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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 Standalone FI nancial Statements Opinion

We have audited the standalone financial statements of Hemadri Cements LimitedpheCompany") which comprise the Balance Sheet as at March 312020 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 312020 its Profit (financialperformance including other comprehensive Income) its cash flows and the changes inequity forthe 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 inaccordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

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

The Company's Board of Directors is responsible forthe other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures 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.

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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 atrue 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 Responsibilitiesfor 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 d ue 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 standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughoutthe 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 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.

5. Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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.

Other Matters

On account of the COVID-19 related lock-down restrictions management was able toperform year end physical verification of inventories subsequent to the year end. Alsowewere not able to

physically observe the verification of inventory that was carried out by theManagement. Consequently we have performed alternate procedures to audit the existence ofInventory as per the guidance provided by in SA 501 "Audit Evidence - SpecificConsiderations for Selected Items" and have obtained sufficient audit evidence toissue our unmodified opinion. Our report on the Statement is not modified in respect ofthis matter.

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 of theCompanies Act

we give in the Annexure A a statement on the matters specified in Para 3 and 4 of thesaid

Order.

2. As required by Sectionl 43 (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 31s"March 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 ofSection 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 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 34B 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.

For B. PURUSHOTTAM & CO

Chartered Accountants (Firm Regn.No.002808S)

B.S.PURSHOTHAM
Place : Chennai Partner
Date : 29" June 2020. 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 31" March 2020 we report that:

(i) (a) The company is maintaining proper records showing full particularsincluding

quantitative 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) In our opinion the inventories have been physically verified during the year bythe management at reasonable intervals and as explained to us no material discrepancieswere noticed on physical verification.

(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 any deposits within the meaning of sections 73to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed there under.Hence reporting under clause (v) oftheOrderdoes notarise.

(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 goods and service tax and other material statutorydues applicable to it with the appropriate authorities and there were no undisputedamounts payable which were outstanding as on 31.03.2020 for a period of more than sixmonths from the date on which they became d ue

(b) No dues of income tax or sales tax or service tax or duty of customs or duty ofexcise or value added tax or goods and service tax which have not been deposited onaccount of any dispute except below:

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 AY 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 on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(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 Section 197 read with Schedule V to the Companies Act.

(xii) The Company is not Nidhi Company hence reporting underthis clause does not arise.

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

(xiv) According to the information and explanations given to us and on our examinationof records the company has not made any preferential allotment or private placement of

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shares 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 based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) In our opinion and according to information and explanations provided to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

For B. PURUSHOTTAM & CO
Chartered Accountants
(Firm Regn.No002808S)
Place: Chennai B.S.PURSHOTHAM
Partner
Date : 29.06.2020 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 31s' March 2020 in conjunctionwith our audit of the Stand alone financial statements of the Company for the year endedon 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.

Auditor's 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 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.

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 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B. PURUSHOTTAM & CO

Chartered Accountants (Firm Regn.No.002808S)

Place: Chennai B.S.PURSHOTHAM
Partner
Date : 29.06.2020 M No: 026785

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