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 ("the
Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of
Profit and Loss (including the statement of Other Comprehensive Income ), the Statement of
Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as the "standalone financial
statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies Act, 2013 ("the Act") in the manner so required and give a true
and fair view in conformity with the Indian Accounting Standards prescribed under sec
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 the state of affairs of the Company as at March 31, 2023, its loss (financial
performance including other comprehensive Income), its cash flows and the changes in
equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on
Auditing specified under section 143(10) of the Companies Act 2013 (SAs). Our
responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the Standalone Financial Statements section of our
report. We are independent of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India (ICAI) together with the independence
requirements that are relevant to our audit of the financial statements under the
provisions of the Companies Act 2013 and the Rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the ICAIs Code
of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Emphasis of Matter
We draw attention to notes 5, 7 and 37 of the financial statements, wherein the
Companys had invested a sum of Rs. 60.00 lakhs in HCL Agro Power Limited (‘HAPL)
and advanced an amount to Rs. 1,776.27 lakhs that is receivable. HAPL has ceased its
operations, resulting in a significant doubt regarding the recovery of the advanced amount
and in consequence, the management of the Company has made a total provision of Rs.
1,050.00 lakhs (which includes current year provision of 520.00 lakhs), considering the
potential recovery from monetising the assets of HAPL. 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 most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined that there were no key audit matters to be communicated in our audit
report.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Management Discussion and Analysis,
Boards Report including Annexures to Boards Report, Business Responsibility Report,
Corporate Governance and Shareholders Information, but does not include the standalone
financial statements and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained 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 misstatement
of this other information, we are required to report that fact. We have nothing to report
in this regard.
Managements Responsibility for Standalone Financial Statements
The Companys 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 of
these standalone financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive income / loss, changes in
equity and cash flows of the Company in accordance with accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) specified under
section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design, implementation and maintenance
of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the standalone financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so. The Board of Directors are responsible for overseeing
the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic 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 and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in
order to design 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 whether the Company has adequate internal financial controls system in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the standalone financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone
financial statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning the scope of our
audit work 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, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, 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 sub-section (11) of section 143 of
the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3
and 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 best
of 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 the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, Statement of Profit and Loss, (including the statement of Other
Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt
with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the
Indian Accounting Standards specified under section 133 of the Act.
(e) On the basis of written representations received from the directors as on March 31,
2023, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2023, 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 financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B" to this report;
(g) With respect to the other matters to be included in the Auditors Report in
accordance 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 explanations
given to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and 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 financial position to
the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company during the year 31st march 2023.
iv. a. The Management has represented that, to the best of its knowledge and belief
that no funds ( which are material either individually or in aggregate) have been advanced
or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person or entity, including foreign
entity ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
b. The Management has represented that, to the best of its knowledge and belief that no
funds ( which are material either individually or in aggregate) have been received by the
Company from any person or entity, including foreign entity ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the Company shall,
whether directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
c. Based on the audit procedures that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the 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 March
2023
|
For S B S B AND ASSOCIATES |
|
Chartered Accountants |
|
(Firm Regn. No. 012192S) |
|
D. Sharath Kumar |
|
Partner |
| Place: Chennai |
M.No: 024568 |
| Date: 29-05-2023 |
UDIN:23024568BGULDH5939 |
Annexure A to the Independent Auditors report of even date to the members of HEMADRI
CEMENTS LIMITED, on the financial statements for the year ended 31 March 2023
(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 fair
view of the financial statements of the Company and taking into consideration the
information and explanations given to us and the books of accounts and other records
examined by us, in the normal course of audit, and to the best of our knowledge, we report
that:
i. in respect of the Companys property, plant and equipment and intangible assets:
(a) • the Company has maintained proper records showing full particulars,
including quantitative details and situation of property, plant and equipment.
• the Company has maintained proper records showing full particulars of intangible
assets.
(b) the Company has a program of physical verification of property, plant and equipment
at regular intervals so to cover all the assets which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. According to the
information and explanations given to us, no material discrepancies were noticed on such
verification
(c) the title deeds of all the immovable properties (other than properties where the
Company 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 are
held in the name of the Company
(d) the Company has not revalued any of its property, plant and equipment and
intangible assets during the year
(e) no proceedings have been initiated during the year or are pending against the
Company as at 31 March 2023 for holding any benami property under the Benami Transactions
(Prohibitions) Act, 1988 (as amended in 2016) and rules made thereunder
ii. the Company has a program of physical verification of inventory at regular
intervals which, in our opinion, is reasonable having regard to the size of the Company
and the nature of its inventory. According to the information and explanations given to
us, no material discrepancies were noticed on such verification.
iii. the Company has availed working capital facilities in excess of INR 5 crores from
banks / financial institutions on the basis of security of current assets and the
quarterly returns / statements filed by the Company are in agreement with the books of
accounts. iii. The Company has not made investments or provided guarantee or security or
granted loans or advances, secured or unsecured, to Companies, Firms, Limited Liability
Partnerships 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, in
respect of loans granted, investments made and guarantees and securities provided, as
applicable
v. the Company has not accepted any deposits from the public and hence the directives
issued by RBI and the provisions of section 73 to 76 or any other relevant provisions of
the Act and the Companies (Acceptance of Deposit) Rules, 2015. Hence, reporting under
clause 3(vi) of the Order is not applicable.
vi. We have broadly reviewed the books of accounts and records maintained by the
company pursuant to the Rules made by the Central Government for the maintenance of Cost
Records under section 148(1) of the Companies Act, 2013 and we are of the opinion that
prima 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 provident
fund, employees state insurance, income-tax, goods and service tax, duty of customs, cess
and other material statutory dues applicable to it with the appropriate authorities though
there has been a slight delay in a few cases. There were no undisputed amounts payable
which were outstanding as on 31 March 2023 for a period of more than six months from the
date on which they became payable
(b) details of statutory dues referred to in sub-clause (a) above which have not been
deposited as on 31 March 2023, 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 have
been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961. ix.
(a) the Company has not defaulted during the year in repayment of dues to any lender
during the year.
(b) the Company has not been declared a willful defaulter by any bank of financial
institution or government or any government authority
(c) as per the information and explanations provided to us, the term loans were applied
for the purpose for which the loans were obtained
(d) on an overall examination of the financial statements of the Company, funds raised
on short term basis have, prima facie, not been used during the year for long-term
purposes by the Company
(e) on an overall examination of the financial statements of the Company, the Company
has not taken funds from any entity or person on account of or to meet the obligations of
its subsidiaries / joint ventures / associates.
(f) the Company has not raised loans during the year on the pledge of securities held
in its subsidiaries / joint ventures / associate companies and hence reporting under
clause 3(ix)(f) is not applicable.
x.
(a) the Company has not raised moneys by way of initial public offer or further public
offer (including debt instruments) during the year and hence reporting under clause
3(x)(a) is not applicable.
(b) the Company has not made any preferential allotment or private placement of shares
or convertible debentures (fully or partly or optionally) and hence reporting under clause
3(x)(b) of the Order is not applicable
xi.
(a) no fraud by the Company and no fraud on the Company has been noticed or reporting
during the year
(b) no reporting under sub-section (12) of section 143 of the Companies Act has been
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
(c) as informed by the Company, there were no whistle-blower complaints received during
the year.
xii. the Company is not a Nidhi Company and hence reporting under clause 3(xii) of the
Order is not applicable
xiii. In our opinion, the Company is in compliance with sections 177 and 188 of the
Act, where applicable, and the requisite details have been disclosed in the financial
statements etc., as required by the applicable accounting standards
xiv.
(a) in our opinion and based on our examination, the Company has an adequate internal
audit 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 year
and till date.
xv. the Company has not entered into any non-cash transactions its directors or persons
connected with its directors and hence provisions of section 192 of the Act are not
applicable to the Company. xvi. in our opinion, the Company is not required to registered
under section 45-IA of the Reserve Bank of India Act, 1934 and hence reporting under
clause 3(xvi) and its sub-clauses of the Order is not applicable
xvii. the Company has incurred cash losses of Rs.1331.59 Lakhs during the financial
year covered by our audit, however there is no cash loss incurred immediately preceding
financial year
xviii. there has been no resignation of the statutory auditors of the Company during
the year xix. on the basis of the financial ratios, ageing and expected dates of
realisation of financial assets and payment of financial liabilities, other information
accompanying the financial statements and our knowledge of the Board of Directors and
Management plans and based on our examination of the evidence supporting the assumptions,
nothing has come to our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report indicating that Company is not
capable of meeting its liabilities existing at the date of balance sheet as and when they
fall due within a period of one year from the balance sheet date. We, however, state that
this is not an assurance as to the future viability of the Company. We further state that
our reporting is based on the facts up to the date of the audit report and we neither give
any guarantee nor any assurance that all liabilities falling due within a period of one
year from the balance sheet 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 135 of
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 135
of the Act and hence reporting under clause 3(xx)(b) of the Order is not applicable
For S B S B AND ASSOCIATES
Chartered Accountants
(Firm Regn. No. 012192S)
D. Sharath Kumar
Partner
M.No: 024568
UDIN: 23024568BGULDH5939
Place: Chennai
Date: 29-05-2023
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of HEMADRI CEMENTS LIMITED of even
date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of HEMADRI
CEMENTS LIMITED ("the Company") as of March 31, 2023 in conjunction with our
audit of the standalone financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining
internal financial controls based on the internal control over financial reporting
criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the internal financial controls over
financial reporting of the Company based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants
of India and the Standards on Auditing prescribed under Section143(10) of the Companies
Act, 2013, to the extent applicable to an audit of internal financial controls.
Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained and if
such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the 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 given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2023, based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India.
For S B S B AND ASSOCIATES
Chartered Accountants
(Firm Regn. No. 012192S)
D. Sharath Kumar
Partner
M.No: 024568
UDIN: 23024568BGULDH5939
Place: Chennai
Date: 29-05-2023
+91-9892691696
