TO THE MEMBERS OF
M/s. HIGH ENERGY BATTERIES (INDIA) LIMITED
Report on the audit of Financial Statements Opinion
We have audited the Standalone Financial Statements of HIGH ENERGY BATTERIES (INDIA)LIMITED
("the Company") which comprise the Balance Sheet as at March 31 2022 andthe Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and Notes to theFinancial Statements including a summary of explanatory information hereinafter referredto as Financial theSignificant
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 ("Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 the Profit (Including OtherComprehensive Income) the changes in Equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143 (10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditors'Responsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matters ||Response to Key Audit Matters & Conclusion |
|1. As on 31st March 2022 the Inventories (Note no 6 carrying value Rs 3542.81 Lakhs) are valued at lower of cost and net realizable value. ||We understood and tested the design and operating effectiveness of controls with respect to receipt issues year end physical verification and valuation of inventories. |
|We considered the value of Inventories as key audit matter considering the relative size of it in the financial statements. ||We applied standard audit procedures during physical verification including recheck of the physical stock of selected items. |
| ||We have verified the cost calculation with the relevant record and also the orders from the customers for comparison of the selling prices with the cost. |
| ||Based on the above audit procedures we have concluded that the management's determination of the value of Inventories is reasonable and in accordance with Ind AS 2 Inventories. |
|2. Note No 12 - Other current Assets - Material receivable from Customers as on 31.03.2022 Rs 376.45 Lakhs being a significant account balance we have considered this as a key audit matter ||We have verified the Contract with Customers. |
| ||We have tested the internal control procedures for usage of materials on customer account and receipt of Materials from Customers. |
| ||Based on the test checks and audit procedures applied by us we are satisfied on the Balance of Material Receivable from the customers. |
| ||We have also verified the evidences for subsequent receipt of the materials. |
|3. Trade Receivable as on 31.03.2022 is Rs 1969.76 Lakhs is considered as a Key Audit Matter being a significant account balance in the financial statements. ||We have tested the internal control procedures in the area of sales dispatches. |
| ||We have verified the sales amounts with the orders from customers and documents relating to transfer of control to customers. |
| ||We have also applied our alternate audit procedures such as verification of the internal and external evidence for dispatch of the goods for major items and subsequent bank receipts. |
| ||Based on the audit procedures performed we are satisfied that the amount stated in the financial statements is in line with accepted accounting procedures and applicable accounting standards. |
Information Other Than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information in the AnnualReport comprising of the Director's report and its annexures but does not include thestandalone financialstatements 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 Responsibility and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(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) Changes in Equityand Cash Flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Financial Statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibilities for the Audit of the 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 auditors' 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 weexercise professional judgment and maintain professional skepticism throughout the audit.
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.
Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate Internal Financial Controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
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
Company's ability to continue as a going concern. If weconditionsthatmaycastsignificant conclude that a material uncertainty exists we arerequired to draw attention in our auditors' report to the related disclosures in theStandalone 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 ourauditors' 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 FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the quantitative materiality and qualitative factors in(i) FinancialStatementsmaybeinfluenced. planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the Financial Statements.
We communicate with those charged with governance regarding among other matters theplanned scope including any significant andtimingoftheauditandsignificant deficiencies inInternal 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 (Auditors' Report) Order 2020 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the CompaniesAct 2013 we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 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 law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the Directors as on 31stMarch 2022 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March
2022 from being appointed as a Director in terms of Section 164(2) of the 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 our separate Reportin "Annexure A".
g) With respect to the other matters to be included in the Auditors' 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 Auditors' 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 notes to financial statements). ii. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by thecompany.
iv. (a) The management has represented that to the best of the knowledge and belief asdisclosed in the note to the financial statements no funds have been advanced or loanedor invested
(either from borrowed funds or share premium or any other sources or kind of funds) bythe division to or in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the intermediary shall whether directly or indirectly lend or invest inother persons or entities Identifiedin 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) The management has represented that to the best of its knowledge and belief asdisclosed in the note 36 (D) (i) (a) & (b) to financial statements no funds have beenreceived by the division from any persons or entities including foreign entities("funding Parties") with the understanding whether recorded in writing orotherwise that the division shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries ; and
(c) Based on such audit procedures we have considered reasonable and appropriate in thecircumstances nothing has come to the notice that has caused us to believe that therepresentations under sub-clause (i) and (ii) of Rule 11 (e) contain any materialmisstatement. v) (a) The final dividend paid by the Company during the year in respect ofthe same declared for the previous year is in accordance with section 123 of the CompaniesAct 2013 to the extent it applies to payment of dividend.
(b) As stated in note 13 to the financial statements the Board of Directors of theCompany have proposed final dividend for the year which is subject to the approval of themembers at the ensuing Annual General Meeting. The dividend proposed is in accordance withsection 123 of the Act to the extent it applies to declaration of dividend.
| ||For M/s. MAHARAJ N R SURESH AND CO LLP |
| ||Chartered Accountants |
| ||Firm Regn. No. 001931S/S000020 |
| ||N R Suresh |
| ||Partner |
| ||Membership No. 021661 |
| ||UDIN:22021661AIPHY07866 |
|Place : Chennai || |
|Date : May 07 2022 || |
ANNExURE "A" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF HIGH ENERGY BATTERIES (INDIA) LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act").
We have audited the Internal Financial Controls over Financial Reporting of HIGHENERGY BATTERIES (INDIA) LIMITED ("the Company") as of March 31 2022 inconjunction with our audit of the Standalone Ind AS Financial Statements of the Companyfor 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 Controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance ofadequateinternalfinancialcontrols that were operating effectively for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required 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 ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate Internal Financial Controls over FinancialReporting was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the Internal Financial Controls System over Financial Reporting and theiroperating effectiveness. Our audit of Internal Financial Controls over Financial Reportingincluded obtaining an understanding of Internal Financial Controls over FinancialReporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditors' judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficientand 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: (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) 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 (iii) 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 March 31 2022 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 ICAI.
For M/s. MAHARAJ N R SURESH AND CO LLP
Chartered Accountants Firm Regn. No. 001931S/S000020
| ||N R Suresh |
| ||Partner |
| ||Membership No. 021661 |
| ||UDIN: 22021661AIPHY07866 |
|Place : Chennai || |
|Date : May 07 2022 || |
ANNExURE "B" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF HIGH ENERGY BATTERIES (INDIA) LIMITED
The Annexure referred to in Paragraph 2 under the heading Report on Other Legaland Regulatory Requirements' of our Report of even date: (i) (a) (A) The Company ismaintaining proper records showing full particulars including quantitative details andsituation of Property Plant and Equipment; (B) The company is maintaining proper recordsshowing full particulars of intangible assets;
(b) These Property Plant and Equipment have been physically verified by the Managementat the year end and no material discrepancies were noticed on such verification.
(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 are held in the name of the Company.
(d) The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or intangible assets or both during the year.
(e) According to the information and explanations given to us no proceedings have beeninitiated or are pending against the company for holding any benami property under theBenami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.
(ii) (a) The Management has conducted physical verification of inventory at reasonableintervals and in our opinion the coverage and procedure of such verification by themanagement is appropriate ; discrepancies of 10% or more were not noticed.
(b) The company has been sanctioned working capital limits of Rs 7500 Lakhs (Both fundand non-fund based) by banks. The quarterly returns or statements filed by the companywith the banks or financial institutions are in agreement with the books of account of theCompany / the differences are not material.
(iii) During the year the Company has not made investments in provided any guaranteeor security or granted any loans or advances secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties. (iv) The Company has complied with theprovisions of Sections 185 and 186 of the Companies Act 2013 in respect of loansinvestments provided by the Company. (v) The Company has not accepted any deposits fromthe public and hence the directives issued by the Reserve Bank of India and the provisionsof Sections 73 to 76 or any other relevant provisions of the Act and the Companies(Acceptance of Deposit) Rules 2015 with regard to the deposits accepted from the publicare not applicable.
(vi) The Central Government has prescribed maintenance of Cost Records underSub-section (1) of Section 148 of the Companies Act 2013. We have broadly reviewed thebooks of account maintained by the company pursuant to the rules made by the centralGovernment for the maintenance of cost records under Section 148 of the Act and are ofthe opinion that prime facie the prescribed and such accounts and records have been madeand maintained.
(vii) According to the information and explanations given to us in respect of Statutorydues :
(a) The Company is regular in depositing undisputed Statutory dues including Goods andService Tax Provident Fund Employees' State Insurance Income Tax Sales Tax Duty ofCustoms Cess and any other Statutory Dues to the appropriate authorities and there wereno undisputed amounts payable which were in arrears as at 31st March 2022 for a period ofmore than six months from the date they became payable.
(b) There are no dues of Income Tax or Sales Tax or Service Tax or Duty of Customs orDuty of Excise or Value Added Tax Cess and Goods and Service Tax that have not beendeposited as on 31st March 2022 on account of disputes. (viii) There are no transactionsrelating to previously unrecorded income in the books of account that have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961).
(ix) (a) The Company has not defaulted in repayment of loans or other borrowing or inthe payment of interest thereon to any lender;
(b) The Company is not declared as a wilful defaulter by any bank or financialinstitution or other lender; (c) The term loans were applied for the purpose for which theloans were obtained; (d) The funds raised on short term basis have not been utilised forlong term purposes; (e) The Company has not taken any funds from any entity or person onaccount of or to meet the obligations of its subsidiaries associates or joint ventures;(f) The company has not raised loans during the year on the pledge of securities held inits subsidiaries joint ventures or associate companies; (x) (a) The Company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) during the year.
(b) The company has not made any preferential allotment or private placement of sharesor convertible debentures (fully partially or optionally convertible) during the year andhence the requirements of section 42 and section 62 of the Companies Act 2013 is notarising; (xi) (a) The Company has not noticed or reported during the year any fraud by theCompany or any fraud on the Company.
(b) There is no report under sub-section (12) of section 143 of the Companies Act hasbeen filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Auditand Auditors) Rules 2014 with the Central Government; (c) There are no complaintsreceived during the year under whistle-blower Mechanism; (xii) The Company is not a NidhiCompany and hence complying with the provisions of the Nidhi Rules 2014 does not arise.
(xiii) All transactions with the related parties are in compliance with Sections 177and 188 of the Companies Act 2013 where applicable and the details have been disclosedin the Financial Statements etc. as required by the applicable Accounting Standards.
(xiv) The Company has an internal audit system commensurate with the size and nature ofits business. We have considered the internal audit reports issued till date; (xv) TheCompany has not entered into any non-cash transactions with Directors or persons connectedwith him. (xvi) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.
(xvii) The company has not incurred cash losses in the financial year and in theimmediately preceding financial year.
(xviii) There has been no instance of any resignation of the statutory auditorsoccurred during the 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) The companyhas spent the minimum amount required to be spent as stipulated in section 135 of theCompanies Act and hence the transfer of unspent amount to a Fund specified in Schedule VIIto the Companies Act in compliance with second proviso to sub-section (5) of section 135of the said Act. The company does not have any on going projects under Section 135) of thesaid Act. (xxi) The company has no subsidiaries and therefore this clause is notapplicable.
| ||For M/s. MAHARAJ N R SURESH AND CO LLP |
| ||Chartered Accountants |
| ||Firm Regn. No. 001931S/S000020 |
| ||N R Suresh |
| ||Partner |
|Place : Chennai ||Membership No. 021661 |
|Date : May 07 2022 ||UDIN: 22021661AIPHY07866 |