We have audited the accompanying financial statements of The Ugar Sugar Works Ltd. (“the
Company”), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of
Cash Flows for the year ended on that date, and a summary of the material accounting policies and
other explanatory information (hereinafter referred to as “the financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in
the manner so required and give a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 2025, the Loss and total comprehensive
Income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the financial statements section of our
report. We are independent of the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (ICAI) together with the independence requirements that
are relevant to our audit of the financial statements under the provisions of the Act and the Rules
made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the Financial Statements of the current period. These matters were addressed in the
context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, we do
not provide a separate opinion on these matters. For each matter below, our description of how our
Audit addressed the matter is provided in that context. We have determined the matters described
below to be the key audit matters to be communicated in our report.
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Sr. No.
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Key Audit Matter
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How the matter was addressed
in the audit
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1
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Contingent Liability
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Our procedures included, but were not
limited to, the following:
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The Company is involved in direct and
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• Obtained an understanding from the
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indirect tax litigations of Rs. 519.32
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management with respect to process
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Lakhs. The Company has also provided
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and controls followed by the Company
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corporate guarantee of Rs. 6,000 Lakhs to
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for identification and monitoring of
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the Banks for Harvesting and
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significant developments in relation to
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Transportation Loan.
Whether the liability is recognized or
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the litigations, including completeness
thereof.
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disclosed as a contingent liability is
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• Obtained the list of litigations from the
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inherently judgmental and dependent on
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management and reviewed their
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assumptions and assessment. We placed
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assessment of the likelihood of outflow
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specific focus on the judgements in
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of economic resources being probable,
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respect to these demands against the
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possible or remote in respect of the
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Company. Determining the amount, if any,
to be recognized or disclosed in the
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litigations.
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financial statements, is inherently
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• Assessed management’s discussions
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subjective. Therefore, it is considered to be
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held with their legal consultants and
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a key audit matter.
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understanding precedents in similar
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(Refer Note D (1) to Financial Statements)
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cases.
* We verified the appropriateness of the
accounting policies, disclosures related
to provisions for sub judice matters
and details of contingent liabilities in
note D(l) in the financial statements
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2
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Valuation of Sugar Inventory
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We applied the following audit procedures
in this area, among others, to obtain
sufficient appropriate audit evidence:
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Manufacturing of Sugar is complex
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• Evaluated the accounting policy of
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process which leads to generation of
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sugar inventory in terms of relevant
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certain joint products and by products
which are used for generation of other
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accounting standard;
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products, sold in the market as well as
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• Tested the design, implementation
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used as input in the manufacturing of
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and operating effectiveness of the
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Sugar. The valuation requires use of
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Company’s key controls over
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management’s judgements and
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computation of cost of sugar
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assumptions regarding elimination of
inter-divisional profits, allocation of costs
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inventory for each sugar mill;
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of production between joint products
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• Assessed the appropriateness of the
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based on their relative sales value and net
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principles used in the valuation of
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realisable value (NRV) of different products
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Inventory and analysed the
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which is further dependent upon the
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reasonableness of significant
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market conditions, minimum selling
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judgements/ assumptions used by
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prices, subsequent inventory sale data,
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the management in their valuation
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current sale prices, notifications/press
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models along with their consistency
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releases from the government authorities,
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based on historical/industrial data
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technical estimates of expected recovery of
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trends such as sugar recovery rates,
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final products being produced and
incremental cost of products
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generation of Molasses and Bagasse.
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manufactured using joint products. These
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• Tested the cost sheet data of all Sugar
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assumptions are subject to inherent
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Plants. We assessed the adequacy of
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uncertainties since they are likely to be
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the method used, relevance and
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influenced by nature and economic factors
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reliability of data and the formula
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including uncertainties that may affect the
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applied for determining the cost of
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industry on the whole
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sugar inventory. This included the
basis of allocation of cost to by¬
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Owing to the significance of the carrying
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products based on Net Realizable
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value of Sugar inventories (Rs. 27,659.51
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Value (NRV). In addition, we assessed
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Lakhs), the complexities discussed above
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the impact of notifications/ orders of
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and the fact that any changes in the
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the Government Authorities on cost of
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management’s judgement or assumptions
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sugar inventory. For cost of
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is likely to have a significant impact on the
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conversion, we assessed the impact of
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ascertainment of carrying values of
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variability in seasonal factors
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inventories, we have considered this area
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including number of Sugarcane
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as a key audit matter.
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crushing days and recovery of sugar
from cane.
• Attended the Physical Inventory
verification for the year ended 31“
March 2025 and performed
verification on test check basis at the
Sugar Plants.
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Information Other than the financial statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the preparation of the other information. The other
information comprises the Management Discussion and Analysis, Board’s Report including Annexures
to Board’s Report, Corporate Governance and Business Responsibility Report, but does not include the
financial statements and our auditor’s report thereon.
Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report,
Corporate Governance and Shareholder’s Information is expected to be made available to us after the
date of this auditor’s report, hence our opinion is based on Financial Statements only.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained during the course of our audit or otherwise appears to
be materially misstated. When we read Management Discussion and Analysis, Board’s Report including
Annexures to Board’s Report, Corporate Governance and Business Responsibility Report, if we
conclude that there is material misstatement therein, we are required to communicate the matter to
those charged with governance.
Management’s Responsibility for the financial statements
The Company’s Management and Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these financial statements that give a true and fair
view of the financial position, financial performance, total comprehensive income, changes in equity
and cash flows of the Company in accordance with the Ind AS and other accounting principles
generally accepted in India. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
The Company’s Management and Board of Directors are responsible for overseeing the Company’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due 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 audit conducted in accordance with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(I) of the Act, we
are also responsible for expressing our opinion on whether the Company has adequate internal
financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
financial statements may 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 financial statements.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of 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 the Company so
far as it appears from our examination of those books, except for the matters stated in the
paragraph g(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,
Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are
in agreement with the relevant books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under
Section 133 of the Act.
e) On the basis of the written representations received from the directors for the year ended
March 31, 2025 taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164
(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in
“Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and
to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financial position in
its financial statements - Refer Note D-1 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company
iv. With respect to clause (e) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014,
as amended
a. The management has represented that, to the best of it’s knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the company to or in any
other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
b. Management has represented, that, to the best of it’s knowledge and belief, no funds
have been received by the company from any person (s) or entity(ies), including
foreign entities (“Funding Parties”), with the understanding, whether recorded in
writing or otherwise, that the company shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
c. Based on such audit procedures that we have considered reasonable and
appropriate in the circumstances; nothing has come to their notice that has caused
us believe that the representations under sub-clause (a) and (b) contain any material
mis-statement.
v. The final dividend paid by the Company, during the financial year, in respect of the previous
financial year, is in accordance with section 123 of the Companies Act 2013, to the extent it
applies to payment of such dividend.
vi. " Based on our examination which included test checks, The Company has enabled the Audit
trail functionality for the accounting software effective 19th February 2025. Further, during
the course of audit we did not come across any instance of audit trail feature being tampered
with."
In respect of proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 regarding
preservation of audit trail, the Company has preserved such edit logs generated effective 19th
February, 2025.
2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the
matters specified in paragraphs 3 and 4 of the Order.
3. With respect to the other matters to be included in the Auditor’s Report in accordance with the
requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us,
the remuneration paid by the Company to its directors during the year is in accordance with the
provisions of section 197 of the Act.
For Kirtane& Pandit LLP
Chartered Accountants
Firm Registration No. 105215W/W100057
Suhrud Lele
Partner
Place : Ugar Khurd, Membership No.: 121162
Date :12th May 2025 UDIN:25121162BMJHVH6430
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