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RHI Magnesita India Ltd.

BSE: 534076 Sector: Engineering
NSE: RHIM ISIN Code: INE743M01012
BSE 00:00 | 21 Jan 433.80 -8.00
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450.00

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NSE 00:00 | 21 Jan 435.65 -6.85
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OPEN 441.00
PREVIOUS CLOSE 441.80
VOLUME 36844
52-Week high 450.00
52-Week low 212.60
P/E 39.08
Mkt Cap.(Rs cr) 6,984
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 441.00
CLOSE 441.80
VOLUME 36844
52-Week high 450.00
52-Week low 212.60
P/E 39.08
Mkt Cap.(Rs cr) 6,984
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

RHI Magnesita India Ltd. (RHIM) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF ORIENT REFRACTORIES LIMITED

Report on the audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying Standalone Financial Statements of OrientRefractories Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the Standalone Financial Statements including significantaccounting policies and other explanatory summary of information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act.

Our responsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. 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 Standalone Financial Statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of matter

4. We draw your attention to Note 34 to the Standalone Financial Statements regardingthe scheme of amalgamation (the "Scheme") between the Company and its fellowsubsidiaries i.e. RHI India Private Limited and RHI Clasil Private Limited (hereinafterreferred as ‘erstwhile fellow subsidiaries’) as approved by the Hon’bleNational Company Law Tribunal (‘NCLT’) vide its Order dated May 05 2021. Whilethe appointed date as set out in the NCLT order is July 31 2018 these StandaloneFinancial Statements have been prepared in accordance with clause 3.7 of the Scheme whichrequires the accounting treatment to be carried out as prescribed under applicableaccounting standards that is from the beginning of the preceding year and in accordancewith Ind AS 103 Business Combination. Our opinion is not modified in respect of thismatter.

Key audit matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance Standalone Financial Statements of the current period. These matters wereaddressed in the context of our audit of the Standalone Financial Statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.

Revenue Recognition

(Refer Note 15 to the Standalone Financial Statements)

The Company recognises its revenue based on Ind-AS 115 "Revenue from Contractswith Customers".

Management uses judgement in respect of matters such as identification of performanceobligations allocation of consideration to identified performance obligations andrecognition of revenue over a period of time or at a point in time based on timing whencontrol is transferred to the customer. We focused on this area as a key audit matter asrevenue is required to be recognised in accordance with the terms of the customercontracts which involves significant management judgement as described above and thusthere is an inherent risk of material misstatement.

How our audit addressed the key audit matter

Our testing of revenue transactions was designed to cover certain customer contracts ona sample basis. Our audit procedures included the following:

• Understanding evaluating the design and testing the operating effectiveness ofcontrols over revenue recognition.

Assessing appropriateness of management’s judgements in accounting for identifiedcontracts such as:

Identification of performance obligation and allocation of consideration toidentified preformation obligation;

Evaluating the contract terms for assessment of the timing of transfer of controlto the customer to assess whether revenue is recognised appropriately over a period oftime or at a point in time (as the case may be) based on timing when control istransferred to customer;

Testing whether the revenue recognition is in line with the terms of customercontracts and the transfer of control; and

Evaluating adequacy of the presentation and disclosures. exceptions were noted inrevenue recognition including those relating Based on the above stated procedures nosignificant to presentation and disclosures as required by Ind AS 115.

Other Information

6. The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report but does notinclude the standalone financial statements and our auditor’s The Annual report isexpected to be made available to us after the date of this auditor’s report.statements does not cover the other information and we will not express any form Ouropinion on the standalone financial of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. When we read the Annual report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take appropriate action as applicable under the relevant laws andregulations.

Responsibilities of management and those charged with governance for the StandaloneFinancial Statements

7. The Company’s Board of Directors is responsible for the matters stated insection 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

8. In preparing the Standalone Financial Statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the Standalone Financial Statements

9. Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs 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 Standalone Financial Statements.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 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 reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report 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 the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of identify during our any significant theaudit andsignificant audit findings audit.

12. 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.

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Standalone FinancialStatements of the current period and are therefore the key audit matters. We describethese 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.

Other Matter

14. The corresponding figures of the Company for the year ended March 31 2020 havebeen prepared by the management the Company and its erstwhile fellow subsidiaries based onthe audited financial as adjusted for giving effect to the Scheme as approved by the NCLTvide Order dated May 05 2021 (Refer Emphasis of Matter paragraph above). Theseadjustments have been audited by us.

Our opinion is not modified in respect of above matter.

Report on other legal and regulatory requirements

15. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

16. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany and its erstwhile fellow subsidiaries (Refer Emphasis of Matter paragraph above)so far as it appears from our examination of those books except that in respect of theCompany (other than its erstwhile fellow subsidiaries) the back up of the books ofaccounts and other books and papers maintained in electronic mode has not been maintainedon servers physically located in India.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and Statement of Cash Flows dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act.

(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 maintenance of accounts and other matters connected therewithreference is made to our comment in Paragraph 16(b) above that in respect of the Company(other than its erstwhile fellow subsidiaries) the backup of the books of accounts andother books and papers maintained in electronic mode has not been maintained on serversphysically located in India. controls with reference to financial statements of theCompany

(g) With respect to the adequacy of the internal financial and the operatingeffectiveness of such controls refer to our separate Report in "Annexure A".

(h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements Refer Note 27 to the Standalone FinancialStatements;

ii. The Company has long-term contracts as at March 31 2021 for which there were nomaterial foreseeable losses. The Company did not have any long-term contracts includingderivative contracts as at March 31 2021.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The reporting ondisclosures relating to Specified Bank Notes is not applicable to the Company for the yearended March 31 2021.

17. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Abhishek Rara
Partner
Place: Gurugram Membership Number: 077779
Date: 25 June 2021 UDIN: 21077779AAAAAY3112

ANNEXURE A TO INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 16(g) of the Independent Auditors’ Report of even date tothe members of Orient Refractories Limited on the Standalone Financial Statements for theyear ended March 31 2021

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Orient Refractories Limited ("the Company") as of March 31 2021in conjunction with our audit of the Standalone Financial Statements of the Company forthe year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management 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 issued by the Institute of Chartered Accountants of India (ICAI). 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 Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to 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 internal financial controlssystem . withreferenceto statements financial

Meaning of Internal Financial Controls with reference to financial statements

6. A company’s internal financial controls with reference to financialstatementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internalfinancial controls with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects financial controls systemwith reference to adequate internal financial statements and such internal financialcontrols with reference at March 31 2021 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.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Abhishek Rara
Partner
Place: Gurugram Membership Number: 077779
Date: 25 June 2021 UDIN: 21077779AAAAAY3112

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 15 of the Independent Auditors’ Report of even date tothe members of Orient Refractories Limited on the Standalone Financial Statements as ofand for the year ended March 31 2021

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of two years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 3(a) on fixed assetsto the Standalone Financial Statements are held in the name of the Company except withrespect to the title deeds of immovable properties held in the name of its erstwhilefellow subsidiary i.e. RHI Clasil Private Limited amounting to Rs. 2810.96 lacs. Pursuantto the approval of Scheme by the NCLT vide its Order dated May 05 2021 the Company is inthe process of getting these title deeds transferred in the name of the Company. Alsorefer Paragraph 4 to our main audit report.

ii. The physical verification of inventory including stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)

(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of provident fund income tax and professional taxthough there has been a slight delay in a few cases and is regular in depositingundisputed statutory dues including employees’ state insurance sales tax servicetax duty of customs goods and services tax and other material statutory dues asapplicable with the appropriate authorities.

b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of goods and services tax value added tax whichhave not been deposited on account of any dispute. The particulars of dues of income taxsales tax service tax duty of customs and duty of excise as at March 31 2021 which havenot been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount Amount paid under protest Period to which the amount relates Forum where the dispute is pending
(Rs. in lacs)
Finance Act 1994 Service Tax 133.50 3.09 January 2013 to February 2015 Goods and Services Tax Appellate Tribunal
Finance Act 1994 Service Tax 147.64 - Dec 2012 to January 2015 High Court
Customs Act 1962 Customs Duty 0.86 - April 2016 to June 2017 Commissioner of Customs (Appeals)
Central Excise Act 1944 Excise Duty 34.98 1.11 April 2016 to March 2017 Commissioner (Appeals)
Income Tax Act 1961 Income Tax 939.29 - April 2017 to March 2018 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 54.62 - April 2016 to March 2017 Income tax Appellate Tribunal
Foreign Trade Policy (FTP 2004-2009 & FTP 2009-2014) and Customs Act 1962 Customs Duty 33.74 33.74 November 2019 to March 2020 Commissioner of Customs (Appeals)
Foreign Trade Policy (FTP 2004-2009 & FTP 2009-2014) and Customs Act 1962 Customs Duty 257.28 - April 2013 to August 2016 Directorate of Revenue Intelligence
Central Sales Tax Act 1956 Sales Tax 14.51 - April 2014 to March 2015 Assistant Commissioner of Sales Tax CT & GST - Angul
Central Sales Tax Act 1956 Sales Tax 2.02 - April 2013 to March 2014 Assistant Commissioner of Sales Tax CT & GST - Angul

viii. As the Company does not have any loans or borrowings from any financialinstitution or bank or Government nor issued any debentures as at the balance sheet datethe provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company officers or employees noticed orreported on the Company by its during the year nor have we been informed of any such caseby the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. Also refer paragraph 17 of our main audit report.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the Standalone Financial Statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Abhishek Rara
Partner
Place: Gurugram Membership Number: 077779
Date: 25 June 2021 UDIN: 21077779AAAAAY3112

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