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Hind Rectifiers Ltd.

BSE: 504036 Sector: Engineering
NSE: HIRECT ISIN Code: INE835D01023
BSE LIVE 14:07 | 26 Sep 122.35 4.30
(3.64%)
OPEN

124.10

HIGH

126.95

LOW

120.60

NSE 13:59 | 26 Sep 121.65 3.25
(2.74%)
OPEN

124.80

HIGH

125.90

LOW

121.00

OPEN 124.10
PREVIOUS CLOSE 118.05
VOLUME 7161
52-Week high 148.40
52-Week low 75.10
P/E 941.15
Mkt Cap.(Rs cr) 184
Buy Price 122.25
Buy Qty 65.00
Sell Price 122.85
Sell Qty 4.00
OPEN 124.10
CLOSE 118.05
VOLUME 7161
52-Week high 148.40
52-Week low 75.10
P/E 941.15
Mkt Cap.(Rs cr) 184
Buy Price 122.25
Buy Qty 65.00
Sell Price 122.85
Sell Qty 4.00

Hind Rectifiers Ltd. (HIRECT) - Auditors Report

Company auditors report

TO THE MEMBERS OF HIND RECTIFIERS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of HIND RECTIFIERS LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information in whichare incorporated the returns for the year ended on that date audited by the auditors ofthe Company’s branches at Nashik and Dehradun Unit-I & Unit-II.

Management’s Responsibility for the 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 financial statements that give a true and fair view of the financial position andfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent;and design implementation and maintenance of adequate Internal Financial Controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 in accordance with the Standards on Auditing specified undersection 143(10) of Act. Those Standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether thefinancial are free from material misstatement. statements

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financialstatements give the information required by theAct 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 31st March 2017 and its loss and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of Nashik and Dehradun Unit-I & Unit-II(the branches) included in the financialstatements of the Company. The financialstatements of the said branches have been branch auditors whose reports have beenfurnished to us and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of the branch is based solely on the report of such branch auditors.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Government of India in terms of sub-section (11) of section 143of the Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in the Annexure I a statement on the matters specified in the paragraphs 3 and 4 ofthe said 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 purposes 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus. of the Company audited under section 143(8) of

c. The reports on the accounts of the branch offices theAct by branch auditors havebeen sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

e. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

f. On the basis of the written representations received from the Directors as on 31stMarch 2017 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2017 from being appointed as a Director in terms of section164(2) of the Act.

g. 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 II".

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 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 financial statements;

ii. The Company has made provision as at 31st March 2017 as required under theapplicable law or accounting standards for material foreseeable losses if any on longterm contracts including derivative contracts;

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company;

iv. The Company has provided requisite disclosures in the Financial Statements asregards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated 8th November 2016 of the Ministry of Finance during theperiod from 08/11/2016 to 30/12/2016 and such disclosures are in accordance with the booksof account maintained by the Company.

For and on behalf of
KHANDWALA & SHAH
Chartered Accountants
Firm Reg. No.105069W
PREMAL P. GANDHI
Place: Mumbai Proprietor
Date: 26th May 2017 Membership No.045462

Annexure I to Independent Auditor’s Report

Annexure referred to in our report of even date to the members of HIND RECTIFIERSLIMITED on the accounts for the year ended 31st March 2017

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

b. The fixed assets have been physically verified by the management during the year atreasonable intervals having regard to the size of the Company and the nature of itsassets. The discrepancies noticed on such verification were in our opinion notbooks of account.

c. According to the information and explanations given to us and based on verificationdeeds of immovable properties are held in the name of the Company;

ii) Physical verification of inventory has been conducted by the management atreasonable intervals during the year except in case of inventory lying with third partieswhere confirmations have The discrepancies noticed on physical verification of materialand have been properly dealt with in the books of account;

iii) According to the information and explanations given to us the Company has notgranted any loans to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under section 189 of the Companies Act 2013.

iv) According to the information and explanations given to us the Company has notgranted any loans investments guarantees and security to which provisions ofsection 185 and 186 of the Act apply.

v) According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of sections 73 to 76 or anyother relevant provisions of the Act and rules framed thereunder. No order has been passedby the Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any Court or any other Tribunal.

vi) We have broadly reviewed the cost records maintained by the Company in accordancewith section 148(1) of the Act and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

vii) (a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including Provident Fund (PF) Investor Education &Protection Fund Employees’ State Insurance (ESI) Income Tax Sales Tax Wealth TaxService Tax Custom Duty Excise Duty and Cess and other statutory dues with theAppropriate Authorities. According to the information and explanation given to us thereare no undisputed amounts payable in respect of such statutory dues which have remainedoutstanding as at 31st March 2017 for a period of more than six months from the day theybecome payable;

(b) The disputed statutory dues aggregating Rs. 224.48 lacs that have not beendeposited on account of disputed matters pending before Appropriate Authorities are asunder:

Name of the Statute Nature of Dues Amount (in lacs) Period to which the amount relates Forum where dispute is pending
Central Excise Act Excise Duty 117.86 (net of advance of Rs. 8.98 lacs) 2005-2016 Central Excise & Service Tax Appellate Tribunal
Central Excise Act Excise Duty 0.85 (net of advance of Rs. 0.19 lacs) 2010-2014 Departmental Authorities
Central Sales Tax and Local Sales Tax Act Central Sales Tax and Local Sales Tax 105.77 (net advance of Rs. 39.97 lacs) 2006-2013 Departmental Authorities

viii) On the basis of verification of records and according to the Company has notdefaulted in repayment of dues to banks. The Company has not taken any loan from anyfinancial institution or government or by way of issue of debentures.

ix) In our opinion and according to the information and explanations given to us theterm loan has been applied for the purpose for which the same was obtained.

x) During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and according tothe information and explanations given to us no fraud by the Company or on the Company byits officers or employees having a material misstatement on the financial statements hasbeen noticed or reported during the year.

xi) According the information and explanations given to us and based on verificationManagerial remuneration has been paid in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013.

xii) The Company is not a Nidhi company and hence reporting under clause (xii) of theorder does not arise.

xiii) According to the information and explanations given to us and based onverification approvals of the Board of Directors all transactions with the relatedparties are in compliance with sections 177 and 188 of Companies Act 2013 whereapplicable and the details have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards;

xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with Directors or persons connected with him;

xvi) According to the information and explanations given to us the Company is not aNon Banking Finance Company and therefore is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934.

For and on behalf of
KHANDWALA & SHAH
Chartered Accountants
Firm Reg. No.105069W
PREMAL P. GANDHI
Place: Mumbai: Proprietor
Date: 26th May 2017 Membership No.045462

ANNEXURE II TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF HIND RECTIFIERS 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 HindRectifiers Limited ("the Company") as of 31st March 2017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining InternalFinancial Controls based on the Internal Control over Financial Reporting criteriaestablished by the Company considering the essential componentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReportingissued 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 theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s Internal FinancialControls over financial based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial

Controls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate Internal Financial Controls overFinancial Reporting was 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 Reportingincluded obtaining 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. Theprocedures selected depend on the auditor’s judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 Controlssystem over Financial Reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s Internal Financial Control over Financial Reporting is a processdesigned to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company’s Internal Financial Controlover Financial Reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 inadequate because of changes in conditions or that the degree ofcompliance 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 FinancialControls over Financial Reporting were operating effectively as at

31st March 2017 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.

For and on behalf of
KHANDWALA & SHAH
Chartered Accountants
Firm Reg. No.105069W
PREMAL P. GANDHI
Place: Mumbai Proprietor
Date: 26th May 2017 Membership No.045462