We have audited the accompanying financial statements
of Dwarikesh Sugar Industries Limited (“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 material accounting
policies and other explanatory information including notes
to the financial statements (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, as amended (“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, thereof (“Ind AS”) and
other accounting principles generally accepted in India, of
the state of affairs of the Company as at March 31, 2025,
and its profit(including other comprehensive loss), 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 ethical 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 obtained by us 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,
and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the
key audit matters to be communicated in our report.
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Key Audit Matters
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Auditor’s Response
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I. Determination of Cost of Production (COP) and Net Realizable Value (NRV) of Finished Goods and By-Products
for valuation of inventory:
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As on March 31, 2025, the Company
has inventory of finished goods, by¬
products and work in progress with a
carrying value of H69,949.90 Lakhs. The
inventory of finished goods viz. Sugar
and ethanol is valued at the lower of
COP and NRV, whereas the inventory of
by-products viz. molasses and bagasse
is valued at NRV/Derived NRV. We
considered the value of the inventory of
finished goods and by-products as a key
audit matter given the relative value of
inventory in the financial
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Principal Audit Procedures
We understood and tested the design and operating effectiveness of
controls as established by the management in determination of COP
and NRV/Derived NRV. We reviewed the cost records maintained by the
management and examined the documents maintained by the management
for computing the COP and NRV/ Derived NRV with reference to the
principles prescribed under Ind AS-2 on “Inventories”. We considered
various factors including the prevailing unit specific domestic selling price
of the products during and subsequent to the year end, yield of ethanol
from “B” Heavy Molasses, value of sugar sacrificed during the production
of “B” Heavy Molasses, prevailing selling price of “C” Heavy and “B” Heavy
Molasses, contracted selling price of the products in respect of contracted
sales (including exports contracts),
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Key Audit Matters
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Auditor’s Response
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statements and significant judgement
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Molasses Policy of State Government for determination of levy obligation
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involved in determination of COP and
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of molasses as prevailing as on the date of our audit and initiatives
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also the consideration of factors such as
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taken by the Government with respect to sugar industry as a whole, for
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minimum sale price, monthly quota, and
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determination of NRV/ Derived NRV of the products.
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fluctuation in domestic and international
selling prices in determination of NRV/
Derived NRV.
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Based on the above procedures performed, the management’s
determination of COP and NRV/ derived NRV of finished and by-products
as at year-end and the comparison of COP with NRV for the valuation of
inventory is considered to be reasonable.
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II. Recognition of Deferred tax assets
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Our audit procedures based on which we arrived at the conclusion
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and liabilities
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regarding reasonableness of the recognition of net deferred tax
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Recognition of deferred tax assets
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liabilities include the following:
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and liabilities is based on applicable
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• Evaluated the design and tested the effectiveness of key controls
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expected tax rates on the utilization
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implemented by the company over measurement and recognition of
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and/ or reversal thereof.
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deferred tax assets and liabilities.
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We considered recognition of DTL/
DTA as key audit matter given the
significant judgement involved in the
determination of year of its utilization/
reversal and applicable tax rate as the
tax law provides option of taxation
u/s 115BAA at reduced rates after
foregoing certain deductions/exemption
and outstanding MAT credit balance.
Further, the amendments made in the
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• Evaluation of the temporary differences and utilization/ reversal of
deferred tax assets and liabilities based on internal forecasts by the
management and resultant impact on future taxable income of the
Company as per tax laws substantially enacted as at March 31, 2025.
• The above includes critical review of underlying assumptions for
consistency and arriving at reasonable level of probability on the matters
with due regard to the current and past results and performances, as
required in terms of Ind AS 12 “Income Taxes” and principles in this
regard.
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tax laws by Finance (No. 2) Act, 2024 has
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• Review of management’s assumption with respect to profit in future
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resulted in revision in the measurement
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periods and taxability thereof by opting for taxation u/s 115BAA
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of tax base and tax rates of long term
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of Income Tax Act, 1961 from the next financial year and placing
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capital assets.
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reliance on such assumptions and projections given the current scale of
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As at March 31, 2025, the company has
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operations and prevailing conditions and situations.
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recognized net DTL of H5,091.54 Lakhs,
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• Evaluated the appropriateness of the disclosures made in the financial
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after concluding that it will be more
beneficial for the company to migrate to
the lower tax regime u/s 115BAA from
the next financial year.
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statements in respect of DTA and DTL.
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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
other information. The other information comprises the
information included in the Management Discussion and
Analysis, Board’s Report and Business Responsibility
& Sustainability report including Annexures to Board’s
Report and Corporate Governance and Shareholder’s
information, but does not include the financial statements
and our auditor’s report thereon.
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.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information,
we are required to report that fact. We have nothing to
report in this regard.
Responsibilities of Management and
Those Charged with Governance for the
Financial Statements
The Company’s 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(including other comprehensive income),
changes in equity and cash flows of the Company in
accordance with 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, thereof.
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 Board of Directors
is also 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
scepticism throughout the audit. We also:
Q 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.
Q Obtain an understanding of internal financial control
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.
Q Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the management.
Q 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.
Q 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 the Companies (Auditor’s Report)
Order, 2020 (“the Order”) issued by the Central
Government of India in terms of Section 143(11) of
the Act, we give in “Annexure A” a statement on the
matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
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 of the aforesaid financial statements;
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;
c) The balance sheet, the statement of profit and loss
including other comprehensive income, statement
of cash flow and the statement of changes in equity
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) relevant Rules, 2015, as
amended, thereof;
e) On the basis of the written representations
received from the directors as on March 31, 2025,
and 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 with reference to Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in “Annexure B”. Our report expresses an
unmodified opinion on the adequacy and operating
effectiveness of the Company’s internal financial
controls with reference to Financial Statements.
g) 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: we report that 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; and
h) 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 as at March 31, 2025, on its
financial position in its financial statements -
Refer Note 42 to 45 to the financial statements;
ii. The Company has made provisions, as
required under the applicable law or
accounting standards, for material foreseeable
losses, if any, on long term contracts including
derivatives contracts;
iii. There has been no delay in transferring
amounts required to be transferred to the
Investor Education and Protection Fund by
the Company during the year ended March
31, 2025;
iv. (a) The Management has represented to us
that, to the best of its knowledge and
belief, other than as disclosed in the
notes to the accounts, no funds(which
are material either individually or in
aggregate) 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 persons or entities, 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) The Management has represented to us
that, to the best of its knowledge and belief,
other than as disclosed in the notes to the
accounts, no funds ( which are material
either individually or in aggregate) have
been received by the company from any
person(s) or entities, 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 our audit procedure conducted
that have been considered reasonable and
appropriate in the circumstances, nothing
has come to our attention that has caused
us to believe that the representation
under sub- clause (i) and (ii) of Rule
11 (e) as provided under paragraph
(2) (h) (iv) (a) & (b) above, contain any
material misstatement.
v. The Company has not declared and paid
any dividend during the year. The Board of
Directors of the Company have proposed
final dividend for the year, which is subject to
the approval of the members at the ensuing
Annual General Meeting. The amount of
dividend proposed is in accordance with
Section 123 of the Act, as 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,
during the course of our audit we did not come
across any instance of audit trail feature being
tampered with. Additionally, the audit trail
has been preserved by the Company as per the
statutory requirements for record retention.
FOR MITTAL GUPTA & CO.
Chartered Accountants
FRN: 001874C
(Bihari Lal Gupta) -Partner
Date: 22.05.2025 Membership No. 073794
Place: Kanpur UDIN: 25073794BMOKVP8763
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