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Hemadri Cements Ltd.

BSE: 502133 Sector: Industrials
NSE: N.A. ISIN Code: INE07BK01011
BSE 05:30 | 01 Jan Hemadri Cements Ltd
NSE 05:30 | 01 Jan Hemadri Cements Ltd

Hemadri Cements Ltd. (HEMADRICEMENTS) - Auditors Report

Company auditors report

To the members of HEMADRI CEMENTS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of HEMADRI CEMENTS LIMITED ("theCompany") which comprise the Balance Sheet as at March 31 2022 the Statement ofProfit and Loss (including the statement of Other Comprehensive Income ) the Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as the "standalone financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under sec133of the Act read with the Companies (Indian Accounting Standards)Rules2015asamended("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 its profit (financialperformance including other comprehensive Income) its cash flows and the changes inequity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Companies Act 2013 (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

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

Emphasis of Matter

We draw attention to note no 5& 37 of the financial statements where in companyhas invested a sum of Rs.60 Lakhs in equity of HCL Agro power limited. And also pendingadvance of Rs.1773.48lakhs against there is a provision of Rs.530Lakhs is being carried.The management is of the opinion that the balance amount is recoverable in view of theassets held by the company which can be monetised.

Our Opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there were no key audit matters to be communicated in our auditreport.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexure to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Management's Responsibility for Standalone 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 including other comprehensive income / loss changes inequity and cash flows of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of 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 the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone 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 from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to 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.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the financial statements.

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 2020 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order.

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 accounts as required by law 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 standalone financial statements comply with theIndian Accounting Standards specified under section 133 of the Act.

(e) On the basis of written representations received from the directors as on March 312022 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of section 164 (2) ofthe Act;

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

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

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

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

i. The Company does not have any pending litigations which would impact its financialposition to the financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year 31st march 2022.

iv. The Management has represented that to the best of its knowledge and belief:

a. No funds (which are material either individually or in aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

b. No funds ( which are material either individually or in aggregate) have beenreceived by the Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries;

c. Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement

v. The Company did not propose declare or pay dividends during the year ended 31 March2022

Annexure A to the INDEPENDENT AUDITOR'S REPORT

of even date to the members of HEMADRI CEMENTS LIMITED on the financial statements forthe year ended 31 March 2022

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Based on the audit procedures performed for the purpose of reporting a true and fairview of the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of accounts and other recordsexamined by us in the normal course of audit and to the best of our knowledge we reportthat:

i. in respect of the Company's property plant and equipment and intangible assets:

(a) a. the Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

b. the Company has maintained proper records showing full particulars of intangibleassets.

(b) the Company has a program of physical verification of property plant and equipmentat regular intervals so to cover all the assets which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification

(c) the title deeds of all the immovable properties (other than properties where theCompany is the lessee and the lease agreements are duly executed in favour of the lessee)disclosed in the financial statements included under property plant and equipment areheld in the name of the Company

(d) the Company has not revalued any of its property plant and equipment andintangible assets during the year

(e) no proceedings have been initiated during the year or are pending against theCompany as at 31 March 2022 for holding any benami property under the Benami Transactions(Prohibitions) Act 1988 (as amended in 2016) and rules made thereunder

ii. (a) the Company has a program of physical verification of inventory at regularintervals which in our opinion is reasonable having regard to the size of the Companyand the nature of its inventory. According to the information and explanations given tous no material discrepancies were noticed on such verification.

(b) the Company has availed working capital facilities in excess of INR 5 Crores frombanks / financial institutions on the basis of security of current assets and thequarterly returns / statements filed by the Company are in agreement with the books ofaccounts.

iii. The Company has not made investments or provided guarantee or security or grantedloans or advances secured or unsecured to Companies Firms Limited LiabilityPartnerships or any other parties during the year and hence reporting under clause 3(iii)of the Order is not applicable:

iv. the Company has complied with the provisions of section 185 and 186 of the Act inrespect of loans granted investments made and guarantees and securities provided asapplicable

v. the Company has not accepted any deposits from the public and hence the directivesissued by RBI and the provisions of section 73 to 76 or any other relevant provisions ofthe Act and the Companies (Acceptance of Deposit) Rules 2015. Hence reporting underclause 3(vi) of the Order is not applicable.

vi. We have broadly reviewed the books of accounts and records maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of CostRecords under section 148(1) of the Companies Act 2013 and we are of the opinion thatprima facie the prescribed accounts and records have been made and maintained.

vii. in respect of statutory dues:

(a) the Company is regular in depositing undisputed statutory dues including providentfund employees' state insurance income-tax goods and service tax duty of customs cessand other material statutory dues applicable to it with the appropriate authorities thoughthere has been a slight delay in a few cases. There were no undisputed amounts payablewhich were outstanding as on 31 March 2022 for a period of more than six months from thedate on which they became payable

(b) details of statutory dues referred to in sub-clause (a) above which have not beendeposited as on 31 March 2022 on account of disputes are given below:

Name of the statute Amount in INR Lakhs Period to which the amount related to Forum where the dispute is pending
NIL

viii. there were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961.

ix. (a) the Company has not defaulted during the year in repayment of dues to anylender during the year.

(b) the Company has not been declared a willful defaulter by any bank of financialinstitution or government or any government authority

(c) the Company has not taken any term loan during the year.

(d) on an overall examination of the financial statements of the Company funds raisedon short term basis have prima facie not been used during the year for long-termpurposes by the Company

(e) on an overall examination of the financial statements of the Company the Companyhas not taken funds from any entity or person on account of or to meet the obligations ofits subsidiaries / joint ventures / associates.

(f) the Company has not raised loans during the year on the pledge of securities heldin its subsidiaries / joint ventures / associate companies and hence reporting underclause 3(ix)(f) is not applicable.

x. (a) the Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) is not applicable.

(b) the Company has not made any preferential allotment or private placement of sharesor convertible debentures (fully or partly or optionally) and hence reporting under clause3(x)(b) of the Order is not applicable

xi. (a) no reporting under sub-section (12) of section 143 of the Companies Act hasbeen filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government during the date of this report.

(b) no fraud by the Company and no fraud on the Company has been noticed or reportingduring the year.

(c) as informed by the Company there were no whistle-blower complaints received duringthe year.

xii. the Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

xiii. In our opinion the Company is in compliance with sections 177 and 188 of theAct where applicable and the requisite details have been disclosed in the financialstatements etc. as required by the applicable accounting standards

xiv.

(a) in our opinion and based on our examination the Company has an adequate internalaudit system commensurate with the size and the nature of its business.

(b) we have considered the internal audit reports of the Company issued during the yearand till date.

xv. the Company has not entered into any non-cash transactions its directors or personsconnected with its directors and hence provisions of section 192 of the Act are notapplicable to the Company.

xvi. in our opinion the Company is not required to registered under section 45-IA ofthe Reserve Bank of India Act 1934 and hence reporting under clause 3(xvi) and itssub-clauses of the Order is not applicable

xvii. the Company has not incurred cash losses during the financial year covered by ouraudit and in the immediately preceding financial year

xviii. there has been no resignation of the statutory auditors of the Company duringthe year

xix. on the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

xx. (a) there are no ongoing projects as defined under sub-section (5) of section 135of the Act and hence reporting under clause 3(xx)(a) of the Order is not applicable

(b) there are no unspent amount as defined under under sub-section (5) of section 135of the Act and hence reporting under clause 3(xx)(b) of the Order is not applicable

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of HEMADRI CEMENTS LIMITED of evendate)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 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 March 31 2022 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition useor disposition of the company's assets that could have amaterial effect on the financial statements.

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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2022 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For B. Purushottam& Co
Chartered Accountants
Firm Registration Number: 002808S
K.V.N.S Kishore
Partner
Membership number: 206734
UDIN: 22206734AJTNGE5775
Place: Chennai
Date: 27.05.2022

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