You are here » Home » Companies » Company Overview » Sakthi Sugars Ltd

Sakthi Sugars Ltd.

BSE: 507315 Sector: Agri and agri inputs
NSE: SAKHTISUG ISIN Code: INE623A01011
BSE LIVE 09:15 | 17 Oct 25.30 -0.30
(-1.17%)
OPEN

25.50

HIGH

25.50

LOW

25.30

NSE 15:46 | 16 Oct 25.60 -0.35
(-1.35%)
OPEN

26.15

HIGH

26.25

LOW

25.40

OPEN 25.50
PREVIOUS CLOSE 25.60
VOLUME 785
52-Week high 44.40
52-Week low 23.00
P/E
Mkt Cap.(Rs cr) 301
Buy Price 25.40
Buy Qty 258.00
Sell Price 25.65
Sell Qty 267.00
OPEN 25.50
CLOSE 25.60
VOLUME 785
52-Week high 44.40
52-Week low 23.00
P/E
Mkt Cap.(Rs cr) 301
Buy Price 25.40
Buy Qty 258.00
Sell Price 25.65
Sell Qty 267.00

Sakthi Sugars Ltd. (SAKHTISUG) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To The Members of Sakthi Sugars Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Sakthi SugarsLimited ('the Company') which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

3. 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.

Auditor's Responsibility

4. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

5. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

6. We conducted our audit in accordance with the Standards on Auditing specified 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.

7. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstance. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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

Basis for Qualified Opinion

9. The Company has not provided for the interest and guarantee commission claim ofRs.6579.01 lakhs (Rs. 5444.38 lakhs) made by the Holding Company. In our opinion thelosses of the Company are under stated to that extent. This matter was also qualified inour report on the financial statements for the year ended March 31 2015.

10. As per the agreement entered no interest has been provided on the advance given tothe Associate Company. Non provision of interest at least to the extent of Interest onGovernment Securities is in contravention of sub-section (7) of Section 186 of the Act.Consequential impact of the same on the loss for the year/accumulated loss is notascertainable.

Qualified Opinion

11. In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matters 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 of the state ofaffairs of the Company as at March 31 2016 and its loss and its cash flows for the yearended on that date.

Emphasis of Matter

12. We draw attention to Note No. 37 (B) (a) to the standalone financial statementswhich specifies the claims disputed/challenged by the company. Our opinion is not modifiedin respect of this matter.

Report on Other Legal and Regulatory Requirements

13. As required by the Companies (Auditor's Report) Order 2016 (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 thematters specified in paragraphs 3 and 4 of the Order.

14. 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 purposes of our audit.

(b) Except for the effect of the matters described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.

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

(d) Except for the effect of the matters described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid standalone financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) The matters described in the Basis for Qualified Opinion paragraph above in ouropinion may not have an adverse effect on the functioning of the company.

(f) On the basis of written representations received from the directors as on March 312016 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct.

(g) The qualifications relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) 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

(i) 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 according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations as at March 31 2016on its financial position in its standalone financial statements - Refer Note no. 37 (A)and (B) to the 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.

For P.N. RAGHAVENDRA RAO & Co.
Chartered Accountants
Firm Registration Number : 003328S
P.R.VITTEL
Coimbatore Partner
May 30 2016 Membership Number : 018111

Annexure - A to the Independent Auditor's Report SAKTHI SUGARS LIMITED (the"Company")

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

(b) These fixed assets have been physically verified by the management at reasonableintervals. No material discrepancies were noticed on such physical verification.

(c) The title deeds of immovable properties as disclosed on Note No.9 on tangibleassets to the standalone financial statements are held in the name of the Company exceptfor land of Soya division acquired pursuant to scheme of amalgamation having a carryingvalue of Rs.418.00 lakhs as at March 31 2016.

ii. As explained to us inventories have been physically verified by the management atregular intervals during the year. In our opinion the frequency of verification isreasonable. No material discrepancies were noticed on such physical verification.

iii. The Company has granted unsecured loan in earlier years to the Associate Companycovered in the register maintained under Section 189 of the Act and outstanding balance ofwhich as at the date of balance sheet is Rs.15432.40 lakhs.

(a) As per the terms and conditions of the loan granted to the associate company nointerest is chargeable. Non-charging of interest is prejudicial to the interest of thecompany.

(b) In respect of the aforesaid loan the schedule of repayment is stipulated and asper which no amount of principal has fallen due during the year.

(c) In respect of the aforesaid loan as per the terms and conditions there is noamount which is overdue for more than ninety days.

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 in respect ofthe investments made and guarantee given. With respect to a loan given to the associateno interest has been charged in contravention of stipulations of sub-section (7) ofSection 186 of the Act and with the exception of the above Company has complied with theprovisions of Section 185 and 186 of the Act. As per management representation interesthas not been charged as per the terms of agreement and considering the economic interestof the company in the entity. The Company has not provided any security to others.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the rules framed there under.

vi. We have broadly reviewed the cost records maintained by the specified undersub-section (1) of Section 148 of the Act and are of the opinion that the prescribedaccounts 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 records of the Company undisputed statutory dues includingprovident fund employee state insurance income-tax sales tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues havegenerally been regularly deposited during the year by the Company with the appropriateauthorities though there has been a slight delay in a few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employee state insurance income-tax sales taxservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues were in arrears as at March 31 2016 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax duty of customs and value addedtax which have not been deposited on account of any dispute. The particulars of dues ofsales tax duty of excise and service tax as at March 31 2016 which have not beendeposited on account of dispute are as follows:

Name of the Statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where the dispute is pending
Tamilnadu Sales Tax 1056.09 1983-84 to 1995-96 1989-90 to 1992-93 Madras High Court Chennai.
General Sales Tax Act 1959 28.25 2000-01 Additional Commissioner (CT)/(RP) Chennai.
The Central Excise Duty 5.49 2002-03 2006-07 Madras High Court Chennai.
Excise Act 1944 804.59 2006-07 2008-2012 CESTAT Chennai.
8.79 2007-08 & 2008-09 Commissioner of Central Excise
(Appeals) Salem
0.34 June & July 2009 Commissioner of Central Excise
(Appeals) Bhubaneshwar
The Bihar & Orissa Excise Duty 12.63 2002 - 03 High Court of Orissa Cuttack.
Excise Act 1915
Finance Act 1994 Service Tax 289.77 2005 2006 2007 & 2008 CESTAT Chennai.
2009 - 2011
21.12 2006 2009-13 2014-15 Commissioner of Central Excise (Appeals).

viii.According to the records of the Company examined by us and the information andexplanations given by the management the Company has not issued debentures. The defaultsby the Company as at the balance sheet date in repayment of loans to banks financialinstitutions and Government are as under:

(a) Default in repayment of loans to Banks:

Particulars Amount of default as at 31.03.2016 (Rs.in lakhs) Period of Default
Principal Interest Principal Interest
Rupee Term Loan from Bank of India 598.93 273.11 January 2015 to January 2016 January 2015 to February 2016
Term Loan from Bank of India 597.60 274.86 January 2015 to January 2016 January 2015 to February 2016
Corporate Loan from Bank of India 312.47 106.65 January 2015 to January 2016 January 2015 to February 2016
Term Loan from Allahabad Bank 816.13 582.69 April 2013 to January 2016 April 2013 to February 2016
Rupee Term Loan from Punjab National Bank 1759.87 1076.69 October 2012 to January 2016 January 2013 to February 2016
Working Capital Term Loan from Bank of India 206.20 101.85 January 2015 to January 2016 January 2015 to February 2016
Funded Interest Term Loan from Bank of India 105.56 76.06 January 2015 to January 2016 January 2015 to February 2016
Funded Interest Term Loan from Allahabad Bank 77.59 59.58 April 2013 to January 2016 April 2013 to February 2016
Funded Interest Term Loan from Punjab National Bank 179.25 118.72 October 2012 to January 2016 January 2013 to February 2016
FCCB Term Loan from Bank of India -- 416.20 -- January 2015 to February 2016

(b) Default in repayment of loans to Financial Institutions:

Particulars Amount of default as at 31.03.2016 (Rs.in lakhs) Period of Default
Principal Interest # Principal Interest #
Asset Reconstruction Company (India) Limited (HDFC Bank Limited) -- 1578.34 -- July 2012 to December 2015
Asset Reconstruction Company (India) Limited - (Canara Bank) -- 2963.00 -- April 2012 to December 2015
Asset Reconstruction Company (India) Limited (State Bank of India) -- 2399.91 -- October 2013 to December 2015
Asset Reconstruction Company (India) Limited -- 2459.02 -- July 2012 to December 2015
Asset Reconstruction Company (India) Limited -- 1250.02 -- July 2014 to December 2015

# As per the restructuring proposal of Asset Reconstruction Company (India) Limitedthe overdue interest amounting to Rs. 9280.47 lakhs will be waived on fulfillment ofstipulated conditions.

(c) Default in repayment of loan to Government:

Particulars Amount of default as at 31.03.2016 (Rs.in lakhs) Period of Default
Principal Interest Principal Interest
Sugar Development Fund Loan 2569.66 1420.00 May 2013 to February 2016 November 2011 to February 2016

ix. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments). Term loan availed during the year has beenapplied for the purpose for which it was raised.

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. The Company has paid managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 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 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 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. Accordingly paragraph 3(xvi) of the Order is not applicable.

For P.N. RAGHAVENDRA RAO & Co.
Chartered Accountants
Firm Registration Number : 003328S
P.R.VITTEL
Coimbatore Partner
May 30 2016 Membership Number : 018111

Annexure - B to the Independent Auditor's Report

Referred to in paragraph 13(h) of the Independent Auditors' Report of even date to themembers of Sakthi Sugars Limited on the standalone financial statements for the year endedMarch 31 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act')

1. We have audited the internal financial controls over financial reporting of SakthiSugars Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

2. 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 were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including 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 Act.

Auditor's Responsibility

3. 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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. 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 the maintenance of records that in reasonable detail accurately andfairly reflect 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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

7. 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

8. 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 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.

For P.N. RAGHAVENDRA RAO & Co.
Chartered Accountants
Firm Registration Number : 003328S
P.R.VITTEL
Coimbatore Partner
May 30 2016 Membership Number : 018111