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Orient Electric Ltd.

BSE: 541301 Sector: Consumer
NSE: ORIENTELEC ISIN Code: INE142Z01019
BSE 00:00 | 24 Jan 340.15 -11.05
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355.00

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355.00

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NSE 00:00 | 24 Jan 340.40 -9.90
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350.90

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OPEN 355.00
PREVIOUS CLOSE 351.20
VOLUME 33251
52-Week high 408.20
52-Week low 239.85
P/E 51.38
Mkt Cap.(Rs cr) 7,218
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 355.00
CLOSE 351.20
VOLUME 33251
52-Week high 408.20
52-Week low 239.85
P/E 51.38
Mkt Cap.(Rs cr) 7,218
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Orient Electric Ltd. (ORIENTELEC) - Auditors Report

Company auditors report

To the Members of

Orient Electric Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of Orient Electric Limited("the Company") which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the Ind AS financial statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act_2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March_31_2021 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the ‘Code of Ethics' issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Ind AS financial statements.

Emphasis of Matter

We draw attention to Note 44 to the accompanying Ind AS financial statements whichdescribes the uncertainties and management's assessment of the impact of COVID-19 pandemicon the Company's operations cash flows and recoverability of current and non-currentassets of the Company which is highly dependent on future economic developments andcircumstances as they evolve. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2021. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For matter below our description of how our auditaddressed the matter is provided in that context.

We have determined the matter described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matter below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Revenue recognition
For the year ended March 31 2021 the Company has recognized revenue from contracts with customers amounting to Rs 2029.38 crores. Our audit response consisted of the following procedures:
- We evaluated the Company's revenue recognition accounting policies and its compliance in terms of Ind AS 115 ‘Revenue from contracts with customers';
Revenue recognition Revenue from the sale of goods is recognised upon transfer of control of ownership of the goods to the customer usually on delivery of goods. The Company considers estimated time of delivery of goods and this has an impact on the timing of revenue recognition. This increases the risk of misstatement of the timing and amount of revenue recognized in the Ind AS financial statements. In view of above we have identified revenue recognition as a key audit matter. - We obtained an understanding of management's internal controls over the revenue recognition process and the timing of revenue recognition including key terms and conditions of the contracts with customers;
- We performed sales transactions testing based on a representative sampling of the sales invoices based on the terms and conditions of the sale orders including the shipping terms;
- We also tested sales transactions made near the year end by verifying sample of sales transactions occurring pre and post year end to supporting documentation including customer confirmation of receipt of goods
; - We performed monthly analytical reviews to identify any unusual sales trends;
- Assessed the relevant disclosures made in respect of revenue from contracts with customers within the Ind AS financial statements.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Director's Report Management Discussion and Analysis andBusiness Responsibility Report but does not include the financial statements and ourauditor's report thereon. The other information is expected to be made available to usafter the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and wewill not 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 such other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

Responsibilities of Management for the Ind AS 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 of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. 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 the 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company'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.

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

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS 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 Ind AS 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 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 Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including 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 Ind AS financial statements forthe financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure_1" a statement on the matters specified inparagraphs 3 and 4 of the 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 accounts 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 ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March_31_2021 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 with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 Ind AS financial statements – Refer Note 32 to the Ind AS financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Amit Gupta
Partner
Place: Faridabad Membership Number: 501396
Date: May 12 2021 UDIN: 21501396AAAAAV4131

Annexure 1 referred to in paragraph 1 of our report of even date under section‘Report on other legal and regulatory requirements'

Re: Orient Electric Limited (‘the Company')

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment. (b) All propertyplant and equipment have not been physically verified by the management during the yearbut there is a regular programme of verification over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification. (c) According to theinformation and explanations given by the management and audit procedures performed by usthe title deeds of immovable properties included in property plant and equipment are heldin the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification. Inventories lying with third parties have been confirmed by them as at March31 2021 and no material discrepancies were noticed in respect of such confirmations.

(iii) (a) According to the information and explanations given to us and auditprocedures performed by us the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly the provisions ofclause 3(iii) (a) (b) and (c) of the Order are not applicable to the Company and hencenot commented upon. (iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities given in respectof which provisions of section 185 and 186 of the Companies Act 2013 are applicable andhence not commented upon.

(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.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of electrical goodsand are of the opinion that prima facie the specified accounts and records have been madeand maintained. We have not however made a detailed examination of the same. (vii) (a)Undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues have generally been regularly depositedwith appropriate authorities though there has been slight delay in a few cases.

(b) According to the information and explanations given to us and audit proceduresperformed by us no undisputed amounts payable in respect of provident fund employees'state insurance income-tax service tax sales-tax duty of custom duty of excise valueadded tax goods and services tax cess and other statutory dues were outstanding at theyear end for a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-tax sales tax goodsand service tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the statute Nature of the dues Rs in Crore* Period to which the amount relates Forum where the dispute is pending
Central Excise & Customs Act 1962 Disallowance of Modvat/ cenvat credit on inputs 0.22 1994-1995 1995-1996 Commissioner of Central Excise Kolkata
Central Excise & Customs Act 1962 Excess ISD Credit transfer to units 0.37 2013-2014 Customs Excise and Service Tax Appellate Tribunal Kolkata
Central Excise & Customs Act 1962 Levy of duty on short return of Cottage Parties 0.12 1975-1976 1976-1977 1981-1982 to 1984- 1985 1993-1994 to 1996-1997 2000-2001 2002-2003 Additional Commissioner/ Commissioner Appeals/ Customs Excise and Service Tax Appellate Tribunal Kolkata
Central Excise & Customs Act 1962 West Bengal Tax on Entry of Goods into Local Areas Act 2012 Customs duty for_imports of tools & dies Demand for interest on entry tax 0.93 1.56 2012-2013 to 2014-2015 2013-2014 2014-2015 2015-2016 2016-2017 Customs Excise and Service Tax Appellate Tribunal Kolkata West Bengal Taxation Tribunal
The Kerala Value Added Tax Act 2016 Additional demand of sales tax 0.15 2012-2013 to 2014-2015 Assistant Commissioner commercial taxes Cochin
The Central Sales Tax Act 1956 Delay in depositing F Forms 0.05 2012-2013 Joint commissioner of Commercial Taxes LTU Jaipur
The Central Sales Tax Act 1956 Treatment of transfer of Defective stock as sales 0.02 2003-2004 Appellate Authority
Finance Act 1994 Denial of Cenvat Credit availed of as input services on job work services 0.44 2009-2010 Joint commissioner -service tax New Delhi
Tamilnadu Value Added Tax Act 2006 Additional demand for stock transfer 8.98 2006-2007 to 2010- 2011 Assistant Commissioner Chennai
The West Bengal Value Added Tax Act 2003 Additional demand of sales tax 1.24 2016-2017 to 2017-2018 Commissioner (a)-Sales tax West Bengal
The West Bengal Value Added Tax Act 2003 Disallowance of Sales Return ITC excess of unregistered purchase tax 1.48 2014-2015 Joint commissioner of Commercial Taxes LTU Kolkata
Haryana Value Added Tax Act/Central Sales Tax Act 2003 VAT & CST demand 1.12 2017-2018 Deputy Excise & Taxation Commissioner-cum-Assessing Authority Faridabad

*Net of amount paid under protest

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution or bank. The Company did not have any outstanding dues in respect ofgovernment or debenture holders during the year.

(ix) According to the information and explanations given by the management and auditprocedures performed by us the Company has not raised any money by way of initial publicoffer / further public offer / debt instruments and term loans hence reporting underclause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud on the Companyby the officers and employees of the Company has been noticed or reported during the year.(xi) According to the information and explanations given by the management and auditprocedures performed by us the managerial remuneration has been paid / provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management and auditprocedures performed by us transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon. (xv) According to the information and explanationsgiven by the management and audit procedures performed by us the Company has not enteredinto any non-cash transactions with directors or persons connected with him as referred toin section 192 of Companies Act 2013. (xvi) According to the information and explanationsgiven to us the provisions of section 45-IA of the Reserve Bank of India Act 1934 arenot applicable to the Company.

For S.R. Batliboi & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005
per Amit Gupta

Partner

Place: Faridabad Membership Number: 501396
Date: May 12 2021 UDIN: 21501396AAAAAV4131

Annexure 2 To The Independent Auditor's Report Of Even Date On The Ind As FinancialStatements Of Orient Electric 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 OrientElectric Limited ("the Company") as of March_31_2021 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 the 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these financial statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing as specified under section 143(10) of the Companies Act_ 2013to the extent 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 to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these financial statements was established and maintained andif such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to these financialstatements and their operating effectiveness. Our audit of internal financial controlsover financial reporting included obtaining an understanding of internal financialcontrols over financial reporting with reference to these financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to thesefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to these financialstatements 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 withReference to these Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements 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 theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these financial statements and suchinternal financial controls over financial reporting with reference to these financialstatements were operating effectively as at March_31_2021 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.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Amit Gupta
Partner
Place: Faridabad Membership Number: 501396
Date: May 12 2021 UDIN: 21501396AAAAAV4131

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