We have audited the accompanying financial statements of The Ugar Sugar Works Ltd. (“the
Company”), which comprise the Balance Sheet as at March 31, 2026, 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, 2026, the Profit 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 for financial year ended March 31, 2026. 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. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit
of the financial statements section of our report, including in relation to these matters. Accordingly, our
audit included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial statements.
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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
The Company is involved in direct and
indirect tax litigations of Rs. 427.85
Lakhs. The Company has also provided
corporate guarantee of Rs. 7,700 Lakhs
to the Banks for Harvesting and
Transportation Loan, outstanding
balance of Rs. 5,784.02 lakhs as on
31-3-2026.
Whether liability is recognized or
disclosed as a contingent liability is
inherently judgmental and dependent
on assumptions and assessment. We
placed specific focus on the judgements
in respect to these demands against the
Company. Determining the amount, if
any, to be recognized or disclosed in the
financial statements, is inherently
subjective. Therefore, it is considered to
be a key audit matter.
(Refer Note D (1) to Financial
Statements)
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Our procedures included, but were not limited to, the
following:
• Obtained an understanding from the management
with respect to process and controls followed by
the Company for identification and monitoring of
significant developments in relation to the
litigations, including completeness thereof.
• Obtained the list of litigations from the
management and reviewed their assessment of the
likelihood of outflow of economic resources being
probable, possible or remote in respect of the
litigations.
• Assessed management’s discussions held with
their legal consultants and understanding
precedents in similar 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(1) in the financial statements
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2.
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Valuation of Sugar Inventory
Manufacturing of Sugar is complex
process which leads to generation of
certain joint products and by products
which are used for generation of other
products, sold in the market as well as
used as input in the manufacturing of
Sugar. The valuation requires use of
management’s judgements and
assumptions regarding elimination of
inter-divisional profits, allocation of
costs of production between joint
products based on their relative sales
value and net realizable value (NRV) of
different products which is further
dependent upon the market conditions,
minimum selling prices, subsequent
inventory sale data, current sale prices,
notifications/press releases from the
government authorities, technical
estimates of expected recovery of final
products being produced and
incremental cost of products
manufactured using joint products.
These assumptions are subject to
inherent uncertainties since they are
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We applied the following audit procedures in this area,
among others, to obtain sufficient appropriate audit
evidence:
• Evaluated the accounting policy of sugar inventory
in terms of relevant accounting standard;
• Tested the design, implementation and operating
effectiveness of the Company’s key controls over
computation of cost of sugar inventory for each
sugar mill;
• Assessed the appropriateness of the principles
used in the valuation of Inventory and analyzed the
reasonableness of significant judgements/
assumptions used by the management in their
valuation models along with their consistency
based on historical/industrial data trends such as
sugar recovery rates, generation of Molasses and
Bagasse.
• Tested the cost sheet data of all Sugar Plants. We
assessed the adequacy of the method used,
relevance and reliability of data and the formula
applied for determining the cost of sugar inventory.
This included the basis of allocation of cost to by¬
products based on Net Realizable Value (NRV). In
addition, we assessed the impact of notifications/
orders of the Government Authorities on cost of
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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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likely to be influenced by nature and
economic factors including
uncertainties that may affect the
industry on the whole
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sugar inventory. For cost of conversion, we
assessed the impact of variability in seasonal
factors including number of Sugarcane crushing
days and recovery of sugar from cane.
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Owing to the significance of the carrying
value of Sugar inventories(Rs.
47,430.86 Lakhs), the complexities
discussed above and the fact that any
changes in the management’s
judgement or assumptions is likely to
have a significant impact on the
ascertainment of carrying values of
inventories, we have considered this
area as a key audit matter.
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• Attended the Physical Inventory verification for the
year ended 31st March 2026 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 information included in the Annual 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.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Company’s Management and Board of Directors are 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, including the Indian Accounting Standards (Ind AS) specified under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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.
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 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.
2. 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, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors for the year ended March
31, 2026 taken on record by the Board of Directors, none of the directors is disqualified as on
March 31, 2026 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 to us:
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 is no 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 company has neither declared nor paid any dividend for the financial Year 2024-25.
Further, the proposed final dividend for financial year 2025-26, which will be paid after
approval by the members in the annual general meeting, is in accordance with section 123 of
the Act to the extent applicable.
vi. Based on our examination which included test checks, the company has used an accounting
software for maintaining its books of account which has a feature of recording audit trail (edit
log) facility and the same has operated throughout the year for all relevant transactions
recorded in the software. Further, as the Audit trail was enabled from 19th of February 2025,
for the previous year, the audit trail has been preserved by the Company as per the statutory
requirements for record retention from 19th February 2025.
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 : Pune Membership No.: 121162
Date : May 12, 2026 UDIN: 26121162QEWKHB3047
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