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Hardcastle & Waud Mfg Co Ltd.

BSE: 509597 Sector: Others
NSE: N.A. ISIN Code: INE722D01015
BSE 00:00 | 24 Jun 289.80 9.95
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NSE 05:30 | 01 Jan Hardcastle & Waud Mfg Co Ltd
OPEN 296.70
PREVIOUS CLOSE 279.85
VOLUME 25
52-Week high 392.00
52-Week low 217.00
P/E 15.50
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 296.70
CLOSE 279.85
VOLUME 25
52-Week high 392.00
52-Week low 217.00
P/E 15.50
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hardcastle & Waud Mfg Co Ltd. (HARDCASTWAUD) - Auditors Report

Company auditors report

To Members of

Hardcastle and Waud Manufacturing Company Limited

Report on the Audit of the Indian Accounting Standards ("fnd AS") FinancialStatements Opinion

We have audited the accompanying ind AS financial statements of Hardcastle and WaudManufacturing Company Limited ("the Company") which comprise the Balance Sheetas at 31st March 2021 the Statement of Profit and loss {including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of the significant accounting policies andother explanatory information (hereafter referred to as "Ind AS FinancialStatements'').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid ind AS financial statements give the information required bythe 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 31st March 2021 its profit andtotal comprehensive loss its changes in equity and its cash flow for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing {'SAs') specified under section 143(10) of the Act Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India ('ICAI') together with the ethicalrequirements that are relevant to our audit of the Ind AS financial statements underprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

Valuation of Investments

The Company's investment portfolio consist of Investments in Financial Assets which represent 34.81 per cent of the Company's total assets. Our audit procedures for this area included:
Current Investments are stated at market value determined on an individual investment basis. • We assessed appropriateness of the pricing methodologies with reference to Company's accounting and valuation policy;
In respect of the portfolio of quoted investments we do not consider these investments to be at a high risk of significant misstatement or to be subject to a significant level of judgement because they comprise liquid quoted investments. - We have assessed the process and tested the operating effectiveness of the key controls including the Company's method of review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls;
However due to their materiality in the context of the financial statements as a whole they are considered to be one of the areas which had significant impact on our overall audit strategy. For quoted investments recalculated the valuations of investments with
The portfolio of unquoted investments which includes equity shares is 34.39 per cent of the Company's Total Assets. • independent pricing sources; For unquoted investments we critically evaluated the valuation assessment and resulting conclusions conducted by an independent valuer in order to determine appropriateness of the valuations recorded with reference to the
Valuation of unquoted investments involves judgement depending on the observability of the inputs into the valuation and further judgement in determining the appropriate valuation methodology where external pricing sources are either not readily available or are unreliable.
Refer Note no. 4 to the Ind AS Financial Statements and Note no. 1.17(v) of the significant accounting policies.

Investment Properties

The Company's investment properties consist of premises. Our audit procedures for this area included:
Investment Properties of the Company represents 40.31 per cent of the Company's total assets. • We have verified whether each of the investment in properties are purchased to be held for capital appreciation or for earning rental income so as to classify it under investment properties.
Investment properties are valued at cost as per Ind AS 40. Refer Note no. 1.05 of Significant Accounting Policies and Note no. 3 to the Ind AS Financial Statements. . We assessed the method of verification and valuation of properties to ensure its reasonableness in the circumstances relating to each asset class.

Evaluation of uncertain Tax positions

The Company has pending litigation matters with various appellate authorities and at different forums. Our audit procedures for this area included:
The Company has material uncertain tax positions including matters under dispute which involve significant judgment to determine the possible outcome of these disputes. • Obtained details of completed tax assessment and demands for the year ended 31sl March 2021 from management.
Refer Note 27.01 to the Ind AS Financial Statements. • We have reviewed the management's underlying assumptions in estimating the tax provisions and the possible outcome of the disputes.
• Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions.
• Additionally we considered the effect of new information in respect of uncertain tax positions to evaluate whether any change was required to management's position on these uncertainties.

Emphasis of Matter

We draw attention to Note 2717 of the Ind A5 Financial Statements which describes thepossible effect of uncertainties relating to COVID-19 pandemic on the Company's financialperformance as assessed by the management. Our opinion is not modified in this matter.

Other Matters

Due to COVID-19 pandemic and the lockdown and other restrictions imposed by theGovernment and local administration the audit processes were carried out based on theremote access to the extent available/feasible and necessary records made available by themanagement through digital medium. Our opinion is not modified in this matter.

Information Other than the Ind AS Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for preparation of the otherinformation. Other information comprises the information included in the ManagementDiscussion and Analysis of the Board's Report including Annexures thereto to CorporateGovernance and Shareholder's Information but does not include the Ind AS FinancialStatements and our auditor's report thereon.

Our opinion on the Ind AS Financial Statements does not cover the other information andwe will not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS Financial Statements our responsibility isto read the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the Ind ASFinancial Statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those charged with Governance for the Ind ASFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5} of the Act with respect to preparation of these Ind AS Financial Statements thatgive a true and fair view of the financial position financial performance Othercomprehensive income changes in equity and cash flows of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with provisions of the Act for safeguarding 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 accuracy and completeness of theaccounting records relevant to preparation and presentation of the Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Ind AS Financial Statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

i. Identify and assess risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

ii. 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 system in place and the operating effectiveness ofsuch controls.

iii. Evaluate appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

iv. Conclude on appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

v. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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 sectionl43 ofthe Act we give in Annexure "A" hereto a statement on the matters specified inparagraph 3 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 explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by taw have been kept by theCompany so far as appears from our examination of those books;

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

d) In our opinion the aforesaid Ind AS Financial Statements comply with the IndianAccounting standards specified under section 133 of the Act read with Company (IndianAccounting Standard) Rules 2015 as amended;

e) In our opinion there are no financial transactions or matters which may have anyadverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on 31s'March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 315t March 2021 from being appointed as a director interms of section 164 (2) of the Act;

g) With respect to adequacy of the internal financial controls over financial reportingof the Company and operating effectiveness of such controls refer to our separate reportin "Annexure B"; and

h) With respect to other matters to be included in the Auditor's Report in accordancewith the requirements of section 197(16) of the Act as amended:

In our opinion to the best of our information and according to the explanations givento us no remuneration has been paid by the Company to its directors during the year

i) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 Ind AS Financial Statements Refer Note Nos. 2701 27.15 and 27.16 of IndAS Financial Statements.

ii. The Company does not have any long-term contracts including derivative contracts;as such the question of commenting on any foreseeable losses thereon does not arise

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

Annexure "A" to the Independent Auditor's Report

(i) (a) The Company has maintained records showing full particulars includingquantitative details and situation of fixed assets in electronic form;

(b) According to the information and explanations given to us fixed assets werephysically verified at the year end by the management in accordance with a phased mannerof verification which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. No material discrepancies have been noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us we report that the title deeds of all immovable properties are held in the name ofthe Company as at the balance sheet date. In respect of Leasehold land the lease deed isin the name of the Company;

(ii) According to the information and explanations given to us physical verificationof inventory has been conducted at reasonable intervals by the management during the yearand no material discrepancies were noticed However the company has no inventory as atyear end.

(iii) The Company has not granted loans secured or unsecured to any firms companiesor other parties covered in the register maintained under Section 189 of the Company'sAct 2013 ( the Act) and hence provisions of clauses (iii) of paragraph 3 of the Order arenot applicable to the Company;

(iv) The Company has not granted any loans to or provided any guarantee or security onbehalf of the parties covered under Section 185 of the Act and in respect of investmentsmade the Company has complied with provisions of section 186 of the Act;

(v) The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the rules framed there under;

(vi) The Central Government of India has not prescribed maintenance of cost recordsunder subsection (1) of Section 148 of the Act for any of the activities of the Company;

(vii) According to records of the Company examined by us and the information andexplanations given to us:

(a) The Company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax goods and service tax duty ofcustoms cess and other statutory dues with appropriate authorities. There were noundisputed amounts payable for a period of more than six months from the date they becamepayable;

(b) Details of dues of Sales tax and income tax which have not been deposited as at 31ilMarch2021 on account of disputes are given below :

Name of statute Nature of dues Forum where dispute is pending Period to which the amount relates (F.Y.) Amount (In Rs.)*
Sales Tax Sales Tax Deputy Commissioner (Ct) Chennai 2002-032003- 04 2004-05 465848
Sales Tax Sales Tax Appellate Assistant Commissioner Chennai 2009-102010- 11 84299
Sales tax Sales tax Assessing Officer 2004-05 330744
Sales Tax Sales Tax Deputy Commissioner Appeal(Mumbai) 2013-2014 250473
Sales Tax CST Deputy Commissioner Appeal (Mumbai) 2012-2013 536431
Income Tax Income Tax Jurisdictional AO 2008-2009 802
Income Tax Income Tax Centra! Processing Cell 2009-2010 1284140

*The amount includes Rs.351952/- which has been deposited with Sales Tax Authoritiesin respect of contested demands raised against the Company.

(viii) The Company has not taken any loan from any financial Institution bank orgovernment and has not issued any debentures;

(ix) The Company has not raised money by way of initial public offer or further publicoffer. Further no term loans were availed during the year.

(x) To the best of our knowledge and belief and according to the information given tous no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year;

(xi) During the year the company has not paid any managerial remuneration.Accordingly the provisions of clause 3(xi) of the said order are not applicable to thecompany;

(xii) As the Company does not fall into the category of a Nidhi company clause (xii)of para 3 of the Order is not applicable to the Company;

(xiii) According to the information and explanations given to us all transactions withrelated parties are in compliance with Sections 177 and 188 of the Act wherever applicableand details have been disclosed in the Ind AS Financial Statements as required byapplicable 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;

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with them underprovisions of section 192 of Act; and

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

Annexure- "B" to The Independent Auditor's Report

Report on Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143of the Act

We have audited the internal financial controls over financial reporting of Hardcastleand Waud Manufacturing Company Limited ("the Company") as of 31^ March 2021 inconjunction with our audit of the Ind AS Financial Statements of the Company for the yearended 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. These responsibilities includedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring orderly and efficient conduct of its businessincluding adherence to Company's policies safeguarding of its assets prevention anddetection of frauds and errors accuracy and completeness of accounting records andtimely preparation of reliable financial information as required under the Companies Act2013 (the Act).

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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such control operatedeffectively in all material respects.

Our audit involved performing procedures to obtain audit evidence about adequacy of theinternal 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 auditors' judgment including assessment of the risks of materialmisstatement of the IndAS Financial Statements whether due to fraud or error.

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 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 reliability of financial reporting andpreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

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

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of inherent limitations of internal financial controls over financialreporting including possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering essential components of internal control stated in the Guidance Note on Auditof internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For GMJ & Co.
Chartered Accountants
Firm No. 103429W
CA Atul Jain
Partner
M. No. 037097
UDIN; 21037097AAAADI1216
Place: Mumbai
Date: 16th June 2021

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