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Sudal Industries Ltd.

BSE: 506003 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE618D01015
BSE 14:20 | 07 Jul 9.00 -0.30
(-3.23%)
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9.75

HIGH

9.75

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9.00

NSE 05:30 | 01 Jan Sudal Industries Ltd
OPEN 9.75
PREVIOUS CLOSE 9.30
VOLUME 2
52-Week high 9.75
52-Week low 8.80
P/E
Mkt Cap.(Rs cr) 7
Buy Price 8.84
Buy Qty 1.00
Sell Price 9.00
Sell Qty 499.00
OPEN 9.75
CLOSE 9.30
VOLUME 2
52-Week high 9.75
52-Week low 8.80
P/E
Mkt Cap.(Rs cr) 7
Buy Price 8.84
Buy Qty 1.00
Sell Price 9.00
Sell Qty 499.00

Sudal Industries Ltd. (SUDALINDUSTRIES) - Auditors Report

Company auditors report

To The Members of Sudal Industries Limited

Opinion

Report on the Audit of Financial Statements

We have audited the accompanying financial statements of Sudal Industries Limited("the Company") which comprises of Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flow for the year than ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2019 its loss other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Material Uncertainty Related to Going Concern:

Without qualifying we draw attention to note no. 30 to the financial statements of theCompany having been prepared on a going concern basis which contemplates the realizationof assets and satisfaction of liabilities in the normal course of business. The Companyhas been continuously incurring losses over last several years and its net-worth standsfully eroded. These conditions indicate the existence of uncertainty that may cast doubtabout the Company's ability to continue as a going concern. The Banker has also issuednotice under section 13(2) of SARFASIE Act for recovery of its dues.

As explained by the management the losses were incurred due to a recessionary trendand slackness in demand particularly in the Auto construction and Infra industries andtherefore the Company was not able to utilize its capacity optimally. Besides there washigh volatility in Aluminum prices it was incurring losses in the past few years. Toboost these industries several revival steps are being taken by the Government and hencethe Company expects a spur in economy and demand which will enable them to increase theircapacity utilization and thereby cut losses.

Accordingly management believes that it is appropriate to prepare the financialstatements on a going concern basis. Therefore the financial statements do not includeany adjustments relating to the recoverability and classification of recorded assets andto the amounts of liabilities that might be necessary should the Company be unable tocontinue its operations as a going concern

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Sr. No Key Audit Matters Auditor's response
1 REPOSSESSION OF LEASE HOLD LAND AT DHULE ALLOTED BY MIDC DHULE IN 2011-12(carrying value Rs 387.54 Lakhs) Principal Audit Procedures
Lease Hold Land allotted to the Company in 2011 by MIDC Dhule has been re-possessed for not setting up the projects within stipulated time and have issued refund order. The Company has filed a writ petition before Aurangabad bench of Mumbai High Court for stay order against alleged re-possession. The Matter is pending for admission. We have examined the relevant copy of petition along with the order relating to re- possession and refund order issued by MIDC authority.
We have discussed the status of possibility of obtaining stay and reversing of repossession order with the legal opinion and management's view on reversal of re-possession order.
Based on above we have accepted management's representation that presently no loss provision against such repossession is necessary.

Information Other than the Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board report andShareholder's information but does not include the financial statement and our auditor'sreport thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance (including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Account) Rules2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the Management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so(Refer note 30)

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial control system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of Management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the entity'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the entity to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of a reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factors (i) in planning the scope of our audit work and inevaluating the results of our work and (ii) to evaluate the effect of and identifiedmisstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. Pursuant to the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) 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.

(b) 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 and records.

(c) The Balance sheet the Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Account) Rules 2014.

(e) On the basis of the written representation received from the directors as on March31 2019 taken on records by the Board of Directors none of the directors aredisqualified as on March 31 2019 from being appointed as a Directors in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure "B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance 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 explanationsgiven to us the Company has paid/provided for the managerial remuneration in accordancewith the requisite approval mandated by the provision of Section 197 with schedule V tothe Act.

(h) With respect to the matters to be included in the Auditor's report in accordancewith the rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and tothe best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements. [Refer Note No. 29]

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.

For Bagaria & Co. LLP
Chartered Accountants
Firm Registration No:
113447W/W-100019
Vinay Somani
Place : Mumbai Partner
Date : 30th May 2019 Membership No: 143503

Annexure "A" referred to in "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Sudal Industries Limited ofeven date:

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) According to the information and explanations given to us the fixed assets havebeen physically verified by the management in a phased periodical manner which in ouropinion is reasonable considering the size of the Company and nature of its fixed assets.As explained no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company title deeds of the immovable property are heldin the name of the Company except Lease Hold land at Dhule. (Refer Note No 33)

ii) According to the information and explanations given to us the inventories havebeen physically verified during the year by the management at reasonable intervals and nomaterial discrepancies were noticed on such verification.

iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited Liability Partnershipscovered in the register maintained under section 189 of the Act. Accordingly theprovisions of clause 3(iii) of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us theCompany has not entered into any transactions referred in section 185 of the Act. TheCompany has complied with the provisions of 186 of the Act with respect to the loans andinvestments made.

v) No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and rules framedthereunder have been accepted by the Company.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government of India regarding the maintenance of costrecords under sub-section (1) of Section 148 of the Act and are of the opinion that primafacie the prescribed accounts and records have been maintained. We have however notmade a detailed examination of the records with a view to determine whether they areaccurate or complete.

vii) a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is regular in depositing undisputed statutorydues including Provident Fund Employees' State Insurance Income Tax Sales Tax ServiceTax Duty of Customs Duty of Excise Value Added Tax Cess Goods and Service taxes andother material statutory dues applicable to the Company with the appropriate authorities.No undisputed amounts in respect of the aforesaid statutory dues were outstanding as atthe last day of the financial year for a period of more than six months from the date theybecame payable.

b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of Income Tax Sales TaxService tax Duty of Customs Duty of Excise and Value Add Tax which have not beendeposited on account of any dispute except the following

Assessment Year Nature of Dues Amount (Rs in Lakhs) Forum where the dispute Is pending
2013-2014 Income Tax 133.03 Tribunal
2014-2015 Income Tax 22.31 Tribunal

viii) In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of principal amount of Rs. 3304.31 Lakhs and interestamount of Rs 3030.52 Lakhs for the period from Septmber2014 to March 2019 to bankers.Further during the year the Company has not taken any loans or borrowings from afinancial institution or issued any debenture.

ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year or in the recent past or has nottaken term loans and hence the provision FO Para 3(ix) of the Order is not applicable.

x) According to the information and explanation given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

xi) According to the information and explanations given to us and based on theexamination of the records the Company has paid/provided for the managerial remunerationin accordance with the requisite approvals mandated by the provision of Section 197 readwith Schedule V to the Act.

xii) The provisions of Nidhi Company are not applicable to the Company. Therefore Para3 (xii) of the Order is not applicable to the Company.

xiii) According to the information and explanations given to us the provisions ofSection 177 and 188 of Act to the extent applicable in respect of transactions with therelated parties have been complied by the Company and the details have been disclosed inthe Ind AS Financial Statements as required by the applicable accounting standards in NoteNo. 42 to the Ind AS Financial Statements.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore Para 3 (xiv) ofthe Order is not applicable to the Company.

xv) According to the information and explanations given to us during the year theCompany has not entered into any non-cash transactions with directors or persons connectedwith him under Section 192 of the Act.

xvi) The Company is not required to be registered under Section 45 IA of the ReserveBank of India Act 1934.

For Bagaria & Co. LLP
Chartered Accountants
Firm Registration No:
113447W/W-100019
Vinay Somani
Place : Mumbai Partner
Date : 30th May 2019 Membership No: 143503

Annexure "B" referred to in "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Sudal Industries Limited ofeven date:

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of SudalIndustries Limited "the Company") as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential component of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued 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 company's policies the safeguarding ofits 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 Act.

Auditors' Responsibility

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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 accounting principles and that receipts andexpenditures of the entity are being made only in accordance with authorizations ofmanagement; and (3) provide reasonable assurance regarding prevention or timely detectionof un-authorized acquisition use or disposition of the entity'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 of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the best of our information and according to the explanations given tous the Company has broadly in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential Component of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Bagaria & Co. LLP
Chartered Accountants
Firm Registration No:
113447W/W-100019
Vinay Somani
Place : Mumbai Partner
Date : 30th May 2019 Membership No: 143503