To the members of K.C.P.SUGAR AND INDUSTRIES CORPORATION LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of K.C.P.SUGAR ANDINDUSTRIES CORPORATION LIMITED ("the Company") which comprises the BalanceSheet as at 31st March 2017 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys 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 flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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 the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements.
The procedures selected depend on the auditors judgment including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompanys Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
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 manners or required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors 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 specifiedin Para 3 and 4 of the said Order.
2. As required by Section143 (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 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 Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Reportare in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule7 of theCompanies (Accounts) Rules 2014. (e) On the basis of the written representations receivedfrom the directors as on 31st March 2017 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March 2017 from being appointed as a directorin terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and (g) With respect to the other matters to beincluded in the Auditors Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer note 28 to the financial statements. ii.the Company did not have any long-term contracts including derivative contracts for whichthere is no provision required for material foreseeable losses. iii. there has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company.
iv. the Company has provided requisite disclosure in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 and these are in accordance with the booksof accounts maintained by the company. Refer Note 42 to the standalone financialstatements.
|Place : Chennai |
|Date : 29.05.2017 |
Annexure - A to the Auditors Report
The Annexure referred to in Independent Auditors Report to the members of K.C.P.SUGAR AND INDUSTRIES CORPORATION LIMITED on the standalone financial statements forthe year ended 31st March 2017 we report that: (i) (a) the Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets
(b) the Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets
(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 except in respect of certain immovable properties (landand buildings) which have been transferred to the Company as per a scheme of demerger arein the name of the erstwhile demerged company.
(ii) The Management has conducted physical verification of Inventory at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material.
(iii) The Company has granted a loan to the wholly owned subsidiary covered in theregister maintained under section 189 of the Companies Act 2013 (the Act). a)In our opinion the terms and conditions on which the loan had been granted to the whollyowned subsidiary listed in the register maintained under Section 189 of the Companies Act2013 was not prima facie prejudicial to the interest of the Company b) In the case ofthe loan granted to the wholly owned subsidiary the borrower has repaid the loan asstipulated
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In respect of deposits accepted in our opinion and according to the informationand explanations given to us directives issued by the Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules framed there under to the extent applicable have been complied with. Weare informed by the management that no order has been passed by the Company Law BoardNational Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.
(vi) We have broadly reviewed the books of accounts and records maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of CostRecords under section 148(1) of the Companies Act 2013 and we are of the opinion thatprima facie the prescribed accounts and records have been made and maintained.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the books and records of the Company amounts deducted/ accrued in thebooks of account in respect of undisputed statutory dues including provident fundincome-tax sales tax wealth tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues have been regularly deposited during theyear by the Company with appropriate authorities except in case of Purchase tax - referNote No.44 to the financial statements. As explained to us the Company didnt haveany dues on account of Employees State Insurance.
b) According to the information and explanations given to us no undisputed amountpayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31stMarch 2017 for a period of more than six months from the date they became payable.
c) According to the information and explanations given to us and the records of theCompany examined by us there are no material dues of Income tax sales tax wealth taxservice tax duty of customs duty of excise value added tax and cess which have not beendeposited on account of any dispute except the following amounts:
|Name of the Statute ||Nature of the Dues ||Amount (in Rs.) ||Period to which the amount relates ||Forum where dispute is pending |
|Andhra Pradesh || || || || |
|Value Added Tax Act 2005 ||Value Added Tax ||1366538 ||April 2009 to October 2013 ||Sales Tax Appellate Tribunal Vizag |
|Central Excise Act1944 ||Central Excise (Sugar Cess) ||308144 ||January 2011 to September 2016 ||Commissioner of Central Excise & Service Tax Guntur |
|Income Tax Act1961 ||Income Tax & Interest ||59701340 ||Financial Year 2013-14 ||Commissioner of Income Tax (Appeals) Chennai. |
(viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of dues to afinancial institution bank or debenture holders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(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 give 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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give 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 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.
Place : Chennai
Date : 29.05.2017
Annexure - B to the Auditors Report
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 K.C.P.SUGARAND INDUSTRIES CORPORATION LIMITED ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 onAuditing issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 auditors 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 sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys 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 companys internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly refl ect the transactions and dispositions of the 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 authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the companys assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
Place : Chennai
Date : 29.05.2017