sdf industries ltd Auditors report

TO THE MEMBERS OF SDF INDUSTRIES LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of SDF Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, 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 significant accounting policies and other explanatory information (hereinafter referred to as "the standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, 2023, the loss 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 standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS 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 standalone Ind AS 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 ICAIs 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 standalone Ind AS financial statements.

Material uncertainty Related to Going Concern

We draw attention to the statement of profit and loss account which shows that the company has incurred net loss of Rs.1.70 crs during the year 2022-23 and has negative net worth of Rs.1.87 crs. Further, the company financial position shows that there is a continuous operating loss, decline in turnover, negative working capital of Rs.6.65 crs, disposal of fixed assets, and other operational difficulties. These conditions along with other matters reported in this report indicate the existence of material uncertainty that may cast significant doubts on the companys ability continue as a going concern in accordance with SA 570 (Revised) of ICAI.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS 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 that the matters described below to be the key audit matters to be communicated in our report.

S.No	Key Audit Matters	Auditors Response
1	Non-Payment of Reinstatement fees to BSE Ltd. (Trading suspended since 3 rd February 2003)	We obtained the documents sent by BSE Ltd with regard to the matter reported to ensure appropriate audit evidence.
	(a)The company has received Show Cause Notice for payment of reinstatement fees to avoid compulsory delisting of shares and the Initial Public Notice (IPN) has been given in the newspapers by BSE.	The estimated liability towards the reinstatement fees has not been provided for in the books.
	(b)The consequence of delisting as per Regulation 23 of the SEBI (Delisting of Equity Shares) Regulations, 2009 is the that the promoters of the company shall acquire the delisted equity shares from public shareholders by paying them the value determined by the valuer within three months of date of delisting from the recognized stock exchange, subject to option of retaining their shares.
	(c) Further, as per Regulation 24 , companys whole time directors, its promoters and companies which are promoted by any of them shall not directly or indirectly access the securities market or seek listing for any equity shares for a period of ten years from the date of such delisting.The promoters and whole time directors of the delisted company shall also not be eligible to become directors of any listing company.
2	Non-payment of BSE listing fees
	The company has not paid the listing fees amounting to Rs. 6 lacs for the financial years 21- 22 and 22-23.	We obtained the documents sent by BSE Ltd with regard to the matter reported to ensure appropriate the audit evidence.
		Provision for listing fees has been made in the books of accounts.
3	Non-payment of excise establishment dues
	The dues towards excise establishment as on 31st March 2023 was Rs.26.50 lacs, being arrears for 6 months. Though High Court order is obtained for instalments covering only the past dues, further non-payment of dues will lead to withdrawal of excise officials from the factory, resulting in stoppage of production.	The company has received order from Honble High Court of Kerala dated 30th day of March 2023 ( WP(C ) No.11187 of 2023) for payment of excise establishment dues as of March 2023 in instalments of Rs.6 lacs each on the first week of every succeeding month.
		Provision has been made in the books of accounts.
4	Internal Control System
	The internal control systems over financial reporting, which were in existence in the previous years, need to be improved, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For this, the company should have an Internal Audit System within the company or Internal Audit by external team as required by section 138 of the Companies Act, 2013.	We obtained the audit documents available with the company as on the date of report to ensure appropriate audit evidence.

Emphasis of Matters

We draw attention to the following matters in the Notes to the Ind AS financial statements

(i) Note No. 31 to the Ind AS financial statements which states that no provision has been made in the accounts towards interest payable on turnover tax liability of Rs.3,75,14,634/- relating to earlier years, for the reasons stated therein. As per the workings provided by the Management, interest on Turnover Tax (TOT) for the period 2005-06 to 2009-10 comes around Rs. 3.02 Crs. As a result, net loss has been understated to the extent of Rs.3.02 Crs as also the net worth of the company.

(ii) Note No. 27 to the Ind AS financial statements ‘Claims against the company not acknowledged as debt in respect of legal suits for Rs.1.97,87,325/- filed before various authorities, the outcome of which is uncertain.

(iii) The balance in trade receivables and trade payables as on the date of report are subject to confirmation from the parties.

(iv) The company has received show cause notice dated 15th February 2023 from Reserve Bank of India, Kochi in respect of non-realisation of export proceeds in respect of some of the export sales made in the previous financial years. Our opinion is not modified in respect of the above matters.

Information Other than the Standalone Ind AS Financial Statements and Auditors Report

Thereon

The Companys Board of Directors is responsible for the preparation of the other information.

The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Corporate Governance and Shareholders Information, but does not include the standalone Ind AS financial statements and our auditors report thereon.

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

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS 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.

Managements Responsibility for the Standalone Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS 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. 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Companys 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 are responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 standalone Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

? Identify and assess the risks of material misstatement of the standalone Ind AS 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone Ind AS 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 auditors 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 standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone Ind AS 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 standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors 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 (Auditors Report) Order, 2020 ("the Order") issued by the Central Government 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.

b) In our opinion, proper books of accounts as required by the Companies Act,2013(including relevant Rules under the Companies Act,2013 as amended) 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 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 standalone Ind AS financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditors 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 an 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, read with Schedule V of the Companies Act, 2013.

h) With respect to the other matters to be included in the Auditors 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 Ind AS standalone financial statements. (Refer Note.27 (Contingent Liabilities) to the standalone financial statements.

ii. The Company did not have any long-term contract including derivative contracts and hence, the provision for material foreseeable losses does not arise. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that , to the best of its knowledge and belief, 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 person or entity, including foreign entity ("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 that, to the best of its knowledge and belief, no funds (which are material either individually or in aggregate) have been received by the Company from any person or including foreign entity("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 the audit procedures performed and explanation received, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement

v. Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

	for GGA & ASSOCIATES
	Chartered Accountants
	F.R.No. 009663S
	B.Giridharan
Place: Coimbatore	Partner
Date: 30-05-2023	Membership No. 208590
	UDIN: 23208590BGUZMT6332

ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT (REQUIREMENTS UNDER COMPANIES (AUDITORS REPORT) ORDER 2020)

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of SDF Industries Limited of even date)

i. In respect of the Companys fixed assets:

a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

b) The Company has a system of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The title deeds of all the immovable properties (other than properties where the Company is the lessee, and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company.

d) The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible assets during the year ended March 31, 2023.

e) According to the information and explanations provided to us, there are no proceedings initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the coverage and the procedure of such verification by the Management is appropriate. Discrepancies of 10% or more in aggregate for each class of inventory were not noticed on such physical verification.

(b) The working capital limits on the basis of security of current assets is below five crores. Hence, reporting under clause (3(ii)(b) is not applicable to the Company. Further, the company has closed its working capital limits during the year. iii. The Company has not granted any loans or advances in the nature of loans to companies, firms, limited liability partnerships or other parties. Accordingly, the requirement to report on clause 3(iii) is not applicable to the Company.

iv. The company has not made any investment or granted any loans or given any security or given any guarantee for which the provisions of sections 185 and 186 of the Companies Act, 2013 are applicable

v. The Company has not accepted any deposits with the meaning of Rule 2(c) Companies (Acceptance of Rules)2014 from the public and hence, the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under are not applicable. However, the Company has accepted trade deposits which are exempted deposits in terms of the above rule.

vi. The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus, reporting under clause 3(vi) of the order is not applicable to the Company.

vii. According to the information and explanations given to us, in respect of statutory dues: a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2023 for a period of more than six months from the date they became payable except the followings:

Nature dues	Nature of statue	Period to which the amount relates	Amount (in Rs.)
Turnover Tax	KGST Act 1963	2001-02, 2002-03& 2005- 06 to2009-10	3,75,14,634.00
Central Sales Tax	CST Act 1956	2010-11	2,59,443.00

c) Details of dues of Sales Tax (VAT) and Excise Duty which have not been deposited as at March 31, 2023 on account of dispute are given below:

Nature dues	Nature of statue	Period to which the amount relates	Amount (in Rs.)	Forum where dispute is pending
Sales Tax	KVAT Act 2003	2010-2013	35,23,783.00	High court of Kerala
Sales Tax	KVAT Act 2003	2011-18	65,93,199.00	Sales Tax Appellate Tribunal, Kozhikode.
Sales Tax	KVAT Act 2003	2005-2010	46,36,083.00	High court of Kerala
Abkari	Abkari Act 1967	2007-2020	48,00,000.00	High court of Kerala
Calibration	Legal Metrology Act 2009	2021-2022	2,34,260.00	High court of Kerala
		Total	1,97,87,325

viii. According to the information and explanations provided to us, the Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Hence, the requirement to report on clause 3(viii) of the Order is not applicable.

ix. According to the information and explanations provided to us and based on our examination of records of the Company

(a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or any lender.

(c) Term loans availed were closed during the year.

(d) No funds raised on short-term basis have been used for long term purposes by the Company.

(e) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

x. (a)The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and hence reporting under clause 3 (x) of the Order is not applicable to the Company. (b)During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (x)(b) of the Order is not applicable to the Company. xi. (a)No fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(b) No report under section 143(12) of the Act has been filed in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules,2014 with the Central Government during the year and up to the date of this report.

(c) As represented to us by the Management, there are no whistle blower complaints received by the company during the year.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in Note No. 30 to the Ind AS standalone financial statements as required by the applicable accounting standards.

xiv. The Company does not have an Internal Audit System commensurate with the size and nature of business. The company should have a Internal Audit System within the company or Internal Audit by external auditors as required by section 138 of the Companies Act,2013.

xv. In our opinion and according to the information and explanations given to us, the Company has not entered during the year any non-cash transactions with its directors or persons connected to its directors and hence, the requirement to report on clause 3(xv) of the Order is not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under Clause (xvi)(a), (b) and (c) of the Order is not applicable.

The Company is not a Core Investment Company. Hence, the requirement to report on clause 3(xvi) (d) of the Order is not applicable to the Company.

xvii. The Company has incurred cash losses during the year ended March 31,2023 and in the immediately preceding financial year. The details of cash losses are reported below.

S.No	Financial year	Cash losses ( Rs in lacs)
1	2022-23	148.22
2	2021-22	149.41

xviii. There has been no resignation of the statutory auditors during the year and hence, requirement to report under clause 3(xviii) is not applicable to the Company.

xix. On the basis of the financial ratios disclosed in the financial statements, ageing and expected dates of realisation of the financial assets and payment of financial liabilities, other information accompanying financial statements, our knowledge of Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, we are of the opinion that there is material uncertainty exists as on the date of audit report as to the meeting of liabilities of the Company existing as at the date of balance sheet as and when they fall due within a period of one year from the date of balance sheet. We further state our reporting is based on facts up to the date of audit report.

xx. The provisions of Section 135(5) of the Companies Act ,1956 are not applicable to the

Company and hence, reporting requirement on clause 3(xx)(a) and (b) is not applicable to the Company.

	For GGA & ASSOCIATES
	Chartered Accountants
	F.R.No. 009663S
	B.Giridharan
Place: Coimbatore	Partner
Date:30-05-2023	Membership No. 208590
	UDIN: 23208590BGUZMT6332

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of SDF Industries Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SDF INDUSTRIES LIMITED ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has to improve its internal financial controls system over financial reporting in all aspects, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	for GGA & ASSOCIATES
	Chartered Accountants
	F.R.No. 009663S
	B.Giridharan
Place: Coimbatore	Partner
	Membership No. 208590
Date: 30-05-2023
	UDIN: 23208590BGUZMT6332