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Rexnord Electronics & Controls Ltd.

BSE: 531888 Sector: Engineering
NSE: N.A. ISIN Code: INE687C01012
BSE 00:00 | 24 Sep 50.00 -1.45
(-2.82%)
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NSE 05:30 | 01 Jan Rexnord Electronics & Controls Ltd
OPEN 51.95
PREVIOUS CLOSE 51.45
VOLUME 5896
52-Week high 74.90
52-Week low 22.15
P/E 8.62
Mkt Cap.(Rs cr) 56
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 51.95
CLOSE 51.45
VOLUME 5896
52-Week high 74.90
52-Week low 22.15
P/E 8.62
Mkt Cap.(Rs cr) 56
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rexnord Electronics & Controls Ltd. (REXNORDELECTR) - Auditors Report

Company auditors report

To

The Members of

REXNORD ELECTRONICS AND CONTROLS LIMITED Report on the StandaloneFinancial Statements Opinion

We have audited the accompanying standalone financial statements ofRexnord Electronics and Controls Limited (“the Company”) which comprise theBalance Sheet as at 31 March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statement forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas “the standalone financial statements”).

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 2021its profit (including other comprehensive income) its changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(“SAs”) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Auditof the standalone financial statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone 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 matter described below to be the key auditmatters to be communicated in our report

Key audit matter How our audit addressed the key audit matter
Appropriateness of revenue recognition on sale of goods. Refer note 2.2 and Note 32 of the standalone financial statements. Our audit procedures relating to revenue recognition include the following:
The Company has revenue from sale of goods. a. Understood and performed procedures to assess the design and test the operating effectiveness of relevant controls related to recording of revenue.
Revenue from sale of goods is recognized under Ind AS 115- ‘Revenue from Contracts with Customers' at a point in time when the control has been transferred which generally coincides with dispatch of products to customers in case of domestic sales and on the basis of bill of lading in the case of export sales. b. Assessed whether the policy of recognizing revenue was nce the line with Ind AS - 115.
We determined this to be a key audit matter due to significant time and effort involved in assessing the appropriateness of revenue recognition and covering the aspects of completeness accuracy occurrence and cut off. c. Tested the reconciliation of the amounts as per the sales register to the general ledger.
d. Performed tests on sample basis by validating the amounts recorded with the underlying documents which inter - alia includes invoices dispatch documents customer orders/ contracts receipt of consideration from customers where applicable.
e. Performed cut off testing on sample basis and ensured that the revenue from sale of goods is recognised in the appropriate period.
Based on the above procedures performed we did not identify any exceptions in revenue recognition on sale of goods.

Information other than the Standalone Financial Statements andAuditor's Report thereon

The Company's Board of Directors is responsible for preparation ofthe other information. The other information comprises the information included inBoard's Report including annexures to the Board's Report Corporate Governanceand Management Discussion and Analysis but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance (including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Standalone Financial Statements

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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by 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 the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so 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 of the Act we give in the “Annexure A“ a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143 (3) of the Act 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 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 Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d) in our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014;

e) on the basis of written representations received from the directorsas on 31 March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (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 B”; and

g) 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 in our opinion and to our best of our information and according to theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 42 (i) to the financialstatements;

(ii) The Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses;

(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company; and

(iv) The disclosures requirements relating to holdings as well asdealings in specified bank notes were applicable for the period from 8 November 2016 to 30December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.

3. With respect to the matter to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 read with schedule V of the Act.

For Rakesh Soni & Co.

Chartered Accountants

(Firm Registration No. 114625W)
R.K. Soni

Partner

Membership No. 047151
Place: Mumbai UDIN: 21047151AAAABU7724
Dated: June 30 2021

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT - 31 MARCH 2021

Referred to in paragraph 1 under the heading of “Report on OtherLegal and Regulatory Requirements” of our report of even date

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the standalone financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit we report that:

(i) (a) the Company has maintained records showing full particularsincluding quantitative details and situation of its fixed assets;

(b) as explained to us all the fixed assets have been physicallyverified by the management during the year. We were informed that no material discrepancyhas been noticed by the management on such verification as compared to the aforesaidrecords of fixed assets; and

(c) According to the information and explanations given to us in ouropinion the title deeds of immoveable properties are held in the name of the Companyexcept in the case of a plot of land purchased during the financial year 2016-17 by theCompany as detailed below:

Particulars Area (In Hectare) Gross Block (Rs. in lakhs) Net Block (Rs. in lakhs) Remarks
A plot of land situated at S. No. 61 H. No. 1 Part at Village- Kaman Taluka -Vasai District - Palghar (MS) 0.242 14.50 14.50 Plot purchased by executing Memorandum of Understanding and possession taken. Sale deed is yet to be executed and registered.

(ii) as certified by the management physical verification ofinventories was conducted by the management during the year except goods in transit andstock lying with third parties. There were no material discrepancies noticed on physicalverification of inventories as compared to book records and the same have been properlydealt with in the books of account.

(iii) according to the information and explanation given to us theCompany has during the year not granted loans secured or unsecured to firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Act except the unsecured loan to its wholly owned subsidiary company and withrespect to the same:

a) in our opinion the terms and conditions of granting loan to whollyowned subsidiary company are not prima facie prejudicial to the interest of the Company;

b) the schedule of repayment of principal and payment of interest hasbeen stipulated and the repayment/receipts of the principal amount and the interest areregular; and

c) there is no overdue amount of more than 90 days in respect of loangranted to wholly owned subsidiary company.

(iv) in our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of section 186 the Act withrespect to the loan granted and investments made by it. The Company has during the yearnot given any guarantee or provided any security in connection with a loan covered underthe sections 186 of the Act. Further the Company has during the year not granted anyloans given any guarantee or provided any security in connection with a loan coveredunder section 185 of the Act.

(v) the Company has not accepted any deposit from public during theyear in accordance with the provisions of sections 73 to 76 of the Act and rules framedthere under.

(vi) We have broadly reviewed the books of account maintained by theCompany in respect of the products where pursuant to the rules made by the CentralGovernment of India the maintenance of cost records has been specified under sub section(1) of Section 148 of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however made a detailedexamination of the records with a view of determine whether they are accurate or complete.

(vii) (a) on the basis of books and records examined by us amountdeducted/ accrued in the books of account in respect of undisputed statutory duesincluding provident fund employees state insurance income-tax sales-tax service taxgoods and services tax duty of customs duty of excise value added tax cess and otherstatutory dues have generally been regularly deposited with the appropriate authorities.There are no arrears of undisputed statutory dues as at the last day of financial yearconcerned outstanding for a period of more than six months from the date they becamepayable except Central Sales Tax Rs. 26255.00.

(b) on the basis of books and records examined by us there are no duesof income tax sales tax service tax goods and services tax duty of customs duty ofexcise and value added tax which have not been deposited with appropriate authorities onaccount of any dispute.

(viii) on the basis of selective checks carried out during the courseof audit we are of the opinion that the Company has not defaulted in the repayment ofdues to financial institutions and banks. There are no dues payable to the debentureholders and Government.

(ix) As per the records of the Company the Company did not raise anymoney by way of initial public offer or further public offer (including debt instruments)and term loans during the year. Accordingly provisions of paragraph 3(ix) of the Orderare not applicable to the Company.

(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.

(xi) According to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly provisions of paragraph3(xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to ustransactions with the related parties are in compliance with Section 177 and Section 188of the Act where applicable and details of such transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly provisions of paragraph 3(xiv)of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordinglyprovisions of paragraph 3(xv) of the Order are not applicable to the Company.

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

For Rakesh Soni & Co.

Chartered Accountants

(Firm Registration No. 114625W)
R.K. Soni

Partner

Membership No. 047151
Place: Mumbai UDIN: 21047151AAAABU7724
Dated: June 30 2021

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT - 31 MARCH 2021

Referred to in paragraph 2(f) under the heading of “Report onOther Legal and Regulatory Requirements” 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 Rexnord Electronics and Controls Limited (“the Company”) as of 31March 2021 in conjunction with our audit of the standalone financial statements of theCompany for 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 (“theICAI”). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (“the Guidance Note”) and the Standards on Auditing issuedby the ICAI and prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

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 isa process 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 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 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 the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 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 Rakesh Soni & Co.

Chartered Accountants

(Firm Registration No. 114625W)
R.K. Soni

Partner

Membership No. 047151
Place: Mumbai UDIN: 21047151AAAABU7724
Dated: June 30 2021

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