DIRECTORS' REPORT

Dear Members,

Your Directors present the 60th Annual Report together with the Audited Financial Statements for the year ended 31st March, 2018.

OPERATIONS

Turnover of the Company during the year 2017-18 was Rs 12,569.20 lacs as compared to Rs 11,148.49 lacs in the year 2016-17. Profit before interest, depreciation and tax was Rs 1,027.82 lacs compared to Rs 517.34 lacs.

Company continues to focus on development of new products for Railways and also for other applications. Expansion plan undertaken at Nashik for manufacture of Railway as well non Railway products has been completed during the year. Company is planning further expansion of its product range, this will help for further improving the performance.

Demand from Railways is improving and Company has healthy order bookings for the year 2018-19.

DIVIDEND AND RESERVES

In view of accumulated losses, your Directors do not recommend any dividend for the year under review and no amount is proposed to be transferred to Reserves.

INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For the Company, Ind AS is applicable from April 1, 2017. Accordingly these accounts have been prepared as per Ind AS. The areas which had an impact on account of transition to Ind AS have been reported in the notes to the financial statements.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2018 was Rs 3,31,27,446. During the year under review, the Company has issued 1505793 equity shares on right basis. Company had come up with Rights Issue of 1505793 equity shares of Rs 2/- each at a price of Rs 80/- per share (including premium of Rs 78/- per share) for an amount aggregating to Rs 1,204.63 lacs on a right basis to the existing equity shareholders of Hind Rectifiers Limited in the ratio of one equity share for every ten fully paid up equity share held on the record date i.e. 18th October, 2017.

Company received overwhelming response from shareholders. Issue was subscribed 143.73%. The Board of Directors wishes to thank all its members and investors for their response to the Company's Rights Issue of equity shares.

Company has utilized issue proceeds for the objects mentioned in the Letter of offer. Same has been certified by Statutory Auditors and noted by the Audit Committee.

During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

DEPOSITS

During the year under consideration, the Company has not accepted any deposits. Although Company had passed relevant resolution in 59th Annual General Meeting to invite deposit from shareholders but it has not started yet. There were no unpaid or unclaimed deposits as on 31st March, 2018.

Company has borrowed by way of interest free loan from Chairman and Managing Director which is exempt under Deposit Rules. Outstanding loan as on 31st March, 2017 of Rs 120 lacs was converted into Rights shares during the year.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Vandan Shah, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the Annual General Meeting. Brief profile of Shri Vandan Shah has been given in the Notice convening the Annual General Meeting.

The term of Shri S. K. Nevatia as Chairman and Managing Director is upto 31st March, 2019. The Board of Directors on the recommendation of the Nomination and Remuneration Committee has re-appointed Shri S. K. Nevatia as Chairman and Managing Director of the Company for a period of three years with effect from 1st April, 2019 to 31st March, 2022, subject to approval of members.

None of the Directors are disqualified under Section 164(2) of the Companies Act, 2013.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(l)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As per SEBI (LODR) Amendment Regulations, 2018, no listed entity shall appoint a person or continue the directorship of any person as Non-Executive Director who has attained the age of seventy five years unless a special resolution is passed to that effect. Shri Vijay Kumar Bhartia, 77 years, was appointed as Non-Executive Independent

Director of the Company, for a period of five years with effect from 14th August, 2014 by way of passing ordinary resolution. The Board has recommended to the members to pass the resolution as Special Resolution for his existing term.

The first term of office for Shri Parimal Merchant as Independent Director expires on llth August, 2018 and for Shri Pradeep Goyal, Shri Vijay Kumar Bhartia and Shri B. K. Patodia, as Independent Directors, expires on 13th August, 2019.

The Board has recommended re-appointment of Shri Parimal Merchant, Shri Pradeep Goyal, Shri Vijay Kumar Bhartia and Shri B. K. Patodia, as Independent Directors of the Company for a second term of 5 (five) consecutive years.

KEY MANAGERIAL PERSONNEL

In terms of provisions of Section 203 of the Companies Act, 2013 Shri S. K. Nevatia, Chairman and Managing Director, Shri A.K. Nemani, Chief Financial Officer and Ms. Meenakshi Anchlia, Whole Time Company Secretary are the Key Managerial Personnel of your Company.

Shri Suramya Nevatia CEO, has been appointed as Key Managerial Personnel w.e.f. 1st June, 2018.

BOARD MEETINGS

The details of the number of meetings of the Board held during the financial year 2017-18 forms part of the Corporate Governance Report. The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Details of the Committees of the Board and other related information are given in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) we have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) proper systems had devised to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively; and

f) proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013.

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of Committees of the Board. The Board of Directors expressed their satisfaction with the evaluation process. The Independent Directors met separately on September 8, 2017 and February 13, 2018 to discuss the following:

(i) review the performance of Non-independent Directors and the Board as a whole;

(ii) review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;

(iii) assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All Independent Directors were present at the Meeting and discussed the above and expressed their satisfaction.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Companies.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financial year 2017-18, the Company has not given any loans, guarantees or made any investments as per the provisions of Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.

Further, there are no material related party transactions during the year under review. All related party transactions are mentioned in the Notes to the Financial Statements.

All Related Party Transactions are placed before the Audit Committee. Omnibus approval was obtained for transactions which are of repetitive nature. A statement giving details of all Related Party Transactions are placed before the Audit Committee for review and approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company viz. www.hirect.com.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. In line with these objectives the Company has adopted a Vigil Mechanism/Whistle Blower Policy to deal with instances of fraud and mismanagement.

During the year under review, no complaint was received by Company.. The 'Vigil Mechanism/Whistle Blower Policy' is uploaded on the website of the Company viz. www.hirect.com.

NOMINATION AND REMUNERATION POLICY

The Board of Directors had framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The policy is disclosed on the website of the Company viz. www.hirect.com.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013, all Companies having net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more during any three preceding financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of the Board of Directors comprising three or more Directors, at least one of whom should be an Independent Director and such Company shall spend at least 2% of the average net profits of the Company's three immediately preceding financial year.

Accordingly Company had constituted CSR Committee comprises Shri V.K. Bhartia (Chairman), Shri S. K. Nevatia and Smt. Akshada Nevatia (Members).

Due to losses in three preceding financial years, CSR is not applicable on the Company in reporting financial year 2017-18. Thus, report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is not required.

AUDIT COMMITTEE

An Audit Committee of the Board has been constituted in terms of the relevant provision of the Listing Regulations and Section 177 of the Companies Act, 2013. Constitution and other details of the Audit Committee are given in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Annual Report.

STATUTORY AUDITOR AND BRANCH AUDITOR

M/s. Ravi A. Shah & Associates, Chartered Accountants, Firm Registration No. 125079W (Statutory Auditor), M/s Ronak Gada & Associates, Chartered Accountants, Firm Registration No. 133987W (Branch Auditor of Dehradun Plants) and M/s Ratan Chandak & Co., Chartered Accountants, Firm Registration No. 108696W (Branch Auditor of Nasik Plant) were appointed for a term of 5 (five) consecutive years, at the Annual General Meeting held on September 8, 2017.

M/s. Ravi A. Shah & Associates, Chartered Accountants and M/s Ratan Chandak & Co., Chartered Accountants have confirmed that they are not disqualified from continuing as Auditors of the Company.

During the year M/s Ronak Gada & Associates, Chartered Accountants, firm merged and consequently there was a casual vacancy caused in the office of Branch Auditor. Since then Board has appointed M/s Gada Chheda & Co. LLP, Chartered Accountants, Firm Registration No. W100059, for a period of five consecutive years subject to approval of members in general meeting. Company has received a certificate from M/s Gada Chheda & Co. LLP, Chartered Accountants confirming their eligibility to be appointed as Branch Auditors of Dehradun Plants of the Company in terms of the provisions of the Companies Act, 2013 and Rules framed there under. The Board has recommended to the members to pass the resolution.

The observations of the auditors contained in their Report are self explanatory and therefore, do not call for any further comments. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer.

COST AUDITOR

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records.

The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s N. Ritesh & Associates, Cost Accountants, (Firm Registration Number 100675) as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

SECRETARIAL AUDITIOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s GMJ & Associates, a firm of

Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure B and forms an integral part of this report.

The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark. SECRETARIAL STANDARDS

The Board of Directors states that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly followed by the Company.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND ITS ADEQUACY

Adequate systems for internal controls provide assurances on the efficiency of operations, security of assets, statutory compliance, appropriate authorization, reporting and recording transactions. The scope of the audit activity is broadly guided by the annual audit plan approved by the top management and Audit Committee. The Internal Auditor prepares regular reports on the review of the systems and procedures and monitors the actions to be taken.

The Audit Committee of the Board of Directors reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

RISK MANAGEMENT

The Company has in place a Risk Management Policy which was reviewed by the Audit Committee and approved by the Board of Directors of the Company. The policy provides for a robust risk management framework to identify and assess risks such as operational, strategic, financial, regulatory, human resource and other risks and put in place an adequate risk management infrastructure capable of addressing these risks.

CODE OF CONDUCT

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity.

LISTING

The Company has listed it shares on BSE Limited and National Stock Exchange of India Limited. The Company is regular in payment of Listing Fees.

DEPOSITORY SERVICES

The Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services (India) Limited (CDSL). The Company has been allotted BIN No. INE835D01023.

Shareholders therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure C and forms an integral part of this Annual Report.

The information required pursuant to Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable because Company has not employed any employee drawing salary of Rs 8.5 lacs per month or Rs 1.02 Cr. per annum during the year under review.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The policy aims to provide protection to woman at the workplace and prevent and redress complaints

of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where woman feel secure. The Company has also constituted Internal Committees at all its locations to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2017-18. INFORMATION ON MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between 31st March, 2018 and 30th May, 2018 being the date of this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013, is annexed as Annexure A and forms an integral part of this report.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 Cthe Rules'), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demate account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on company's website viz. www.hirect.com.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The information pursuant to Section 134 (3)(m)of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure D and forms an integral part of this Report.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner so as to ensure safety of all concerned and compliances of environmental regulations.

The Company has taken all the necessary steps for safety, environmental control and protection at all plants. ACKNOWLEDGMENT

The Directors wish to convey their appreciation to the Company's shareholders, customers, suppliers, bankers and all the technology partners for the support they have given to the Company and the confidence, which they have reposed in its management and the employees at all levels for the commitment and dedication shown by them.

FORM MGT-9 EXTRACT OF ANNUAL RETURN

As on the financial year ended on 31st March, 2018

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10% or more of the total turnover of the Company shall be stated)

III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

IV. SHARE HOLDING PATTERN (Equity Share capital breakup as % of Total Equity)

(i) Category-wise Share Holding

* Change during the year in shareholding of Promoter and Promoter Group is due to Rights Issue and re-classification of certain persons from Promoter Group Category to Public Category vide receipt of approval from the National Stock Exchange of India Limited on 3rd October, 2017 and BSE Limited on 9th October, 2017 under Regulation 31(A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Shareholding of Promoter and Promoter Group is reduced by 4.46% due to reclassification.

(iii) Change in promoters'shareholding (please specify, if there is no change)

(iv) Shareholding Pattern of top 10 Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

(v) Shareholding of Directors and Key Managerial Personnel

Note: 1) Shareholdings of other Directors are Nil.

2) Shri A. K. Nemani, Chief Financial Officer and Ms. Meenakshi Anchlia, Company Secretary do not hold any shares in the Company.

3) * Equity Shares were allotted on rights basis on 6th December. 2017.

V INDEBTEDNESS

Indebtedness of the Comoanv includinq interest outstandinq / accrued but not due for payment

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to MD / WTD / Manager

(Rs in lacs)

B. Remuneration to other Directors

(Rs in lacs)

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD / Directors

(Rs in lacs)

VII PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES

(Rs in lacs)

FORM No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2018

(Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014)

To,

The Members,

HIND RECTIFIERS LIMITED

Lake Road, Bhandup west, Mumbai-400078

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by HIND RECTIFIERS LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the Financial Year ended on March 31, 2018, complied with the statutory provisions of the applicable Acts listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by HIND RECTIFIERS LIMITED for the Financial Year ended on March 31, 2018 according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;

ii. The Companies Amendment Act, 2017 (to the extent notified)

iii. The Securities Contracts (Regulation) Act, 1956 CSCRA) and the rules made thereunder;

iv. The Depositories Act, 1996 and the regulations and bye-laws framed thereunder

v. The Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment;

vi. The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 CSEBI Act') viz

a) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

c) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

e) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; [Not applicable during the period of audit]

f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations. 2008; [Not applicable during the period of audit]

g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009: [Not applicable during the period of audit]

i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 [Not applicable during the period of audit]

vii. We have also examined compliance with the applicable clauses of the Secretarial Standards I and II issued by The Institute of Company Secretaries of India.

Further, the Company being engaged in developing, designing, manufacturing and marketing of Power Semiconductors, Power Electronic Equipment & Railway Traction Equipment, there are no specific laws applicable to the Company, which require approvals or compliances under any Act or Regulations.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned above, to the extent applicable.

We report that the Compliance by the Company of applicable financial laws, like direct and indirect tax laws, has not been reviewed in this Audit since the same has been subject to review by statutory auditor and other designated professionals.

We report during the conduct of the audit, in our opinion, adequate systems exist in the Company to monitor and ensure compliance with general laws like various labour laws, environmental laws etc.

We further report that

1. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

2. Adequate notice is given to all Directors to schedule the Board Meetings, Board Committee Meetings, agenda and detailed notes on agenda were sent well in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decisions are carried through while the dissenting members' views, if any, are captured and recorded as part of Minutes.

3. That there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period,

1. The Company has issued and allotted 1505793 fully paid up equity shares of face value of Rs 2/- each for cash at a price of Rs 80/- per equity share (including share premium of Rs 78/- per share) aggregating upto Rs 1,204.63 Lacs to the existing shareholders on rights basis.

2. The Company has issued equity shares on rights basis to non-resident individuals and filed the relevant Form FCGPR within 30 days from allotment of shares. The status of Form FCGPR is pending for want of KYC report from overseas bank in a specified format.

Note : This report is to be read with our letter of even date which is annexed as 'ANNEXURE' and forms an integral part of this report

TO,

The Members,

HIND RECTIFIERS LIMITED

Lake Road, Bhandup West, Mumbai-400078

Our report of even date is to be read along with this letter:

1. Maintenance of secretarial records is the responsibility of management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of Financial records and books of accounts of the Company.

4. Wherever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of corporate and other applicable laws, rules and regulations, standards is the responsibility of the management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

(1) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2017-18 and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2017-18 are as under:

* Details not given, as they were not employed/appointed throughout in financial year 2016-17.

(2) The median remuneration of employees (excluding managerial personnel) of the Company during the financial year was ? 4.88 lacs.

(3) In the financial year, there was increase of 13.69% in the median remuneration of employees other than the managerial personnel.

(4) There were 228 permanent employees (excluding workers) on the rolls of the Company as on March 31, 2018.

(5) Average percentage increase in the salaries of employees (excluding managerial personnel) in the last financial year i.e. 2017-18 was 13.69%. Keeping in view the duties and responsibilities cast on the Chairman and Managing Director and considering his knowledge of various aspects relating to the Company's affairs, the percentage increase in the Managerial Remuneration for the same financial year was 61.30%.

(6) Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms that the remuneration is as per the remuneration policy for Directors, Key Managerial Personnel and other employees.

ANNEXURE "D" TO THE DIRECTORS' REPORT

Information under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 and forming part of the Directors Report for the year ended 31st March, 2018.

I CONSERVATION OF ENERGY

• Regular audit is being conducted to identify areas of energy wastage.

• Power Factor has been maintained at 1.00 to minimize the losses.

II TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION (i) Efforts made towards technology absorption

• Successful Indigenous development of Medium Frequency Electrostatic Precipitator Transformer Rectifier Sets with State of Art controller.

• Successful adoption of Analog Constant Current Regulator Controller for air cooled lightening to latest micro controller.

• SuccessfulIndigenousdevelopmentofActiveharmonicfilterforlndustrialApplicationforthesuccessful Indigenous development of Water Cooled Rectifier with 3 inch semi conductor devices for large power.

• New Technology absorption of Traction IGBT Converter with 3 Phase Locomotive is under process. (ii) Benefits derived as a result of the above efforts

• Enter into new markets and product segments.

• Quality and productivity improvement.

(ii) Expenditure incurred on Research and Development

III. FOREIGN EXCHANGE EARNING AND OUTGO