tax Customs Duty Excise Duty Goods andServices Tax and Value Added Tax which have not been deposited as on December 31 2020 onaccount of disputes are given below: -

Name of the Statute Nature of dues Amount under dispute (Rs.) Period for which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income taxes 30755873/- FY 2015-16 CIT (A)
Central Sales Tax Act 1956 Central Sales tax and interest thereon 9716291/- (*) FY 2015-16 Joint Commissioner Of State Tax

*Note: Out of the above Rs. 4469468/- has been paid under protest.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has not taken any loan or borrowings from governmentand has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to us theterm loans taken by the Company have been applied for the purpose for which they wereraised. The Company had not raised money by way of further public offer (including debtinstruments) during the year.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Financial Statements to the best of our knowledge and according to theinformation and explanations given to us no fraud by the Company or no fraud on theCompany or employees has been noticed or reported byitsofficers during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 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.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have statements as required by been disclosedin the financial the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has made preferential allotment ofequity shares to Enkei Corporation Japan during the year. The Company has complied withthe requirement of section 42 of the Act and has used the amounts raised for the purposesfor which the funds were raised.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.

For Kirtane & Pandit LLP

Chartered Accountants

Firm Registration No.105215W/W100057

Suhrud Lele

Partner

Membership No.: 121162

UDIN: 21121162AAAABK1915

Place: Pune

Date: February 18 2021

Annexure "B"

To The Independent Auditor's Report

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 EnkeiWheels (India) Limited ("the Company") as of 31st December 2020 inconjunction with our audit of the Financial Statements of the Company for the year endedon sufficient and appropriate to provide a basis for our audit that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating 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. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is opinion on the Company'sinternal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

The 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of Financial Statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion 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 financial reportingwere operatingeffectively as at December 31 2020 based on the internal control overfinancial 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.

For Kirtane & Pandit LLP

Chartered Accountants

Firm Registration

No.105215W/W100057

Suhrud Lele
Partner
Place: Pune Membership No.: 121162
Date: February 18 2021 UDIN: 21121162AAAABK1915

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