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Indian Sucrose Ltd.

BSE: 500319 Sector: Agri and agri inputs
NSE: OSWALSUG ISIN Code: INE557C01017
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NSE 05:30 | 01 Jan Indian Sucrose Ltd
OPEN 60.05
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VOLUME 17740
52-Week high 99.00
52-Week low 39.50
P/E 2.77
Mkt Cap.(Rs cr) 103
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 60.05
CLOSE 60.15
VOLUME 17740
52-Week high 99.00
52-Week low 39.50
P/E 2.77
Mkt Cap.(Rs cr) 103
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Sucrose Ltd. (OSWALSUG) - Auditors Report

Company auditors report

To

The Members of Indian Sucrose Limited

Report on the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of M/s. Indian SucroseLimited

("the Company") which comprise the Balance Sheet as at March 312021 andthe Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of changes in Equity for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "StandaloneFinancial Statements'').

In our opinion and to the best of our information and according to the explanationsgiven to us except the matter described under the paragraph basis for qualified opinionthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as atMarch 31 2021 the profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate except inrespect of matters described blow to provide a basis for our audit opinion on thestandalone financial statements. a) The company is holding Equity investment in RangarBreweries Ltd. Yadu Resorts Private Ltd. and Versatile Events Private Ltd. As per IndAS-32 "Financial Instrument: Presentation" the financial instruments should bepresented at fair value but the fair valuation of above financial instrument as on31/03/2021 is not available with the company. Accordingly the same has been presented attheir carrying cost as on 31/03/2020.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended 31 March 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matter described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibility described in theAuditor's responsibility for the audit of standalone financial statement section of ourreport including in relation to the matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis foraudit opinion on the accompanying standalone financial statements.

(a) Inventory valuation (as described in note 6 of the financial statements) We performed the following procedures among others:
As per the accounting policy of the company inventory of finished goods of sugar is valued at the lower of cost and net realizable value (‘NRV'). ? Considered the appropriateness of the company's accounting policies relating to valuation of finished goods sugar and assessing compliance with the applicable accounting standards.
Sugar industry being seasonal in nature the assessment of carrying value at each reporting date involves ascertainment of cost incurred till that reporting period for each sugar mill and estimation of corresponding NRV. ? Tested the effectiveness of the company's controls over calculation of cost of finished goods for each sugar mill and estimation of corresponding NRV.
We determined this to be a key audit matter given the significant judgement involved in the process due to different valuation parameters among sugar mills arising out of variability in the seasonal factors e.g. number of sugarcane crushing days recovery of sugar from cane crushing and fluctuating selling price. Based on the data used by the company to arrive at cost and NRV including minimum selling price and actual selling price during the year end we assessed the permanence of methods used relevance and reliability of data and the calculations applied we also compared them with previously considered corresponding valuation to assess the quality of managements NRV estimates.
Based on the above procedure performed we concluded that managements process for determination of NRV and comparing that with cost of inventory of finished sugar is reasonable and accordingly the valuation of finished inventory of sugar is appropriate.

Emphasis of Matter

The Board of Directors in its meeting held on 11.04.2020 took a decision to provide atemporary loan to farmers in the shape of providing temporary margin to Banks against loanprovided by banks to farmers subject to the condition of maximum outstanding at any givenpoint of time shall not exceed Rs.5.00 crore with outstanding maximum period of one week.Accordingly as per relevant ledger account during the year the company had paid Rs.57.12crore to banks on different dates and an equivalent amount is repaid by the banks tocompany thus there is no outstanding as on 31.03.2021. In respect of above transactionsthe company is maintaining only consolidated voucher of daily payment and receipt entrypassed in the books of accounts.

Other information

The company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance Report and Shareholder Information but does not include thestandalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Managementfs Responsibility for the Standalone 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 as amended. This responsibility also includes the maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding of theassets of the Company and for preventing and detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the company's ability to continue as going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the company or to cease operations or has norealistic alternative but to do so.

Those charged with governance are also responsible for overseeing the company'sfinancial reporting process.

Auditorfs Responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that include our opinion. Reasonable assuranceis the high level of assurance but is not a guarantee that an audit conducted inaccordance with SAswill always detect a material misstatement when it exists. Misstatementcan arise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of this standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

? Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. ? Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

? Conclude on appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the company's abilityto continue as a going concern. If we conclude that material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the company to cease tocontinue as a going concern.

? Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

? Materiality is the magnitude of misstatements in the annual standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the annual standalone financial statementsmay be influenced. We consider quantitative materiality and qualitative factors in (i)planning the scope of our audit work and in evaluating the results of our work; and (ii)to evaluate the effect of any identified misstatements in the annual standalone financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybeexpected to outweigh the public interest benefits of such communication.

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 of India in terms of sub-section 11 of section 143 of the Act wegive in the "Annexure-A" which forms part of this report a statement on thematters prescribed in paragraphs 3 and 4 of the Order.

2. 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 possible effects of the matters described in the Basis of QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept 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 Other Comprehensiveincome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of accounts;

d) In our opinion the aforesaid standalone financial statements except in respect ofmatters described in the Basis of Qualified Opinion paragraph above comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 as amended;

e) On the basis of written representations received from the directors as on March 312021 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.

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 included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditor's) Rules 2014 as amended and to thebest of our information and according to the explanations given to us :

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements. Refer Note No. 33 to the standalone financialstatements;

ii) The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;

iii) There are no amounts required to be transferred to the Investors Education andProtection Fund by the Company.

Annexure A to the Auditorfs Report

The Annexure referred to in Independent Auditors' Report to the members of the companyon the financial statements for the year ended 31st March 2021. On the basis of suchchecks as we considered appropriate and according to the information and explanation givento us during the course of our audit we report that:

(i) a) The Fixed Assets register showing full particulars including quantitativedetails and situation of its fixed assets is not upto date and it was informed to us bythe company that due to spread of COVID the company was not able to complete the same intime and the Company is in the process of updating the same.

b) According to the information and explanations given to us Fixed Assets are verifiedby rotation every year.

c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of the immovable properties areheld in the name of the company except in respectof following:

Particulars of Land andBuilding Carrying Value as atMarch 31 2021 Remarks
(Rs. In Lakhs)
49.30 acres of Land & Building purchased from IFCI Bank (acquired under SARFAESI Act 2002) of Mukerian Paper Ltd. 2162.50 Land & Building was purchased from IFCI on 17/02/2010 but registration is pending due to some dispute regarding payment of old outstanding (before purchase by ISL) of Provident
Fund under Employees Provident Fund & Miscellaneous Provisions Act 1952 ("EPF") liability u/s 14B damages & u/s 7Q Interest amounting to Rs.0.74 crore and Rs.0.47 crore respectively.

(ii) a) According to information and explanations given to us the inventories havebeen physically verified during the year by the management. In our opinion the frequencyof verification is reasonable. b) According to the information and explanations given tous no material discrepancies were noticed on physical verification of inventory ascompared tothe book records.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of accounts we report that the Company has granted unsecuredloan / capital advances to seven companies covered in the register maintained undersection 189 of the Companies Act 2013.

(iv) The company has made investment granted the loan and provided guarantee asperdetail below:

a) Investment in shares (at marked to market price):

Particulars Amount
Ranger Breweries Ltd Rs.1285980/-
Yadu Resorts Pvt. Ltd. Rs.9463650/-
Versatile Events (P) Ltd. Rs.3053694 /-

b) Loans granted:

Particulars Amount
Panchvaktra Holdings Rs.1500000/-
Ranger Breweries Ltd Rs.55782055/-
Yadu Sugar Ltd. Rs.224060739/-
Cosmos Industries Limited* Rs.10300000/-
Shervani Sugar Syndicate Limited Rs.15000000/-
High Link Investment Private Limited Rs.106409114/-
SNG Exim Private Limited Rs.40597490/-
Cosmos SugarPvt. Ltd. Rs.21800400/-

*squared up during the year

c) Guarantees:

? The company has provided guarantee to State Bank of India of Rs.13.69 crore inrespect of a loan provided to M/s Ranger Breweries Limited in the Year 2012-13 but thebalance outstanding is Rs.5.00 crores

The company has complied with the requirement of section 186 of the Companies Act2013 pursuant to loans granted guarantees provided and investments made.

(v) According to the information and explanations given to us the Company has notaccepted deposits covered under the provisions of sections 73 to 76 other relevantprovisions of the Companies Act 2013 and the rules framed there under. According to theinformation and explanations given to us no order under the aforesaid sections has beenpassed by the Company Law Board National Company Law Tribunal or Reserve Bank of India orany Court or any other Tribunal on the Company.

(vi) We have broadly reviewed the books of account maintained by the companypursuant tothe rules made by the Central Government for the maintenance of cost records under section148 of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.

(vii) a) According to the information and explanations given to us and on the basis ofthe records of the Company examined by us in our opinion the Company has been regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax Goods and Services Tax (GST) cess and other statutory dues with theappropriate authorities. According to the information and explanations given to us noundisputed amounts in respect of statutory dues payable were outstanding as on the lastday of the financial year concerned for a period of more than six months from the datethey became payable.

b) According to the information and explanations given to us the dues of Income taxand Sales tax which has not been deposited on March 31 2021 on account of any disputeare as follows:

Name of Statue Nature of Dues Financial year to which it pertains Amount (Rs.) Forum where dispute is pending.
Sales Tax Laws Sales tax 1997-98 5.67 Deputy Excise & TaxationCommissioner (Appeal) Punjab & Haryana HighCourt.
1999-2000 16.64 DETC Jalandhar
2000-01 & 2001- 02 39.59 DETC Jalandhar
2002-03 & 2003- 04 36.73 DETC Jalandhar
2004-05 30.16
Sales Tax Laws Purchase Tax 2006-07 157.38 Vat Tribunal ChandigarhVat
2007-08 163.82
2008-09 112.32 Tribunal Chandigarh
2009-10 109.74 DETC Jalandhar
2010-11 232.56 Tribunal Court
2011-12 41.49 Tribunal Court
DETC Jalandhar
DETC Jalandhar

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to a financial institution bank orgovernment. The Company has not issued any debentures during the year or in theprecedingyear. (ix) In our opinion and according to the information and explanations given to usthe term loans taken during the year by the Company have been applied for the purpose forwhich they were raised. The company has not raised money by way of initial public offer orfurther public offer (including debt instruments) during the year.

(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 records of company the company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to Companies Act 2013.

(xii) According to the information and explanation given to us the company is not aNidhi Company. Therefore the provisions of paragraph 3(xii) of the Order are 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 section 177 and 188 of the Act except in respect of matters described inthe Basis of Qualified Opinion paragraph above where applicable and the details of thetransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us the company has notmade preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under audit. Thus the provisions of paragraph 3(xii) of theOrder are not applicable.

(xv) According to 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 director or person connected with him. Accordingly provisions ofparagraph 3 (xv) of the Order are not applicable.

(xvi) According to the information and explanation given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure - B to the Auditor's Report

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 IndianSucrose Limited ("the Company") as of 31st March 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

2. 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness ofthe accounting records and the timely preparation of reliablefinancial information as required under the Companies Act 2013.

3. Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements were 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 with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment ofthe risks of material misstatement of the financial statements whether dueto fraud or error.

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

4. Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these standalone financial statements includes those policies and procedures that: (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements

5. Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

6. Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone financial statements were operating ineffectively as at 31stMarch 2021 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For R. Dewan & Co;

Chartered Accountants

Firm Reg. No.017883N

S/d-

(Rakesh Marwaha )

Partner

M.No. 504991

UDIN: 21504991AAAABO3634

Place: Ludhiana

Date: 30th June 2021

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