To the Members of
HINDUSTAN HARDY LIMITED.
(Formerly Known as Hindustan Hardy Spicer Limited)
Report on the Financial Statements
We have audited the accompanying financial statements ofHindustan Hardy Limited("the Company") which comprise the Balance Sheet as at 31st March2020 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements")
In our opinion and to the best of our information and according to the explanationsgiven to us the Companies Act 2013 ("the Act") aforesaidfinancial in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 st 2020 the profit and total comprehensive income changes in equity and its cashflows 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 Act. 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 Auditor's of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made there-underand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
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.
We have determined that there are no audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report andShareholder's Information but does not include the financial statements and our auditor'sreport thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the
Act with respect to the preparation of these financial statements that give a true andfair view of the financial position financial performance total comprehensive incomechanges in and cash flows of the Company in accordance with the and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditors' Responsibility 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 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 scepticism 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 a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations 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 Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 thatmaycastsignificantdoubt 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 audit report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our audit report.However future events or conditions may cause the Company to cease to continue as a goingconcern.
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 financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statementsmaybeinfluenced.We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financial statements
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the significantaudit findings including anysignificant and 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.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 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 Profitand Loss including Other Comprehensive
Income Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the relevant books of account.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified 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 March31st 2020 taken on record by the Board of Directors none of the directors isdisqualified as on March 31st 2020 from being appointed as a director in termsof
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 ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
(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 as amended inour opinion and to the best of our information and according to the explanations given tous.
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central
Government in terms of Section 143(11) of the Act we give in "Annexure A"astatement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE"A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to under Report on Other Legal and Regulatory Requirements' section ofour report to the Members of Hindustan Hardy Limited of even date)
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipments.
b) As explained to us all the assets have been physically verifiedby the management atthe end of the year. According to the information and explanations given to us nodiscrepancies have been noticed on such physical verification.
c) In respect of immovable property of land that has been taken on lease the leaseagreement is in the name of the company.
(ii) As per the information furnished the inventory has been physically verified bythe management during the year. In our opinion the frequency of such verification isreasonable. No material discrepancies were noticed on physical verification of inventory.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 (the Act ').
(iv) The Company has not given any loans has not made any investments nor has givenany guarantees or security - hence the compliance as per provisions of section 185 and 186are not applicable.
(v) The Company has not accepted any deposits from the public during the year underreview.
(vi) It is informed that the provisions of maintenance of Cost Records as prescribed bythe Central Government under section 148 (1) of the Companies Act 2013 are not applicableto the Company.
(vii) a) According to the information and explanations given to us and the books andrecords examined by us the company is generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax customsduty goods & services tax cess and other material statutory dues with theappropriate authorities. It is informed that there are no such dues as at 31stMarch 2020 outstanding for a period exceeding six months from the date they becamepayable.
b) According to information and explanations given to us there are no disputed amountsoutstanding in respect of income tax goods & services tax sales tax value addedtax excise duty service tax and customs duty as the last day of financial year.
(viii) The Company has not defaulted in repayment of loans or borrowings to banks. The
Company has not borrowed from financial institutions or government and has not issuedany debentures.
(ix) The Company did not raise any money by way offeror further publicinitialpublic debt instruments) during the year. The term loans taken were offer appliedfor the purpose for which they were taken.
(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 the Company has paid /provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable.
(xiii) In our opinion and according to the information and explanations given to usthe
Company is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with related parties and the details of related party transactions have beendisclosed in the financial statements etc. as required by the applicable accountingstandards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into non-cash transactions with directors or persons connectedwith them.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Hindustan Hardy 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 HINDUSTANHARDY LIMITED ("the Company") as of 31st March 2020 inconjunction with our audit of the 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 operate effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets prevention anddetection of frauds and errors the accuracy and completeness of accounting records andtimely preparation of reliable financial information as required under the Companies Act2013.
Our responsibility is to express an opinion on the company's internal financial controlover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by the ICAI and deemed tobe prescribed under Section 143(10) of the Companies Act 2013 to an audit of internalfinancial controls. Those Standards and 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 were established andmaintained and if such controls operate effectively in all material respects
Our audit involves performing procedures to obtain audit evidence about the adequacy ofinternal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial control 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 risk ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is basis for our opinion oncompany's internal financial control system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of statements for externalpurposes in accordance with generally accepted accounting principles.
A company's internal financial controls over financial reporting includes thosepolicies and procedures that
(1) pertain to maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorization of management and directors of the company; and
(3) provide reasonable assurance regarding the prevention and timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 of 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 the future periods are subject to the risk that the internal financialcontrols over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies and procedures may deteriorate.
In our opinion to the best of our information and according to the explanationsprovided to us the Company has in all material respects an adequate internal financialcontrol system over financial reporting and such internal financial controls over thefinancial reporting were operating effectively st March 2020 based on the internalfinancial reporting criteria established by the company considering the essentialcomponents of internal controls stated in the Guidance Note of Audit of Internal Controlsover Financial reporting issued by the ICAI.