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Kothari Sugars & Chemicals Ltd.

BSE: 507190 Sector: Agri and agri inputs
NSE: KOTARISUG ISIN Code: INE419A01022
BSE 05:30 | 01 Jan Kothari Sugars & Chemicals Ltd
NSE 00:00 | 14 Dec 10.25 -0.25
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Kothari Sugars & Chemicals Ltd. (KOTARISUG) - Auditors Report

Company auditors report

FOR THE YEAR ENDED 31st MARCH 2018

To the members of Kothari Sugars and Chemicals Limited

Report On The Standalone Ind As Financial Statements

1. We have audited the accompanying Standalone Ind AS financial statements of KothariSugars and Chemicals Limited ("the Company") which comprises the BalanceSheet as at 31st March 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Ind AS 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 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.

3. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

4. Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit. In conducting our audit we have taken into account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder. We conducted our audit of the Standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the Standalone Ind AS financial statementsare free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amountsand 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 accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

7. 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 Indian Accounting Standards and accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2018 and itsprofit total comprehensive income its cash flows and the changes in equity for the yearended on that date.

Other Matters

8. The comparative financial information of the Company for the year ended 31stMarch 2017 and the transition date opening balance sheet as at 1st April 2016included in these Standalone Ind AS financial statements are based on the previouslyissued statutory financial statements prepared in accordance with the Companies(Accounting Standards) Rules 2006 audited by another firm of Chartered Accountants andtheir reports for the year ended 31st March 2017 and 31st March 2016dated 30th May 2017 and 27th May 2016 respectively expressing anunmodified opinion on those Standalone financial statements and have been restated tocomply with Ind AS. Adjustments made to the previously issued said statutory financialinformation for the differences in the accounting principles adopted by the Company ontransition to the Ind AS have been audited by us. Our opinion is not modified in respectof these matters.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order 2016 ("the Order")and issued by the Central Government of India in terms of sub-section 11 of Section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the said Order to the extent applicable.

10. 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) in our opinion proper books of account as required by law have been kept by theCompany 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;

(d) in our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act;

(e) on the basis of written representations received from the Directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2018 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 with reference tofinancial statements in place and the operating effectiveness of such controls refer toour separate report in Annexure B; and

(g) 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 explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No.43 to the Standalone Ind AS financialstatements.

ii. the Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. there were no amounts required to be transferred to the Investor Education andProtection Fund by the Company during the year.

For P.CHANDRASEKAR LLP
Chartered Accountants
(FRN : 000580S/S200066)
Place : Chennai S.SRIRAM
Date : 28th May 2018 Partner
Membership No. 205496

Annexure - A to Independent Auditors' Report - 31s* March 2018 (Referred toin our report of even date)

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

b) As explained to us these fixed assets have been physically verified by theManagement at regular intervals; as informed to us no material discrepancies were noticedon such verification.

c) The title deeds of immovable properties are held in the name of the Company.

ii. The Management has conducted physical verification of inventory at reasonableintervals and no material discrepancies were noticed.

iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not provided any loans secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register maintained under Section 189 of the Companies Act 2013.

iv. The Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of investments made by the Company. The Company has notprovided any loans or guarantee or security to any company covered under Section 185 ofthe Companies Act 2013.

v. The Company has not accepted any deposits from public.

vi. On the basis of the records produced to us we are of the opinion that primafacie the cost records prescribed by the Central Government under sub-section (1) ofSection 148 of the Companies Act 2013 have been maintained. However we have not carriedout any detailed examination of such records.

vii. According to the information and explanations given to us in respect of statutorydues:

a) the Company is regular in depositing with the appropriate authorities the undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax ServiceTax Sales Tax Customs Duty Excise Duty and Cess. To the best of our knowledge andaccording to the information and explanations given to us there are no arrears ofoutstanding statutory dues as at 31st March 2018 for a period of more than sixmonths from the date they become payable.

b) Details of dues of various taxes viz. Income Tax Sales Tax VAT Service TaxCustoms Duty Excise Duty not deposited as on 3151 March 2018 on account ofdisputes given below.

Name of the Statute Nature of the Dues Amount (Rs. lakh) Forum where the dispute is pending period to which the dues belong to
Central Excise Act 1944 Excise Duty 78.69 CESTAT 1993-94 to 1996-97 2003-04 2006-07
Central Excise Act 1944 Excise Duty 116.68 Assistant Commissioner Central Excise 1996-97 1997-98 2010-112003-04 2004-05 2014-15
Central Excise Act 1944 Excise Duty 438.36 Joint/ Assistant Commissioner Central Excise 2003-04 to 2011-12
Central Excise Act 1944 Excise Duty 21.89 High Court Madras 1995-96 1998-99 1999-2000 2002-03
Central Excise Act 1944 Excise Duty 128.19 Supreme Court 1995-96 to 1998-99
Central Excise Act 1944 Excise Duty 6.57 Commissioner (Appeals) Central Excise 2014-15
Finance Act 1994 Service Tax 1.32 CESTAT 2011-12
Tamil Nadu Tax on Consumption or Sale of Electricity Act 2003 Electricity consumption tax 382.63 Supreme Court 2003-04 to 2017-18

viii. On the basis of verification of records and according to the information andexplanations given to us the Company has not defaulted in repayment of loans or borrowingto a financial institution bank Government or dues to debenture holders.

ix. In our opinion and according to the information and explanations given to us theCompany has not raised monies by way of initial public offer or further public offer(including debt instruments) during the year. The term loans availed were applied for thepurposes for which they were raised.

x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the Management no fraud by the Company and no fraud on the Company by its officersor employees has been noticed or reported during the year.

xi. The Company has not paid any managerial remuneration and hence the provisions ofSection 197 read with Schedule V to the Companies Act 2013 are not applicable.

xii. The Company is not a Nidhi Company and hence compliance with the provisions of theNidhi Rules is not applicable.

xiii. In our opinion and according to the information and explanations given to us alltransactions with related parties are incompliance with Sections 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the financialstatements as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him which will come under the purview of Section 192of the Companies Act 2013.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For P.CHANDRASEKAR LLP
Chartered Accountants
(FRN : 000580S/S200066)
Place : Chennai S.SRIRAM
Date : 28th May 2018 Partner
Membership No. 205496

Annexure - B to the Independent Auditors' Report - 31s* March 2018

(Referred to in our report of even date)

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 KothariSugars and Chemicals Limited ("the Company") as of 31st March 2018 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

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"). 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

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the financial statementsbased on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting ("the Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements werein place and if such controls were operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to 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.

5. We believe that the audit evidence we have obtained issufficient and appropriate toprovide a basis for our auditopinion on the Company's internal financial controlswithreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

6. A company's internal financial controls with reference to financial statements aredesigned 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 controls withreference to financial statements includes those policies and procedures that

a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

b) 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 witha uthorisations of management and directors of the Company; and

c) 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 with reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluationof the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such internal financialcontrols were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For P.CHANDRASEKAR LLP
Chartered Accountants
(FRN : 000580S/S200066)
S.SRIRAM
Place : Chennai Partner
Date : 28th May 2018 Membership No. 205496