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Dharani Sugars & Chemicals Ltd.

BSE: 507442 Sector: Agri and agri inputs
NSE: DHARSUGAR ISIN Code: INE988C01014
BSE LIVE 15:40 | 25 Sep 25.40 -1.45
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NSE 15:31 | 25 Sep 24.95 -1.65
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OPEN 25.00
PREVIOUS CLOSE 26.85
VOLUME 3341
52-Week high 49.30
52-Week low 20.80
P/E
Mkt Cap.(Rs cr) 84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.00
CLOSE 26.85
VOLUME 3341
52-Week high 49.30
52-Week low 20.80
P/E
Mkt Cap.(Rs cr) 84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dharani Sugars & Chemicals Ltd. (DHARSUGAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF DHARANI SUGARS AND CHEMICALS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of DHARANI SUGARSAND CHEMICALS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2016 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Managements Responsibility for the 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 preparationand presentation of these standalone Financial Statements that give a true and fair viewof the financial position financial performance and cash ows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards speci ed under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding 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 design implementation and maintenance ofadequate internal financial controls; that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor’s Responsibility:

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing speci ed underSection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Financial Statements are free from material misstatement.

Limited

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Company’s Directors as well as evaluating the overallpresentation of the Financial Statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

a) in the case of the balance sheet of the state of affairs of the Company as at 31stMarch 2016;

b) in the case of the statement of profit and loss of the loss of the Company for theyear ended on that date; and

c) in the case of the cash ow statement of the cash ows for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure A a statement on the matters speci ed inparagraphs 3 and 4 of the Order.

2) As required by Section 143(3) of the Act we report that :

a) we have obtained all the information and explanations which to the best of ourknowledge and belief werefinecessary 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 appears from our examination of those books;

c) the balance sheet statement of profit and loss and cash ow statement dealt with bythis report are in agreement with the books of account; d) in our opinion the aforesaidstandalone financial statements comply with the Accounting Standards speci ed undersection 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 31stMarch 2016 and taken on record by the Board of Directors none of the Directors isdisquali ed as on 31st March 2016 from being appointed as a director in terms of Section164(2) of the Act; and

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"; and

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 explanations given to us: i. the Company hasdisclosed the impact of pending litigations on its financial position in its financialstatements Refer Note 25.2 to the financial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts Refer Note 25.4.18 to the financial statements;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

SRINIVASAN & SHANKAR
Chartered Accountants
(Firm Registration No.: 005093S)
per R MANIKANDAN
Place: Chennai Partner
Dated: 26th May 2016 Membership No.216063

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT

The Annexure referred to in our Independent Auditor’s Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2016 wereport that;

(i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical fiveri cation of fixed assets bywhich fixed assets are fiveri ed in a phased manner every year. In accordance with thisprogramme fixed assets were fiveri ed during the year and no material discrepancies werenoticed on such fiveri cation.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory has been physically fiveri ed during the year by themanagement. In our opinion the frequency of fiveri cation is reasonable. In our opinionthe discrepancies noticed on fiveri cation between the physical stocks and the bookrecords were not material.

(iii) The Company has not granted any loans secured or unsecured to anycompanies rms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013 ("the Act") during theyear under consideration.

(iv) In our opinion and according to the information provided and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct with respect to the loans and investments made.

(v) In our opinion and according to the information and explanations given tous directives issued by the Reserve Bank of India and the provisions of sections 73 to 76of the Act or any other relevant provisions of the Act 2013 and the rules framed thereunder to the extent applicable have been complied with. However the Company has notaccepted any deposits during the year. We are informed by the management that no order hasbeen passed by the Company Law Board National Company Law Tribunal or Reserve Bank ofIndia or any Court or any other Tribunal.

(vi) We have broadly reviewed the accounts and records maintained by the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Act and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees’State Insurance Income Tax Sales Tax Value Added Tax Service Tax Duty of CustomsExcise Duty Cess and other material statutory dues have been regularly deposited duringthe year by the Company with the appropriate authorities. According to the information andexplanations given to us there were no undisputed amounts payable in respect of ProvidentFund Employees’ State Insurance Income Tax Sales Tax Value Added Tax ServiceTax Duty of Customs Excise Duty Cess and other material statutory dues were in arrearsas at 31st March 2016 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us there are no materialdues of Sales Tax and Duty of Custom which have not been deposited with the appropriateauthorities on account of any dispute. However according to the information andexplanations given to us the following dues of Income Tax Excise Duty and Service Taxhave not been deposited by the Company on account of disputes:

Name of the Statute Nature of dues Period to which the amount relates Status Amount (Rs. in lakhs)
Income Tax Act 1961 Income Tax Assessment Year 2013-14 Commissioner of Income-tax (Appeals) -
Income Tax Act 1961 DuesIncome Tax Assessment Year 2012-13 Commissioner of Income-tax (Appeals) 11.08
Income Tax Act 1961 DuesIncome Tax Dues Assessment Year 2011-12 Commissioner of Income-tax (Appeals) -
Finance Act 1994 Service Tax on Goods Transport Agency April 2008 to April 2013 CESTAT - Chennai 39.94
Tamilnadu Tax on Consumption or Sale of Electricity Act 2003 Power Generation Tax June 2003 to Sep 2008 and April 2011 to March 2015 Supreme Court 312.80
Tamilnadu Tax on Consumption or Sale of Electricity Act 2003 Power Tariff revision August'12 to September 2013 Supreme Court # 67.42
Central Excise Act 1944 Cenvat credit on Capital goods Sep 2008 to Feb 2010 CESTAT - Chennai. # 41.71

# net of amount paid under protest.

(viii) According to information and explanation given to us and as per the books andrecords examined by us the Company has defaulted in repayment of dues to financialinstitution and government which are as follows:

Bank/ Financial Institution Nature of dues Rs. in lacs Due date Date of Payment
Sugar Development Fund Repayment of Loan 194.03 01-Mar-15 11-Mar-16
Sugar Development Fund Repayment of Loan 139.63 03-Oct-14
Sugar Development Fund Repayment of Loan 142.54 19-Jan-15
Sugar Development Fund Repayment of Loan 236.58 05-Dec-14
Sugar Development Fund Repayment of Loan 236.58 06-Jun-15
Sugar Development Fund Repayment of Loan 139.63 03-Apr-15
Sugar Development Fund Repayment of Loan 139.63 03-Oct-15
Sugar Development Fund Repayment of Loan 142.54 19-Jul-15
Sugar Development Fund Repayment of Loan 142.54 19-Jan-16
Sugar Development Fund Repayment of Loan 194.03 01-Mar-16
Sugar Development Fund Repayment of Interest 29.09 03-Oct-14
Sugar Development Fund Repayment of Interest 11.50 19-Jan-15
Sugar Development Fund Repayment of Interest 37.96 05-Dec-14
Sugar Development Fund Repayment of Interest 33.03 06-Jun-15
Sugar Development Fund Repayment of Interest 29.29 03-Apr-15
Sugar Development Fund Repayment of Interest 32.64 03-Oct-15
Sugar Development Fund Repayment of Interest 8.49 19-Jul-15
Sugar Development Fund Repayment of Interest 5.75 19-Jan-16
Sugar Development Fund Repayment of Interest 69.96 01-Mar-16
Sugar Development Fund Repayment of Interest 28.60 29-Feb-16
Sugar Development Fund Repayment of Interest 77.65 01-Mar-15 11-Mar-16
India Renewable Energy
Development Agency Repayment of Interest 68.17 31-Mar-16
India Renewable Energy
Development Agency Repayment of Interest 69.32 31-Mar-15 21-Jul-15
India Renewable Energy
Development Agency Repayment of Interest 71.15 30-Jun-15 22-Sep-15
India Renewable Energy
Development Agency Repayment of Interest 69.11 30-Sep-15 29-Dec-15
India Renewable Energy
Development Agency Repayment of Interest 73.97 31-Dec-15 12-Feb-16

The Company has not issued Debentures till 31 March 2016. Hence the question ofreporting on default in repayment of dues to Debenture holders does not arise.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. To the best of our knowledgeand belief and according to the information and explanations given to us term loansavailed by the Company were prima facie applied during the period for the purposes forwhich the loans were obtained.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards;

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

SRINIVASAN & SHANKAR
Chartered Accountants
(Firm Registration No.: 005093S)
per R MANIKANDAN
Place: Chennai Partner
Dated: 26th May 2016 Membership No.216063

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 M/s DHARANISUGARS & CHEMICALS LIMITED ("the Company" or "DSCL") as of March31 2016 in conjunction with our audit of the standalone financial statements of theCompany for 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 internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India (ICAI). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and ef cient conduct of its businessincluding 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.

Auditors’ 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 suf cient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly re ect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 March 31 2016 based oninternal 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 the Institute of CharteredAccountants of India.

SRINIVASAN & SHANKAR
Chartered Accountants
(Firm Registration No.: 005093S)
per R MANIKANDAN
Place: Chennai Partner
Dated: 26th May 2016 Membership No.216063