Report on the standalone financial statements
We have audited the accompanying standalone financial statements of Sarda PlywoodIndustries Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement (in which are in-corporated the accounts of Companys branch at Delhi audited by other Auditors) anda summary of the significant accounting policies and other explanatory information for theyear then ended.
Managements responsibility for the standalone financial statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the
Act") with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014.
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 accountingrecordsrelevanttothepreparationandpresentationofthefinancialstatements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance withtheStandardsonAuditingspecifiedunder Section143(10) of the Act. Those standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement. An audit involves performing procedures toobtain audit evidence about the amounts and the disclosures in the financial statements.The procedures selected depend on the auditors judgment including the assessment ofthe risks of material misstatement of the financialstatements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the financial statements that give a trueand procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its loss and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act we report that:
i. 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.
ii. 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.
iii. The Balance Sheet the Statement of Profit and Loss and the Cash flow Statementdealt with by this Report are in agree -ment with the books of account. iv. In ouropinion the aforesaid standalone financial statements comply with the AccountingStandards specified under
Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. v. Onthe basis of the written representations received from the directors as at 31st March2016 and taken on record by the Board of Directors none of the directors is disqualifiedas at 31st March 2016 from being appointed as a director in terms of Section 164 (2) ofthe Act. vi. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". vii. With respect to the other mattersto be included in the Auditors Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: a. The Company has disclosed the impact ofpending litigations on its financial position in its financial statements Refer Note No.28.2 to the financial statements. b. The Company did not have any long-term contractsincluding derivatives contracts for which there were any material foreseeable losses. c.There is no amount outstanding in the Investor Education and Protection Fund.
"Annexure A" to the Auditors Report
Statement referred to in paragraph Report on Other Legal and RegulatoryRequirements of our report of even date to the members of Sarda Plywood IndustriesLimited on the standalone financial statements for the year ended 31st March 2016.
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) The fixed assets were physically verified during the year by the management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification. c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(ii) The inventories (excluding stocks with third parties) have been physicallyverified during the year by the management at reasonable intervals and no materialdiscrepancies were noticed on such physical verification.
(iii) The Company has not granted any loan secured or unsecured to companies firmsand limited liability partnerships or other parties covered in the register maintainedunder section 189 of the Act. Therefore clauses (iii) (a) (b) and (c) of paragraph 3 ofthe said order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to usthere are no guarantees and securities granted in respect of which provisions of Section185 and 186 of the Companies Act 2013 are applicable. Based on our audit proceduresperformed and according to information and explanations given by the management theCompany has complied with provisions of Section 186 of the Act in respect of loans grantedand investments.
(v) The Company has not accepted any deposit within the meaning of section 73 to 76 orany other relevant provisions of the Act and the rules framed there under. The directivesissued by the Reserve Bank of India are not applicable to the Company.
(vi) As per the information and explanations given to us by the management maintenanceof cost records prescribed by the Central Government under sub-section (1) of section 148of the Act is not applicable to the Company.
(vii) a) On the basis of our examination the Company is regular in depositingundisputed statutory dues including provident fund employees state insuranceincome tax sales tax service tax duty of customs duty of excise value added tax cessand other statutory dues to the extent applicable with appropriate authorities and noundisputed amounts payable in respect of the aforesaid dues were outstanding as at 31stMarch 2016 for a period of more than six months from the date of becoming payable. b) Thedisputed statutory dues aggregating to Rs 844.37 Lakhs that have not been deposited onaccount of matters pending before appropriate authorities are as under: -
|Sl. No. ||Name of the statute ||Nature of dues ||Amount (Rs) ||Period to which the amount relate ||Forum where the dispute is pending |
|1. ||Delhi Sales Tax Act 1975 ||Sales Tax ||7786548 ||1990-91 ||Addl. Commissioner of Sales Tax |
|2. ||Central Sales Tax Act 1956 ||Sales Tax ||4751800 ||1990-91 ||Addl. Commissioner of Sales Tax |
|3. ||Central Excise Act 1944 ||Excise Duty ||2071205 ||20011- 12 ||Under Appeal Commissioner Rajkot |
|4. ||Central Excise Act 1944 ||Service Tax ||1446353 ||July12 to Sept13 ||Under Appeal Custom Excise & Service Tax Appellate Tribunal |
|5. ||Income Tax Act 1961 ||Income Tax ||87429 ||1985-86 ||Income Tax Appellate Tribunal |
|6. ||Central Excise Act 1944 ||Excise Duty ||68293531 ||April 10 to Feb15 ||Asst. Commissioner of Central Excise. |
| ||TOTAL || ||84436866 || || |
(viii) The Company has not defaulted in repayment of loans or borrowings to financialinstitutions or banks or Government.
The Company has not issued any debentures.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. On the basis of our examinationand according to the information and explanations given to us money raised by way of termloans have been applied for the purpose for which the loans were obtained.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Therefore clause (xii) ofparagraph 3 of the said order are not applicable to the Company.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards. (xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly clause (xv) ofparagraph 3 of the said order is not applicable to the Company.
(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India
Act 1934 are not applicable to the Company.
"Annexure B" to the Independent Auditors Report of Even Date on theStandalone Financial Statements of Sarda Plywood Industries Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SardaPlywood Industries Limited ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Managements Responsibility for Internal Financial Controls
The Companys 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 Companys policies the safeguardingof its 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 CompaniesAct 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting were established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness ex -ists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the
Company; and (3) provide reasonable assurance regarding prevention or timely detectionof unauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections ofanyevaluationoftheinternalfinancialcontrolsoverfinancialreporting tofuture periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial st March 2016 reportingwereoperatingeffectively as at based on theinternal control over financialreporting 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 ICAI.
| ||For G.P. Agrawal & Co. |
| ||Chartered Accountants |
| ||Firm's Registration No. - 302082E |
| ||(CA. Rakesh Kumar Singh) |
|Place of Signature: Kolkata ||Partner |
|Date: 25th May 2016 ||Membership No. 066421 |