To the members of HEMADRI CEMENTS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of Hemadri Cements Limited(the Company) which comprises the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss Statement of Changes in Equity and statement of Cash Flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidfinancial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at 31 March 2019 and itsprofit for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibility of Management 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 (Standalone) financial statements that give a true and fair view of the financialposition financial performance of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the financialstatements management is responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. Those Boardof Directors are also responsible for overseeing the company's financial reportingprocess.
Auditor's Responsibility for the Audit of 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:
1.Identify and assess the 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.
2.Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
3.Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4.Conclude on the 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.
5.Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions 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 section 143 ofthe Companies Act we give in the Annexure A a statement on the matters specified in Para3 and 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 accounts as required bylaw have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet Statement of Profit and Loss(including the statement of OtherComprehensive Income ) the Cash Flow Statement and Statement of Changes in Equity dealtwith 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 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(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 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 financial statements. (Refer Note 33 to Financial Statements).
ii. The Company did not have any long-term contracts including derivative contracts forwhich there is no provision required for material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
ANNEXURE - A TO THE AUDITOR'S REPORT
With reference to the Annexure referred to in paragraph 1 under the headingReport on Other Legal and Regulatory Requirements of the Independent Auditor'sreport to the members of HEMADRI CEMENTS LTD on the accompanying IND AS financialstatements for the year ended 31st March 2019 we report that:
(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) We are informed that the management has physically verified the fixed assets of thecompany at reasonable intervals and no discrepancies have been noticed on suchverification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) We are informed that the management has physically verified the inventory atreasonable intervals and the discrepancies if any noticed have been properly dealt with inthe books of account.
(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 the clause iii (a) (b) and (c) does not arise.
(iv) In respect of loans investments guarantees and security the company hascomplied the provisions of sec 185 and 186 of the Companies act 2013 wherever applicable.
(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) In our opinion the prescribed accounts and records have been made and maintainedby the Company pursuant to the rules made by the Central Government for the maintenance ofcost records under sub-section (1) of section 148 of the Companies Act 2013.
(vii) (a) As per the information and explanations given to us the company is regularin depositing undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues applicable to itwith the appropriate authorities and there were no undisputed amounts payable which wereoutstanding as on 31.03.2019 for a period of more than six months from the date on whichthey became due.
(b) No dues of income tax or sales tax or service tax or duty of customs or duty ofexcise or value added tax which have not been deposited on account of any dispute exceptbelow :
|S. No. ||Nature of the Dues ||Forum where Dispute is pending ||Amount in Lakhs ||Period to which amount relates |
|1 ||Income Tax due ||Appeal before Income Tax Appelate Tribunal Hyderabad. ||265.86 ||A.Y 2008-09 |
(viii) As per the information and explanations given to us and on our examination ofrecords the company has not raised funds from banks financial institutions Governmentand Debenture holders during the year under review hence reporting under this clause doesnot arise.
ix) In our opinion and according to the information and explanations given to us and onour examination of the records of the company there are no fresh monies raised by way ofinitial public offer or further public offer (including debt instruments) and term loansduring the year under review.
(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) According to the information and explanations given to us and on our examinationof records of the Company the managerial remuneration has been paid or provided inaccordance with the provisions of Section197read with Schedule V to the Companies Act.
(xii) The Company is not a 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)According to the information and explanations given to us and on our examination ofrecords the company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review and theprovisions of section 42 of companies act 2013 are not applicable.
(xv) According to the information and explanations given to us and on our examinationof records 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.
Annexure B to Auditor's 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 2019 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 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 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.
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 2019 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 : 21.05.2019 ||M No: 026785 |