| We have audited the accompanying financial statements of SDF Industries
Limited ("the Company"), which comprise the Balance Sheet as at March
31,2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management's Responsibility forthe Financial Statements
The management of the company is responsible forthe preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards notified under the
Companies Act, 1956 (the Act) read with the General Circular 15/2013
dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
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.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b) in the case of the Statement of Profit and Loss of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows forthe
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order;
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary forthe purpose of our
audit.
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956, read with
general Circular 15/2013 dated, 13th September 2013 of Ministry of
Corporate Affairs in respect of section 133 of the Companies Act 2013
and
e) on the basis of written representations received from the directors
as on March 31,2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF
EVEN DATE ON THE FINANCIAL STATEMENTS OF THE SDF INDUSTRIES LIMITED FOR
THE YEAR ENDED 31 ST MARCH 2014
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As explained to us, the major items of the fixed assets have been
physically verified by the management in a phased periodical manner,
which in our opinion is reasonable having regard to the size of the
Company and the nature of its assets and that no material discrepancies
have been noticed on such verification.
(c) The Company has not disposed off a substantial part of fixed assets
during the year.
ii. (a) We are informed that the inventory have been physically
verified by the management at the end, the frequency of which in our
opinion is reasonable in regard to the size of the Company and the
nature of its business.
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and as
informed to us no discrepancies of material nature were noticed on
physical verification by the management.
iii. (a) The Company has not granted any loans, secured or unsecured,
to Companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly clauses 'b'
'c' and'd' of paragraph 4(iii) of the order is not applicable.
(e) The Company has taken unsecured loans from one party covered in the
register maintained under section 301 of the Act. The maximum amount
involved during the year and year end balance is Rs. 73,19,402/-.
(f) Since no terms and conditions have been prescribed in respect of
the said loans, we are unable to comment whether the rate of interest
and other terms and conditions are prejudicial to the interest of the
Company.
(g) Since no terms and conditions have been prescribed in respect of
the said loans, we are unable to comment upon the repayment of
principal and interest.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
v. (a) To the best of our knowledge and according to the information
and explanations given to us, we are of the opinion that the
particulars of contracts or arrangements that need to be entered in the
register maintained under the section 301 of the Companies Act, 1956
have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of rupees five lakhs entered during
the year, are at prices which are reasonable, having regard to the
prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year and hence the directives issued by the Reserve Bank of
India and the provisions of section 58A and 58AA or any other relevant
provisions of the Companies Act 1956 and the rules framed there under
are not applicable.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
viii. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed records are maintained. We have, however, not made a
detailed examination of the cost records with a view to determine
whether they are accurate or complete.
ix. (a) According to the records of the Company, the Company is
generally regular in depositing undisputed statutory dues including
Provident fund, Employees State Insurance, Investor Education and
Protection Fund, Income tax, and other material statutory dues with the
appropriate authorities during the period. According to the
explanations given to us there are no arrears of undisputed statutory
dues outstanding fora period of more than 6 months from the date on
which they became payable except for the dues mentioned below.
Name of the Nature of the Amount Period to which
Statute Dues (Rs.) amount relates
KGSTAct1963 Turnover tax 3,69,82,841/- 1997-98 to 2008-09
KVAT2003 Sales tax 2,86,876/- 2007-08 to 2009-10
(b) According to the information and explanations given to us and as
per our verification of the records of the Company, the following
disputed amounts of tax /duties have not been deposited with
appropriate authorities as at 31 st March 2014:
Name of Nature of Amount Period to which Forum where
Statute the Dues (Rs.) amount relates dispute is pending
ESI ACT ESI 46,35,480/- 2005-2010 The Employees'
Insurance Court,
Palakkad
x. The accumulated loss at the end of the financial year is more than
fifty percent of its net worth. The company has not incurred cash loss
as per statement of profit and loss for the current financial year as
well as in the immediately preceding year.
xi. As per the information furnished to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
debenture holders.
xii. The Company has not granted any loans or advances in the nature of
loans on the basis of security by way of pledge of shares, debentures
and other securities.
xiii. The Company is not a Chit fund/Nidhi/Mutual Benefit Fund/society
and hence the reporting requirement under Clause 4(xiii) of the Order
is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures or other investments, the relative reporting requirements
are not applicable.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi. According to the information and explanations given to us, and as
per the records verified by us, the Company has not availed any term
loans. Hence clause (xvi) of the order is not applicable.
xvii. According to the information and explanations given to us and as
per the records verified by us, the funds raised on short term basis
have not been used for long term investment.
xviii. Company has not made preferential allotment of shares to the
parties covered in the register maintained under section 301 of the
Companies Act, 1956, during the year.
xix. The Company has not issued any debentures during the year.
xx. The Company has not raised any money by public issue during the
year.
xxi. According to the information and explanation given to us, and as
per our verification of the records of the Company, no fraud either on
or by the Company has been noticed or reported during the year.
For Varma & Varma
Chartered Accountants
FRN:004532S
S. Raghunandan
Partner
Membership No.: 23592
Calicut
30.05.2014
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