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Rane Holdings Ltd.

BSE: 505800 Sector: Financials
NSE: RANEHOLDIN ISIN Code: INE384A01010
BSE 00:00 | 29 May 371.75 12.60
(3.51%)
OPEN

360.35

HIGH

375.65

LOW

360.35

NSE 00:00 | 29 May 368.45 14.65
(4.14%)
OPEN

368.00

HIGH

375.05

LOW

341.10

OPEN 360.35
PREVIOUS CLOSE 359.15
VOLUME 260
52-Week high 1256.00
52-Week low 288.00
P/E 9.00
Mkt Cap.(Rs cr) 531
Buy Price 365.80
Buy Qty 25.00
Sell Price 388.75
Sell Qty 25.00
OPEN 360.35
CLOSE 359.15
VOLUME 260
52-Week high 1256.00
52-Week low 288.00
P/E 9.00
Mkt Cap.(Rs cr) 531
Buy Price 365.80
Buy Qty 25.00
Sell Price 388.75
Sell Qty 25.00

Rane Holdings Ltd. (RANEHOLDIN) - Auditors Report

Company auditors report

To The Members of Rane Holdings Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofRane Holdings Limited ("the Company") which comprise the Balance Sheet as at 31March 2019 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flows and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2019and its profit total comprehensive income its cash flows and the changes in equity forthe year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No.

Key Audit Matter

Auditor's Response

1 Impairment of investments: Principal audit procedures performed:

Assessment of impairment in a wholly owned step down subsidiary:

Our audit procedures included amongst others testing the company's controls surrounding the budgeting process and the carrying value of investment and loans to RPDC. Our audit included assessing the Company's budgeting procedures upon which the forecasts are based and the integrity of the discounted cash flow models which management used to prepare the valuations.

The Company's step down subsidiary in the US Rane Precision Die-Casing Inc. (RPDC) has incurred a net loss of र 36.58 Crores during FY 2018-19. The net worth of the step down subsidiary has fully eroded. These indicators necessitated management to test the investment and loans given to the subsidiaries for impairment.

The total financial exposure representing investment and loans (through intermediate subsidiaries) in the subsidiary aggregated to र 96.83 Crores as at March 31 2019. Impairment testing uses projections of future cash flows based on the most recent long-term forecasts approved by management including estimated sales volumes and pricing. The long-term forecasts are projected over five years.

We challenged the robustness of the key assumptions used to determine the recoverable amounts used in the valuation.

We engaged our own valuation specialists to assist us in evaluating the assumptions and methodologies used by management in particular those relating to the discount rates risk free rate market risk premium etc. by comparing relevant assumptions to industry and economic forecasts.

Management engaged external valuers who used various assumptions such as the valuation approach probability of projections risk free rate market risk premium etc. and assessed that the recoverable amounts were higher than the carrying value of investment and loans given to RPDC.

We also assessed whether the Company's disclosures about the sensitivity of the outcome of the impairment assessment to changes in key assumptions reflect the risks inherent in the valuation of investment.

Assessment of impairment involves significant management judgements and estimations and accordingly we deemed this to be a key audit matter.

Information Other than the Financial Statements and Auditor'sReport Thereon

• The Company's Board of Directors is responsible for theother information. The other information comprises the information included in theDirectors' report and Annexures to the Directors' report but does not includethe consolidated financial statements standalone financial statements and ourauditor's report thereon.

• Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

• In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

• If based on the work we have performed on the other informationthat we obtained prior to the date of this auditor's report we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

• The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statement that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our auditreferred to in the Other Matters section above we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company in so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31st March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements; ii. The Company did not haveany long-term contracts including derivative contracts for which there were any materialforeseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.008072S)

Ananthi Amarnath

Place: Chennai Partner
Date: May 27 2019 (Membership No. 209252)

Annexure "A" to The Independent Auditor's Report(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Rane Holdings Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed 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 control overfinancial 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.008072S)

Ananthi Amarnath

Place: Chennai Partner
Date: May 27 2019 (Membership No. 209252)

Annexure B to The Independent Auditors' Report

(Referred to in paragraph (2) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of the property plant andequipment.

(b) The company has a program of verification of property plant andequipment to cover all the items in a phased manner over a period of two years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the program certain property plant and equipment were physicallyverified by the Management during the year. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

(c) With respect to immovable properties of acquired land and buildingsthat are freehold according to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deeds / courtorder approving scheme of arrangement / amalgamation provided to us we report that thetitle deeds of such immovable properties are held in the name of the Company as at thebalance sheet date.

Immovable properties of land whose title deed have been pledged withthe lender as security for term loan are held in the name of the Company based on theMortgage deed executed between the lender and the Company for which confirmations havebeen obtained from the lender.

(ii) The company does not have inventory and hence reporting underclause (ii) of the CARO 2016 is not applicable.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities as applicable.

(v) According to the information and explanations given to us theCompany has not accepted any deposit during the year.

(vi) Having regard to the nature of the Company'sbusiness/activities reporting under clause (vi) CARO 2016 is not applicable.

(vii) According to the information and explanations given to us inrespect of statutory dues:

(a) The Company has been regular in depositing undisputed statutorydues including Provident Fund Employees State Insurance Income-tax Goods and ServicesTax Customs Duty cess and other material statutory dues applicable to it with theappropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees State Insurance Income-tax Goods and Services Tax Customs Duty cessand other material statutory dues in arrears as at March 31 2019 for a period of morethan six months from the date they became payable.

(c) Details of dues of Income tax Service Tax and Customs Duty whichhave not been deposited as on March 31 2019 on account of disputes are given below.

Name of Statute

Nature of Dues

Forum where the dispute is pending

Period to which amount relates

Amount Involved ( in Lakhs)

Amount Unpaid in Lakhs)

Income Tax Act 1961

Income Tax

Commissioner of Income Tax (Appeals)

2005-06 2008-09 2009-10 2011-12 to 2015-16

1098

804

Finance Act 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

2006-07 to 2011-12

41

39

Customs Act 1962

Custom Duty

Customs Excise & Service Tax Appellate Tribunal

2012-13

6

6

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions and banks. The Company has not issued any debentures and has nottaken any loans from government.

(ix) In our opinion and according to the information and explanationsgiven to us the term loans have been applied by the Company during the year for thepurposes for which they were obtained. The Company has not raised moneys by way of initialpublic offer or further public offer.

(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or no material fraud on the Company byits officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid/provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompanies Act 2013.

(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the CARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Sections 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements as required bythe applicable accounting standards.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding or associate company or persons connectedwith them and hence provisions of Section 192 of the Companies Act 2013 are notapplicable.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.008072S)

Ananthi Amarnath

Place: Chennai Partner
Date: May 27 2019 (Membership No. 209252)