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Hemadri Cements Ltd.

BSE: 502133 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Hemadri Cements Ltd. (HEMADRICEMENTS) - Auditors Report

Company auditors report

To the members of HEMADRI CEMENTS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Hemadri Cements Limited ("theCompany") which comprises the Balance Sheet as at 31s'March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and .cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which . are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act we give in the Annexure a statement on the matters specified in Para 3and 4 of the said Order.

2) As required by Section143 (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 so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31s1March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31slMarch 2016 from being appointed as a director in termsof Section 164(2) of the Act.

(f) With respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in " Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 ot 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 no litigation impacting its financial position which need to bedisclose in its financial statements

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.

For B.PURUSHOTTAM & CO
Chartered Accountants
(Firm Regn.No.002808S)
B.S. PURSHOTHAM
Place : Chennai Partner
Date : 31.5.2016 M No : 026785

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

With reference to the Annexure referred to in paragraph 1 under the heading"Report on Other Legal and Regulatory Requirements" of the Independent Auditor'sreport to the members of Hemadri Cements Limited on the financial statements for the yearended 31s' March 2016 we report that:

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

(b) Fixed Assets have been physically verified by the management at reasonableintervals. Materials discrepancies if any found during physical verification have beenproperly deajt with in the books of accounts.

(c) The title deeds of immovable properties are held in the name of the company.

i ii) Physical verification of inventory has been conducted at reasonable intervals bythe management and the material discrepancies if any found during physical verificationhave been properly dealt with in the books of accounts.

(iii; The company has not granted loans secured or unsecured to companies covered inthe register maintained under section 189 of the Companies Act 2013 hence reportingunder this clause does not arise.

(iv) The Company has not made any loans made any investments gave guarantees andsecurity hence reporting under this clause does not arise.

(v) The company has not accepted deposits within the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed thereunder.

(vi) Maintenance of cost records has been specified by the central government undersub-section (1) of section 148 of the Companies Act 2013 and such accounts and recordshave been so made and maintained.

(vii) (a) The company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues to theappropriate authorities.

b) No dues of income tax or sales tax or service tax or duty of customs or duty ofexcise or value added tax have not been deposited on account of any dispute except for:

S.No. Nature of the Dues Forum where Dispute is pending Amount (Rs.) Period to which amount relates Remarks
1. Income Tax due Appeal before Commissioner of Income Tax Hyderabad 52.50 A.Y 2012-13 Out of this amount Rs. 35 Lakhs paid as on the date of financials leaving a balance outstanding of Rs. 17.50 • Lakhs only.
2. Income Tax due Appeal before Income Tax Appelate Tribunal Hyderabad. 265.86 A.Y 2008-09

(viii) The company has not borrowed any loans or borrowings from FinancialInstitutions Bank Government Debenture holders hence reporting under this clause doesnot arise.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loans.

(x) According to the information and explanations given to us no fraud by the companyor no fraud on the Company by its officers or employees has been noticed or reportedduring the year.

(xi) The Company has paid or provided managerial remuneration in accordance with therequisite approvals requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act.

(xii) The Company is not Nidhi Company hence reporting under this clause is notapplicable.

(xiii) All transactions with the related parties are in compliance with sections 177and 188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards;

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review hencereporting under this clause does not arise.

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For B.PURUSHOTTAM & CO
Chartered Accountants
(Firm Regn.No.002808S)
B.S. PURSHOTHAM
Place : Chennai Partner
Date : 31.5.2016 M No : 026785

Annexure B to Auditors' Report of even date

Report on the Internal Controls on Financial Controls under clause (i) of sub-section(3) of section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HemadriCements Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note 'on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘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 safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriatedprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India. .

For B.PURUSHOTTAM & CO
Chartered Accountants
(Firm Regn.No.002808S)
B.S. PURSHOTHAM
Place : Chennai Partner
Date : 31.5.2016 M No : 026785