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 15:40 | 23 Feb 21.00 0.20
(0.96%)
OPEN

21.05

HIGH

21.45

LOW

20.80

NSE 15:29 | 23 Feb 20.90 0.05
(0.24%)
OPEN

21.10

HIGH

21.15

LOW

20.85

OPEN 21.05
PREVIOUS CLOSE 20.80
VOLUME 148375
52-Week high 38.10
52-Week low 20.55
P/E
Mkt Cap.(Rs cr) 250
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 21.05
CLOSE 20.80
VOLUME 148375
52-Week high 38.10
52-Week low 20.55
P/E
Mkt Cap.(Rs cr) 250
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sakthi Sugars Ltd. (SAKHTISUG) - Auditors Report

Company 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 312017 theStatement of Profit and Lossthe Cash Flow Statement for the year then ended and a summaryof 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) Rules2014

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 ofRs767627 lakhs (Rs 657901 lakhs) made by a Company (erstwhile holding company) In ouropinion the Profit of the Company is overstated to that extent This matter was alsoqualified in our report on the financial statements for the year ended March 31 2016

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 ActConsequential impact of the same on the profit for the year/accumulated loss is notascertainable This matter was also qualified in our report on the financial statementsfor the year ended March 31 2016

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 2017 and its profit and its cash flows for theyear ended on that date

Report on Other Legal and Regulatory Requirements

12 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

13 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 March312017 taken on record by the Board of Directorsnone of the directors is disqualifiedas on March 312017 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 2017on 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

(iv) The Company has provided requisite disclosures in the standalone financialstatements as to holding as well as dealings in Specified Bank Notes during the periodfrom November 08 2016 to December 30 2016 on the basis of information available withthe Company Based on audit procedures and relying on the management representation wereport that disclosures are in accordance with the books of accounts maintained by theCompany and as produced to us by the Management - Refer Note 38

For PN RAGHAVENDRA RAO & Co

Chartered Accountants

Firm Registration Number: 003328S

PR VITTEL

Partner

Membership Number: 018111

Coimbatore

May 27 2017

Annexure - A to the Independent Auditors' Report Re : 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 No9 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 Rs41800 lakhs as at March 31 2017 ii As explained to us inventories havebeen physically verified by the management at regular intervals during the year In ouropinion the frequency of verification is reasonable No material discrepancies werenoticed 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 Rs760345 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 thereunder

vi We have broadly reviewed the cost records maintained by the company as specifiedunder sub-section (1) of Section 148 of the Act and are of the opinion that theprescribed 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 records of the

Company the company is generally regular in depositing undisputed statutory dues withappropriate authorities except undisputed statutory dues relating to provident fundincome-tax sales tax service tax duty of excise and value added tax that have notgenerally been regularly deposited during the year by the Company with the appropriateauthorities though the delays in deposit have not been serious According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employee state insurance income-tax sales tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues were inarrears as at March 312017 for a period of more than six months from the date they becamepayable

(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 2017 which have not beendeposited on account of dispute are as follows:

Name of the Statute Nature of dues Amount (Rsin lakhs) Period to which the amount relates Forum where the dispute is pending
Tamilnadu General Sales Tax Act Sales Tax 105609 1983-84 to 1995-96 1989-90 to 1992-93 1989-90 to 1994-95 Madras High Court Chennai
1959 2825 2000-01 Additional Commissioner (CT)/(RP) Chennai
The Central Excise Excise Duty 549 2002-03 Madras High Court Chennai
Act 1944 88762 2006-07 2008-2015 CESTAT Chennai
3633 2011-2016 Commissioner of Central Excise (Appeals) Salem
The Bihar & Orissa Excise Act 1915 Excise Duty 1263 2002-03 High Court of Orissa Cuttack
Finance Act 1994 Service Tax 27269 2005 2006 2007 & 2008 2009-2013 CESTAT Chennai
147 2014-15 Commissioner of Central Excise (Appeals) Salem

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 31032017 (Rsin lakhs)

period of Default

principal Interest principal Interest
Rupee Term Loan from Bank of India 7988 23521 June 2016 to December 2016 April 2016 to February 2017
Term Loan from Bank of India 7990 23525 June 2016 to December 2016 April 2016 to February 2017
Corporate Loan from Bank of India 4033 11876 June 2016 to December 2016 April 2016 to February 2017
Term Loan from Allahabad Bank 107117 84509 April 2013 to January 2017 April 2013 to February 2017
Rupee Term Loan from Punjab National Bank 223904 154699 October 2012 to January 2017 January 2013 to February 2017
Working Capital Term Loan from Bank of India 2839 8358 June 2016 to December 2016 April 2016 to February 2017
Working Capital Term Loan from Bank of India 5955 17587 June 2016 to December 2016 April 2016 to February 2017
Funded Interest Term Loan from Bank of India 1884 5545 June 2016 to December 2016 April 2016 to February 2017
Funded Interest Term Loan from Bank of India 6293 18514 June 2016 to December 2016 April 2016 to February 2017
Funded Interest Term Loan from Allahabad Bank - 8721 - April 2013 to February 2017
Funded Interest Term Loan from Pubjab National Bank - 17257 - January 2013 to February 2017
FCCB Term Loan from Axis Bank Limited - 5209 - January 2017 to February 2017
FCCB Term Loan from Bank of India 11250 33124 June 2016 to December 2016 April 2016 to February 2017
Particulars

Amount of default as at 31032017 (Rsin lakhs)

period of Default

principal Interest principal Interest
Soft Loan from Axis Bank Ltd - 5178 - January 2017 to February 2017
SEFASU Loan from Bank of India 57658 - October 2016 to February 2017 -
SEFASU Loan from Indian Overseas Bank 76283 - May 2016 to February 2017 -

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

particulars

Amount of default as at 31032017 (Rsin lakhs)

period of default

principal Interest principal Interest
Asset Reconstruction Company (India) Limited [HDFC Bank Limited] 2620 27608 May 2016 to February 2017 May 2016 to February 2017
Asset Reconstruction Company (India) Limited [Canara Bank] 13135 54672 May 2016 to February 2017 May 2016 to February 2017
Asset Reconstruction Company (India) Limited [State Bank of India] 10701 45015 May 2016 to February 2017 May 2016 to February 2017
Asset Reconstruction Company (India) Limited [IDBI Bank] 3927 42564 May 2016 to February 2017 May 2016 to February 2017
Asset Reconstruction Company (India) Limited [Indian Overseas Bank] 8466 36047 May 2016 to February 2017 May 2016 to February 2017
Edelweiss Asset Reconstruction Company Limited [IDFC] - 7030 - February 2016 to December 2016
Edelweiss Asset Reconstruction Company Limited [Oriental Bank of Commerce] - 7495 - February 2016 to December 2016

(c) Default in repayment of loan to Government:

particulars

Amount of default as at 31032017 (Rsin lakhs)

period of default

principal Interest principal Interest
Sugar Development Fund Loan 345295 215859 May 2013 to February 2017 May 2011 to February 2017

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 fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse 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 not paid/provided anymanagerial remuneration during the year Accordingly paragraph 3(xi) of the Order is notapplicable

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 During the year under review the Company has made preferential allotment ofequity shares by way of conversion of borrowings as per the Scheme of Restructure and therequirements of Section 42 of the Act have been complied with Since

the borrowings have been converted into shares the question of utilization does notariseThe company has not made any preferential allotment or private placement of fully orpartly convertible debentures during the 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 them Accordingly paragraph 3(xv)of the 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 PN RAGHAvENDRA RAO & Co
Chartered Accountants
Firm Registration Number: 003328S
PR vITTEL
Coimbatore Partner
May 27 2017 Membership Number: 018111

Annexure - B to the Independent Auditors' 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 ended March 31 2017

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 2017 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 detectedAlso 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 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

For PN RAGHAvENDRA RAO & Co

Chartered Accountants

Firm Registration Number: 003328S

PR vITTEL

Partner

Membership Number: 018111

Coimbatore

May 27 2017