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Empee Sugars & Chemicals Ltd.

BSE: 500132 Sector: Agri and agri inputs
NSE: EMPEESUG ISIN Code: INE928B01012
BSE LIVE 15:09 | 22 Sep 4.90 -0.25
(-4.85%)
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NSE 00:00 | 05 Aug Stock Is Not Traded.
OPEN 4.90
PREVIOUS CLOSE 5.15
VOLUME 13364
52-Week high 8.94
52-Week low 4.77
P/E
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.90
Sell Qty 223.00
OPEN 4.90
CLOSE 5.15
VOLUME 13364
52-Week high 8.94
52-Week low 4.77
P/E
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.90
Sell Qty 223.00

Empee Sugars & Chemicals Ltd. (EMPEESUG) - Auditors Report

Company auditors report

To

The Members of

EMPEE SUGARS & CHEMICALS LIMITED

Report on Financial Statements

We have audited the accompanying financial statements of EMPEE SUGARS &CHEMICALS LIMITED (the Company) which comprises the Balance Sheet for the Year endedas at 31st March 2016 the Statement of Profit and Loss the Cash FlowStatement and a summary of significant accounting policies and other explanatoryinformationfor the year then ended.

Management’s Responsibility for the Financial Statements

The Company s Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with reference to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancialperformance and cash flows of the Company in accordance withthe accountingprinciples generally accepted in India includingthe Accounting Standards specified underSection 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Actfor safeguarding the assets of the Company and for preventinganddetecting frauds and other irregularities; selection andapplication of appropriateaccounting policies; making judgmentsand estimates that are reasonable and prudent; anddesignimplementation and maintenance of adequate internal financialcontrols that wereoperating effectively for ensuring the accuracyand completeness of the accounting recordsrelevant to thepreparation and presentation of the financial statements that give atrueand fair view and are free from material misstatement whetherdue to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalonefinancial statementsbased on our audit. We have taken into account the provisions of the Act theaccountingand auditing standards and matters which arerequired to be included in the audit reportunder the provisionsof the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standardson Auditing specified under Section 143(10) of the Act.ThoseStandards require that we comply with ethical requirementsand plan and perform theaudit to obtain reasonable assuranceabout whether the financial statements are free frommaterialmisstatements.

An audit involves performing procedures to obtain audit evidenceabout the amounts anddisclosures in the financial statements.The procedures selected depend on the auditor sjudgmentincluding the assessment of the risks of material misstatement ofthe financialstatements whether due to fraud or error. In makingthose risk assessments the auditorconsiders internal financialcontrol relevant to the Company s preparation of thefinancialstatements that give a true and fair view in order to design auditprocedures thatare appropriate in the circumstances but not forthe purpose of expressing an opinion onwhether the Companyhas in place an adequate internal financial controls systemoverfinancial reporting and the operating effectiveness of suchcontrols. An audit alsoincludes evaluating the appropriatenessof accounting policies used and the reasonablenessof theaccounting estimates made by the Company s directors as wellas evaluating theoverall presentation of the financial statements.

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

Basis for Qualified Opinion

a) The accumulated losses of the company have exceeded the net worth of the company.Hence the company has made a reference to BIFR under the sick industrial companies Act andthe Company has been registered under BIFR vide case no:69/2014. However the accountshave been prepared on a going concern basis.

b) The company has received amount of Rs. 140.37 crores from 7th July 2008to 30th September 2012 (refer note no 4) towards share application money fromholding company Empee Distilleries Ltd. These shares could not be allotted to theapplicant company in view of the non-receipt of approval from the SEBI and stock Exchange.By virtue of the Rules of the Companies Acceptance and Deposit Rules these are publicdeposits to be repaid. However the Company has obtained a legal opinion that in view ofthe fact that the Company is under BIFR the issue will have to be decided by BIFR.

c) Confirmation of Sundry debtors Trade payables Advance to suppliers Cane advancesHarvest Advance Other Payables and other deposit is subject to confirmation andreconciliation.(refer note no 8 16 & 18).

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India

a) in the case of the Balance Sheet of the state of affairs of the Company for theyear ended as at 31st March 2016;

b) in the case of the Profit and Loss Account of the Loss for the year ended on thatdate; and

c) In the case of the Cash Flow Statement of the cash flows for the year ended on thedate.

Report on Other Legal and Regulatory Requirements:-

1. As required by the Companies (Auditor s Report) Order 2016 (theOrder) issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act wegive in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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) Except for the Effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matters described in the Basis of Qualified Opinionparagraph in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on 31stMarch2016 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2016 from being appointed as a director in terms of Section164(2) of the Act.

f) 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 does not have any pending litigations which would impact its financialposition except the reference to the BIFR and the proceedings under the SARFAESI Actinitiated by the bankers and some of the project creditors have gone to the court for thewinding up of the company and other cases as given here under

S. No Case No Court Details of the case Status
1 OP No.2580 by way of Appeal against Arbitration award by three member arbitral Tribunal Before High Court of Madras M/s ISGEC raised disputes against M/s ESCL regarding settlement of dues in the supply and erection of boilers/turbines for our Ambasamudram and Naidupet projects about Rs 13 crores with future interest @24% p.a. awarded by the Tribunal. Pending for hearing
2 Petition under Sec482 of CrPC Before High court at New Delhi Against return of Compaint under Sec.138 of NI Act filed by M/s.IFCI Factors Ltd for claim of dishonor of cheque for Rs.3442100/- against ESCL and its Directors. Pending For compromise
3 Writ Petition no 244944 of 2011 Before High Court of Madras Against payment due of Rs 100000000/- from TNEB for ESCL Ambai unit (Electricity purchase charges issue) Pending for final disposal
4 WP No. 211147of 2014 High court of Madras Against demand of E-Tax for Rs45621938/-against ESCL Ambasamudram unit Notice ordered
5 O.S.18/2007 Before Principal District Court at Pondicherry Claim of loss and interest of Rs. 4000288/- towards sale of Molasses by Pondichery Co-OpSugar Mills Ltd against ESCL Written statement filed
6 S.A No.121 of 2016 Before DRT at Madurai Against notice issued by consortium of banks under Sec13(4) of SARFASI ACT for possession of hypothecated property and machineries at Ambasamudram unit against loas availed by ESCL. Pending

i. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

ii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;

For Venkatesh& Co.
Chartered Accountants
F.R.No.004636S
CA Dasaraty V
Place: Chennai M.No.026336
Date: 30.05.2016 Partner

Annexure to Independent Auditors’ Report

(Referred to in paragraph 1 under the heading of Report on other Legal and RegulatoryRequirements of our Report of even date)

As required by the Companies (Auditor s Report) Order 2016 issued by the CentralGovernment in terms of section 143 (11) of the Companies Act 2013 and on the basis ofsuch checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us during the course of the auditwe report that

1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the company and the nature of its assets. No material discrepancieswere noticed on such physical verification.

c) As per the information provided to us the title deeds of immovable properties areheld in the name of the Company.

2. In our opinion and according to the information and explanations given to us thephysical verification of inventory has been conducted at reasonable intervals and nomaterial discrepancies were noticed on such physical verification.

3. The company has given interest free loans to one of its subsidiary and the GroupCompanyfor Rs. 48.10 crores and Rs. 5.25 crores without stipulation as to the repayment ofprincipal.

4. a) In the light of above we do not comment on the whether the terms and conditionsof the loan are prejudicial to the interests of the Company.

b) In the light of above we do not comment on the schedule of repayment of principaland payment of interest.

5 According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the provisions of section 73 to section76 the Companies Act 2013 and rules framed there under are not applicable.

6. We have broadly reviewed the cost records maintained by the company pursuant to theCompanies (Cost Accounting Records) Rules 2011 prescribed by the Central Government underSection 148 of the Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

7. a) The company is regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Sales TaxService Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and other statutory dues to the appropriateauthorities except for the statutory dues tabulated hereunder. The details of the same ason the last day of the financial year concerned for a period of more than six months fromthe date they became payable are as follows:

Name of the State Act Nature of Dues Amount involved Period to which the case relates Status
Rs. in Lakhs
A.P. Sugar Cane regulation of Sugar Cane Act Andhra Pradesh Purchase tax payable 522.66 1994 2001 Paid Rs.123.49 lakhs towards said dues
Finance Act 1994 Service Tax payable 1.74 2015-2016
Finance Act 1994 Service Tax payable 56.02 2014-2015
Finance Act 1994 Service Tax Reverse Charge GTA 25.85 2014-2015
Income Tax Act 1961 Tax Deducted at Source 13.70 2015-2016

 

Name of the State Act Nature of Dues Amount involved Rs. in Lakhs Period to which the case relates Status
Central Excise Act 1944 Excise Duty Higher and Secondary Education Cess 0.97 2014-2015

a) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of Income Tax Sales Tax Service Tax Duties ofCustoms Duties of Excise Value Added Tax which have not been deposited on account of anydispute except the following.

Name of the State Act Nature of Dues Amount involved Period to which the case relates Dispute is pending before
Rs. in Lakhs
A.P. Sugar Cane regulation of Sugar Cane Act Andhra Pradesh Purchase tax payable 729.59 1994 2001 Asst Cane Commissioner
AP Value Added Tax Act 2005 Value Added Tax 119.37 2012 High Court of AP
Customs Act 1962 Duty of Customs 1462.51 2014 Customs and Excise Tribunal SZ Bench at Chennai
Customs Act 1962 Duty of Customs 289.24 2014 Customs Excise & Service Tax Appellate Tribunal Chennai

8. The Company has made an application to BIFR and the approval for a scheme ofrepayment is pending.

9. According to the records of the company and according to the information andexplanations given to us the company has not raised moneys by way of initial public offeror further public offer and has not obtained any term loans during the financial year.Hence comments under the clause are not called for.

10. According to information and explanations furnished to us no fraud by or on thecompany by its officers or employees has been noticed or reported during the year.

11. Managerial remuneration has not been paid or provided since the company has made areference to BIFR under the sick industrial companies Act and has been registered underBIFR vide case no:69/2014.

12. As the Company is not a Nidhi Company we do not comment on Net Owned Funds toDeposit ratio and unencumbered term deposits as specified in Nidhi Rules 2014.

13. All transactions with the related parties are in compliance with Sections 177 and188 of Companies Act 2013 where applicable and details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards.

14. The Company has not made any Preferential Allotment or Private placement of sharesor fully or partly convertible debentures during the year. Hence we do not comment onCompliance of section 42 of Companies Act 2013.

15. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him.

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

For Venkatesh& Co.
Chartered Accountants
F.R.No.004636S
CA Dasaraty V
Place: Chennai M.No.026336
Date: 30.05.2016 Partner

 

Name of the State Act Nature of Dues Amount involved Period to which the case relates Dispute is pending before
Rs. in Lakhs
A.P. Sugar Cane regulation of Sugar Cane Act Andhra Pradesh Purchase tax payable 729.59 1994 2001 Asst Cane Commissioner
AP Value Added Tax Act 2005 Value Added Tax 119.37 2012 High Court of AP
Customs Act 1962 Duty of Customs 1462.51 2014 Customs and Excise Tribunal SZ Bench at Chennai
Customs Act 1962 Duty of Customs 289.24 2014 Customs Excise & Service Tax Appellate Tribunal Chennai

8. The Company has made an application to BIFR and the approval for a scheme ofrepayment is pending.

9. According to the records of the company and according to the information andexplanations given to us the company has not raised moneys by way of initial public offeror further public offer and has not obtained any term loans during the financial year.Hence comments under the clause are not called for.

10. According to information and explanations furnished to us no fraud by or on thecompany by its officers or employees has been noticed or reported during the year.

11. Managerial remuneration has not been paid or provided since the company has made areference to BIFR under the sick industrial companies Act and has been registered underBIFR vide case no:69/2014.

12. As the Company is not a Nidhi Company we do not comment on Net Owned Funds toDeposit ratio and unencumbered term deposits as specified in Nidhi Rules 2014.

13. All transactions with the related parties are in compliance with Sections 177 and188 of Companies Act 2013 where applicable and details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards.

14. The Company has not made any Preferential Allotment or Private placement of sharesor fully or partly convertible debentures during the year. Hence we do not comment onCompliance of section 42 of Companies Act 2013.

15. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him.

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

For Venkatesh& Co.
Chartered Accountants
F.R.No.004636S
CA Dasaraty V
Place: Chennai M.No.026336
Date: 30.05.2016 Partner