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Andhra Sugars Ltd.

BSE: 590062 Sector: Others
NSE: ANDHRSUGAR ISIN Code: INE715B01013
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OPEN 683.95
PREVIOUS CLOSE 668.65
VOLUME 6956
52-Week high 698.35
52-Week low 270.85
P/E 16.32
Mkt Cap.(Rs cr) 1,806
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 683.95
CLOSE 668.65
VOLUME 6956
52-Week high 698.35
52-Week low 270.85
P/E 16.32
Mkt Cap.(Rs cr) 1,806
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Andhra Sugars Ltd. (ANDHRSUGAR) - Auditors Report

Company auditors report

To the Members of THE ANDHRA SUGARS LIMITED TANUKU Report on theStandalone Financial Statements Opinion

We have audited the accompanying financial statements of THE ANDHRASUGARS LIMITED ("the company") which comprise the Balance Sheet as at March31st 2020 the Statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "the financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the accompanying financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standard) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 the profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standard on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those standards are further described in the Auditorsresponsibility for the Audit of Financial Statements section of our report. We areindependent of the company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of financial statements under the provisions of the Act and therules made thereunder and we have fulfilled our ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Key Audit Matters

Key Audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone financial statements of thecurrent period. These Matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter How our audit addressed the Key Audit Matter
1.Valuation of Investments in Unquoted Equity Shares of Andhra Pradesh Gas Power Corporation Limited (APGPCL)
The company is a shareholder of Andhra Pradesh Gas Power Corporation Limited. Investments in the entity are measured at fair value through income approach. We assessed the management's approach to valuation for these investments by performing the following procedures:
The fair value of investments as on 31st March 2020 is Rs.7754.92 lakhs. • . Understood and evaluated the procedure followed by the management in calculation of savings in power cost.
The management applies significant judgements and estimations in arriving at the fair value of investments considering the factors such as units of power consumption cost of government power and savings per unit to be constant for every year and assuming the investments to be made at cost of equity. • . We have obtained and tested evidence to support the management's assessment regarding the fair value of investment.
As per the MOU between APGPCL and its shareholders each shareholder is entitled to receive power generated in proportion to its shareholding at cost of generation plus 20% of its overheads which is substantially lower than the price charged by DISCOMs. • . We have reviewed various judgements and estimates considered by management in valuation of investment.
Conclusion: Based on the above procedures performed the management's determination of fair value of investment is reasonable as per principles of Ind AS
We have considered this as a key audit matter because any changes in the above factors in the subsequent financial years shall have a significant financial impact
Refer Note No. to the financial statements.
2. Determination of Net Realizable Value of inventory of Sugar
(Refer Note no. 8 to the financial Statements) Our procedures included the following: .
The company has an inventory of sugar with carrying value of Rs 23113.69 lakhs The inventory of sugar is valued at lower of cost or Net realizable value.We have considered this as a key audit matter given the significant judgements involved in the consideration of factors such as Minimum sale price Monthly release quota fluctuation in selling price and related notifications issued by the government in determination of net realizable value • We understood and tested the design and operating effectiveness of controls as established by the management in determination of net realizable value of inventory of sugar
• . We have reviewed the various factors considered by the management in determining the net realizable value of sugar Conclusion: Based on the above procedures performed the management's determination of the net realizable value of inventory of sugar as at the year end and comparison with cost for valuation of inventory is considered to be reasonable.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Corporate Governance and Shareholder's Informationbut does not include the standalone financial statements and our auditor's reportthereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the financial position financial performance including other comprehensiveincome cash flows and changes in equity of the Company in accordance with the IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Companies Act 2013 readwith relevant rules issued there under and other accounting principles generally acceptedin India.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of thecompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofstandalone Ind AS financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors isresponsible for assessing the company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order2016("the Order") issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the Annexure A a statement on thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.

2) As required by Section 143(3) of the Companies Act2013 we reportthat:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

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

d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act2013 read with Rule 7 of Companies (Accounts) Rules 2014.

e) On the basis of written representations received from the directorsas on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as adirector in terms of Section 164(2) of the Act.

f) With respect to the adequacy of internal financial controls withreference to the financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate report in "Annexure B" Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of thecompany's internal financial controls with reference to the financial statements.

g) With respect to the other matters to be included in theAuditor's report under Section 197(16) In our opinion and according to theinformation and explanations given to us the remuneration paid by the Company to itsdirectors during the current year is in accordance with the provisions of Section 197 ofthe Act. The remuneration paid to any director is not in excess of the limit laid downunder Section 197 of the Act.

The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.

h) With respect to the other matters to be included in theAuditor's report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements (Refer Note 31 to thestandalone Ind AS financial statements);

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company except for anamount of Rs.34159/- being the Fixed deposit and Interest remitted on 1stApril 2020 beyond the due dates.

For M/s K.S RAO & Co.
Chartered Accountants
Firm Registration No. 003109S
K.VAMSI KRISHNA
Partner
Camp: Tanuku ICAI Membership No:238809
Date: 27-06-2020

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in Paragraph 1 under the heading of"Report on other Legal and Regulatory Requirements" of our report of even dateto the members of THE ANDHRA SUGARS LIMITED TANUKU for the year ended 31stMarch 2020. We report that: (i). In respect of the Company's fixed assets (a) Thecompany has maintained proper records showing full particulars including quantitativedetails and situation of fixed assets.

(b) The company has a regular programme of physical verification of itsfixed assets by which all fixed assets are verified in a phased manner over a period ofthree years. Pursuant to such programme the company has physically verified its fixedassets at all locations during the year under report. In our opinion periodicity ofphysical verification is reasonable having regard to the size of the company and thenature of its assets. (c) In our opinion and according to the information and explanationsfurnished to us the title deeds of immovable properties are held in the name of thecompany.

(ii). According to the information and explanation given to us theinventory has been physically verified by the management at reasonable intervals and thediscrepancies noticed during such physical verification of inventories as compared tobooks have been properly dealt with in the books of account.

(iii). The Company has granted loan to a body corporate in the registermaintained under section 189 of the Companies Act 2013 and the outstanding balance as on31st March 2020 is Rs.250 lakhs: a. The terms and conditions of the grant ofsuch loan are prima facie not prejudicial to the interest of the company. b. As per thestipulations mentioned in the loan agreement Principal is repayable on 31stMarch 2021 and the payment is as per the terms of the agreement except one installment ofRs. 50 lakhs which was deferred to 30th June 2021 with the consent of TheAndhra Sugars Limited on account of lockdown declared by the Government of India due toCOVID-19. c. There is no amount of overdue on account of Principal and Interestrecoverable as at 31st March 2020.

(iv). In our opinion and according to the information and explanationsgiven to us the company has not granted any loans guarantees and security in accordancewith the provisions of section 185 of the Companies Act 2013 except for an amount of Rs.1551836/- to its subsidiary being the advance for purchase of scrap.

The company has complied with the provisions of section 186 of theCompanies Act 2013 in respect of Loans and investments made by the company.

(v). In our opinion the company has complied with the provisions ofsection 73 to 76 and other applicable provisions of the Companies Act 2013 and Companies(Acceptance of Deposits) Rules 2014 with regard to the deposits accepted from the public.According to the information furnished to us no Order has been passed on the company bythe Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal for non-compliance with the provisions of Sections 73 to 76 ofthe Companies Act 2013.

(vi). We have broadly reviewed the books of account and recordsmaintained by the company at its Sugar Units Caustic Soda Division Caustic PotashDivision Sulphuric Acid Divisions Superphosphate Division and Rectified Spirit ofDistillery Division pursuant to the Rules made by the Central Government for themaintenance of Cost Records under section 148 (1) of the Companies Act 2013 and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained.

(vii). (a) According to the information and explanations given to usand on the basis of our examination of the records of the company in our opinion thecompany is regular in depositing with the appropriate authorities the undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxGoods and Service Tax Customs Duty Cess and other material statutory dues applicable toit with appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Income Tax Goods and ServicesTax Customs Duty Cess and other material statutory dues applicable to it and noundisputed statutory dues were outstanding as at the date of Balance Sheet under reportfor a period of more than six months from the date they became payable except.

Sl. No. Name of the Statute Period Amount (Rs. In lakhs) Remarks
1. Andhra Pradesh State Excise Act Upto August 1976 3.58 (Establishment Charges) Pending receipt of demand by the company
2. Andhra Pradesh State Excise Act August 1976 to March 2015 18.75 (Interest on above) Pending receipt of demand by the company

(b) According to the information and explanations given to us therewere no amounts payable in respect of Provident Fund Employees' State InsuranceIncome Tax Goods and Service Tax Customs Duty Cess and other material dues in arrearsas at 31st March 2020 that have been disputed by the company and hence werenot remitted to the concerned authorities at the date of the balance sheet under reportexcept

Sl. No. Nature of dues Name of the statute Period Amount (Rs. In lakhs) Forum where the dispute is pending
1 Water (Prevention and control of Pollution) Cess Act 1977 Cess 01-04-78 to 1990-91 0.50 Appellate Committee of the Govt. of A.P.
2 Sales Tax laws in different States Sales Tax 2002-03 to 2011-12 192.20 Different appellate Authorities
3 Income Tax Act 1961 Income Tax 20017-18 to 2019-20 32.73 Commissioner of Income Tax Appeals
4 Central Excise Act 1944 Excise Duty 2011-12 to 2016-17 799.35 Different departmental appellate authorities

(viii). According to the records of the company examined by us and theinformation and explanations given to us there were no defaults in repayment of loans orborrowings to banks and Government during the year under report.

(ix). The company did not raise any money by way of initial publicoffer or further public offer (including debt instruments) except Interestsub-vention/soft loans from banks during the year under report and the same were appliedfor the purposes for which those were raised.

(x). During the course of our examination of the books of and recordsof the company carried out in accordance with the Generally Accepted Auditing Practicesin India and according to the information and explanations given to us we have neithercome across any instances of material fraud by the company or any fraud on the company byits officers or employees noticed or reported during the year nor have we been informedof any such case by the management.

(xi). According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.

(xii). The company is not a Nidhi company. Accordingly the requirementof clause 3(xii) of the Order is not applicable to the company during the year underreport.

(xiii). According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards.

(xiv).According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him under the provisions ofSection 192 of Companies Act 2013. Therefore the provisions of clause 3(xv) of the Orderare not applicable.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For M/s K.S RAO & Co.
Chartered Accountants
Firm Registration No. 003109S
K.VAMSI KRISHNA
Partner
ICAI Membership No:238809
Camp: Tanuku
Date: 27-06-2020

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to thefinancial statements of The Andhra Sugars Limited ("the Company") as of31st March 2020 in conjunction with our audit of the standalone Ind ASfinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the company is responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to the financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of Internalfinancial controls with reference to the financial statements issued by the Institute ofChartered Accountants of India (‘ICAI'). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding 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 Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the financial statements based on our audit.We conducted our audit in accordance with the Guidance Note on Audit of Internal financialcontrols with reference to the financial statements (the "Guidance Note") andthe Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to the financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls with reference to thefinancial statements included obtaining an understanding of internal financial controlswith reference to the financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls with reference to FinancialStatements

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to the financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the financial statements to future periods are subject to therisk that the internal financial control over financial reporting may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols with reference to the financial statements were operating effectively as at 31stMarch 2020 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal financial controls with reference to the financialstatements issued by the Institute of Chartered Accountants of India.

For M/s K.S RAO & Co.
Chartered Accountants
Firm Registration No. 003109S
K.VAMSI KRISHNA
Partner
ICAI Membership No:238809
Camp: Tanuku
Date: 27-06-2020

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