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Hind Rectifiers Ltd.

BSE: 504036 Sector: Engineering
NSE: HIRECT ISIN Code: INE835D01023
BSE 00:00 | 28 Jan 246.25 5.70
(2.37%)
OPEN

244.75

HIGH

248.00

LOW

240.45

NSE 00:00 | 28 Jan 244.35 3.60
(1.50%)
OPEN

240.85

HIGH

248.05

LOW

239.95

OPEN 244.75
PREVIOUS CLOSE 240.55
VOLUME 4076
52-Week high 268.75
52-Week low 102.00
P/E 19.84
Mkt Cap.(Rs cr) 408
Buy Price 246.25
Buy Qty 338.00
Sell Price 246.50
Sell Qty 74.00
OPEN 244.75
CLOSE 240.55
VOLUME 4076
52-Week high 268.75
52-Week low 102.00
P/E 19.84
Mkt Cap.(Rs cr) 408
Buy Price 246.25
Buy Qty 338.00
Sell Price 246.50
Sell Qty 74.00

Hind Rectifiers Ltd. (HIRECT) - Auditors Report

Company auditors report

TO THE MEMBERS OF HIND RECTIFIERS LIMITED

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of Hind Rectifiers Limited(“the Company”) which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information in which areincorporated the returns for the year ended on that date audited by the auditors of theCompany's branches at Nashik and Dehradun.

2. 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 accounting principles generally accepted in Indiaincluding Indian Accounting Standards ("Ind AS") specified under Section 133 ofthe Act of the state of affairs (financial position) of the Company as at 31st March2019 and its profit (financial performance including other comprehensive income) itscash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We have conducted our audit in accordance with the Standards on Auditing specifiedunder Section 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ('ICAI') together withthe ethical requirements that the relevant to our audit of the financial statements underthe provisions of the Act and the rules there under and we have fulfilled our otherethical responsibilities in accordance with 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.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. 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. Wehave determined no such key audit matters to be communicated in our audit report.

Other Matters

5. We did not audit the financial statements/information of Nashik and Dehradunbranches included in the financial statements of the Company whose financial statements /financial information reflect total assets of Rs. 4624.19 lacs for Nashik and Rs. 975.57lacs for Dehradun as at 31st March 2019 and total revenues of Rs. 9545.12 lacs of Nashikand Rs. 7440.75 lacs for Dehradun for the year ended on that date as considered in thefinancial statements. The financial statements/information of these branches have beenaudited by the branch auditors whose reports have been furnished to us and our opinion inso far as it relates to the amounts and disclosures included in respect of these branchesis based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Information other than the Financial Statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon.

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 and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

7. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the state of affairs (financial position) profit or loss(financial performance including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

8. 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.

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

Auditor's Responsibilities for the Audit of the Financial Statements

10. 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 or assurance but is not a guarantee that an audit conducted in accordance withStandard on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

•Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V of the Act.

2. As required by the Companies (Auditor's Report) Order 2016 (the 'Order') issued bythe Central Government of India in terms of Section 143(11) of the Act we give in theAnnexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

3. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport 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 the Statement of Change inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account and with the returns received from the branches not visited by us.;

d. in our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act;

e. on the basis of the written representations received from the directors as at 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act;

f. we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31st March 2019 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport as per Annexure B expressed an unmodified opinion;

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 (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 the financial statements; ii. the Company has made provision as requiredunder the applicable law or Ind AS for material foreseeable losses if any on long termcontracts including derivative contracts; if any;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2019;

For RAVI A. SHAH ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.125079W
RAVI A. SHAH
Place : Mumbai. Proprietor
Date : 18th May 2019 Membership No.116667

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF HINDRECTIFIERS LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2019

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

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

b. There is a regular program of physical verification which in our opinion isreasonable having regard to the size of the Company and the nature of its property plants& equipments. No material discrepancies have been noticed in respect of propertyplant and equipment physically verified during the year.

c. The title deeds of all the immovable properties included in property plant &equipment are held in the name of the Company.

ii) The inventory has been physically verified by the management during the year. Inour opinion frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2019 and no material discrepancies were noticed on suchverification.

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 forms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act. Accordingly Paragraph 3 ( iii ) of Order2016 is notapplicable.

iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act and in respect of Company's products andservices and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. However we have not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales tax goods and services taxservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues as applicable with the appropriate authorities. Further no undisputedamounts payable in respect thereof were outstanding at the year-end for a period of morethan six months from the date they become payable.

(b) The dues outstanding in respect of income-tax sales-tax duty of customs duty ofexcise and value added tax on account of any dispute are as follows:

Name of the Statute Nature of Dues Amount (in lakhs) Amount paid/ adjusted (in lakhs) Period to which the amount relates Forum where dispute is pending
Central Excise Act Excise Duty 139.40 9.17 2005-2017 Central Excise and Service Tax Appellate Tribunal
Central Sales Tax and Local Sales Tax Central Sales Tax and Local Sales Tax 29.48 5.00 2008-2009 Departmental Authority
Central Sales Tax and Local Sales Tax Central Sales Tax and Local Sales Tax 13.01 7.67 2010-2011 Sales Tax Appellate Tribunal

viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or a bank or any dues to debenture-holders during the year. TheCompany did not have any outstanding loans or borrowings from government during the year.

ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3 (xii) of the Order are not applicable.

xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of the Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly provisions ofclause 3(xiv) of the Order are not applicable.

xv) In our opinion the Company has not entered into any non-cash transactions withdirectors or persons connected with them covered under Section 192 of the Act.

xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For RAVI A. SHAH ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.125079W
RAVI A. SHAH
Place : Mumbai. Proprietor
Date : 18th May 2019 Membership No.116667

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF HINDRECTIFIERS LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2019

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

1. In conjunction with our audit of the financial statements of Hind Rectifiers Limited(“the Company”) as at and for the year ended 31st March 2019 we have auditedthe internal financial controls over financial reporting (IFCoFR) of the Company as ofthat date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sIFCoFR 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

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols over financial reporting were operating effectively as at March 31 2019 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For RAVI A. SHAH ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.125079W
RAVI A. SHAH
Place : Mumbai. Proprietor
Date : 18th May 2019 Membership No.116667