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Shree Renuka Sugars Ltd.

BSE: 532670 Sector: Agri and agri inputs
NSE: RENUKA ISIN Code: INE087H01022
BSE 10:02 | 23 Apr 15.65 0.05
(0.32%)
OPEN

15.60

HIGH

15.65

LOW

15.60

NSE 09:59 | 23 Apr 15.65 0.05
(0.32%)
OPEN

15.60

HIGH

15.65

LOW

15.60

OPEN 15.60
PREVIOUS CLOSE 15.60
VOLUME 906
52-Week high 22.40
52-Week low 12.00
P/E
Mkt Cap.(Rs cr) 3,000
Buy Price 15.60
Buy Qty 100695.00
Sell Price 15.65
Sell Qty 3823.00
OPEN 15.60
CLOSE 15.60
VOLUME 906
52-Week high 22.40
52-Week low 12.00
P/E
Mkt Cap.(Rs cr) 3,000
Buy Price 15.60
Buy Qty 100695.00
Sell Price 15.65
Sell Qty 3823.00

Shree Renuka Sugars Ltd. (RENUKA) - Auditors Report

Company auditors report

To the Members of SHREE RENUKA SUGARS LIMITED

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of SHREERENUKA SUGARS LIMITED ("the Company") which comprise the Balance Sheet asat March 31 2017 the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Cash Flows and the Statement of Changes in Equity for the yearthen ended and a accounting policies and other summaryofsignificant explanatoryinformation.

MANAGEMENT'S RESPONSIBILITY FOR THE 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 preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

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 standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the standalone Ind AS financialstatements based on our audit.

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 thereunder.

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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the standalone Ind AS financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs of the Company as at 31st March 2017 and its loss includingother comprehensive income its cash flows and changes in equity for the year ended onthat date.

EMPHASIS OF MATTER

Without qualifying our opinion we draw attention to the recoverable amount of theInvestment made by the Company in its subsidiary company Shree Renuka Global VenturesLtd. Mauritius. This investment is stated at its carrying amount of ` 18245.25 Mn. madeby this subsidiary company in the step down subsidiary company Shree Renuka do BrasilParticipacoes Ltda. (SRDBPL). SRDBPL together with all its subsidiaries have filed forProtection on 28th September 2015 under Judicial Recovery (Law 11.101/2005-RecuperacaoJudicial) in the designated court in the capital of the State of Sao Paulo Brazil. SRDBPLalong with its subsidiaries has filed the proposal for Reorganization Plan before thedesignated court. The designated court approved reorganization plan for its subsidiaryRenuka Vale do Ivai S/A (Renuka VDI) on 26th July 2016 and for Renuka do BrazilS/A on 29th August 2016. On 26th January 2017 a petition was filedby Renuka RDB requesting to convey a new General Creditor's meeting seeking to allow thecompany to reorganize the amount payable to its creditors through the submission of anamendment to its Judicial Reorganization Plan adjusting the payment terms and conditionsof the credits to the current economic and financial reality of the plan. new GeneralCreditors meeting was scheduled for 6th March 2017 (1st call)and 13th March 2017 (2nd call). On 22nd May 2017 anAmended Judicial Reorganization plan of RDB was approved by the General CreditorsAssembly which is pending for approval by the court. Impairment in the value ofinvestments if any will be considered after the receipt of the Judgement of the court.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of sub-section (11) of section 143 of the Actwe give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

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

a. We obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose 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 the Statement of Profit and Loss the Statement of Cash Flows andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account;

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesthereunder.

e. On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof 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 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 have disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer Note 34(v) to the standaloneInd AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 its standalone Ind AS financialstatements in Note 34 (xxiii) as to holdings as well as dealings in Specified Bank Notesduring the period from 8th November 2016 to 30th December 2016 andthese are in accordance with the books of accounts maintained by the company.

For Ashok Kumar Prabhashankar & Co.
Chartered Accountants
Firm Regn No. 004982S
K. N. Prabhashankar
Place: Mumbai Partner
Date: May 29 2017 Membership No. 019575

ANNEXURE A TO THE AUDITORS' REPORT

The Annexure referred to in our report to the members of Shree Renuka Sugars Limited onthe standalone Ind AS financial statements for the year ended March 31 2017. We reportthat:

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

b) As explained to us all fixed assets have been physically verified by the managementduring the year periodically which in our opinion is reasonable having regard to the sizeof the Company and nature of its assets. No material discrepancies were noticed on suchphysical verification.

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) With regard to inventory physical verification has been conducted by themanagement at reasonable material discrepancies intervals and no significant were noticedon the physical verification of stocks and the differences between the book stocks and thephysical stocks have been properly dealt with in the books of account.

iii) In respect of the loans secured or unsecured granted by the Company to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013:

a) The Company has given loans to Eight Subsidiary companies.

b) In our opinion and according to the information and explanations given to us therate of interest and other terms and conditions were not prima facie prejudicial to theinterest of the company.

c) The principal amount is repayable on demand and there is no repayment schedule. Thecompany is regular in receipt of interest from these subsidiaries except from Three whollyowned Subsidiaries.

d) In respect of the said loans the same is repayable on demand and therefore thequestion of overdue amount for more than ninety days does not arise. In respect ofinterest there is no overdue amount except in case of Three wholly owned Subsidiarieswhose Overdue Interest is ` 319.42 Millions.

iv) In respect of the loans investments guarantees and security the Company hascomplied with the provisions of section 185 and 186 of the Companies Act 2013.

v) According to the information and explanations given to us the company has notaccepted any deposits hence reporting on clause (v) of the order is not applicable.

vi) The Central Government has prescribed maintenance of cost records u/s. 148(1) ofthe Companies Act 2013 for some products of the Company. We have broadly reviewed theserecords of the company and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not carried out a detailedexamination of such records.

vii) a) According to the information and explanations given to us and as per books andrecords examined by us there are no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income tax Sales tax Service Tax Duty of CustomsDuty of Excise Value Added Tax Cess and any other statutory dues with appropriateauthorities outstanding as at 31st March 2017 for a period exceeding six monthsfrom the date they became payable.

b) According to the information and explanations given to us and as per the recordsexamined by us the disputed statutory dues aggregating to ` 1388.10 Million that havenot been deposited on account of disputed matters pending before appropriate authoritiesare as under:

Sl No Name of the Statute Nature of Dues Amount Period Forum where Dispute is pending
( ` in Mn)
1 Maharashtra Value Added Tax/CST VAT Credit/CST 5.59 2009-10 2010-11 and 2012-13 Maharashtra Value added tax appeal Kolhapur
2 Central Excise Act 1944 Excise Duty 42.80 2008-09 2011-12 and 2015-16 Commissioner of Central Excise Appeal
775.34 2004 to 2014 CESTAT
3.65 2003-04 Supreme Court of India
3 2.59 2005 to 2009 Commissioner of Central Excise Appeal
Finance Act 1994 Service Tax 33.45 2009 to 2011 CESTAT
4 Custom Act 1962 Custom Duty 249.03 2004 Supreme Court of India
5 Income Tax Act 1961 Income Tax 275.65 2008-09 and 2009-10 Income Tax Appellate Tribunal Panaji
Grand Total 1388.10

viii) The Company has borrowed funds from banks financial institutions and also hasraised funds by way of debentures. There is no default in repayment of dues to banksfinancial institutions and debenture holders.

ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) during the year. The term loans borrowed during theyear have been utilised for the purposes for which they were raised.

x) As per information and explanations given to us and on the basis of our examinationsof books and records there were no frauds on or by the company has been noticed orreported during the year.

xi) The Company has paid/provided the managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V of theCompanies Act 2013.

xii) This is not a Nidhi Company hence reporting under clause (xii) does not apply.

xiii) As per information and explanations given to us and on the basis of ourexaminations of books and records all the transactions with the related parties are incompliance with Section 177 and 188 of Companies Act 2013 wherever applicable and thedetails have been disclosed in the Standalone Ind AS Financial Statements as required bythe applicable accounting standards.

xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

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 them and hence reporting on thisclause is not applicable.

xvi) The company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934

For Ashok Kumar Prabhashankar & Co.
Chartered Accountants
Firm Regn No. 004982S
K. N. Prabhashankar
Place: Mumbai Partner
Date: May 29 2017 Membership No. 019575

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 ShreeRenuka Sugars Limited ("the Company") as of 31st March 2017 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 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 company's policies the safeguarding ofits 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.

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 standalone Ind AS financial statements whether due to fraudor error.

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

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Ashok Kumar Prabhashankar & Co.
Chartered Accountants
Firm Regn No. 004982S
K. N. Prabhashankar
Place: Mumbai Partner
Date: May 29 2017 Membership No. 019575