SDF Industries Ltd Management Discussions.

1. Industry Structure & Developments: Liquor is a state subject and the respective State Government sets all the control parameters of this trade. Our Companys present business is restricted to IMFL. All the domestic market business is routed through Kerala State Beverages (M&M) Corporation Ltd., a State Govt, enterprise.

2. Opportunities & Threats: The Alcohol Industry falls within the domain of the industries for which licence is not available easily. But it is also heavily dependent on the government policies.

3. Risks & Concerns : Any change in the Govt, policy has a bearing on the industry. The liquor market is also highly competitive.

4. General:

a) Internal Control - The Company has a system of Internal control to ensure that all its assets are properly safeguarded. Besides, the company has also appointed internal auditors. The Company also has an Audit Committee of the Board of Directors which meets regularly to review various aspects of the companys policies and management.

b) Human Resources - Considering the financial position of the Company, the number of employees are kept at the minimum and the Company makes optimum use of its employees. All the Bottling works are carried out by contract workers as it being seasonal and depend heavily on short term government policies.

On behalf ofthe Board
Palakkad K.V. Viswamohan Menon
08.08.2017 Chairman &Whole time Director
(DIN: 00666339)



The Members of SDF Industries Limited Palakkad

We have examined the compliance of conditions of Corporate Governance by SDF Industries Limited ("the Company") for the year ended 31 st March 2017, as per Regulations 17 to 27, clauses (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit noran expression of opinion on the financial statements of the Company.

We conducted our examination in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Service Engagements. In our opinion and to the best of our information and according to the explanations given to us and based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as specified in Regulations 17 to 27, clauses (b) to (i) of Regulation 46 (2), and paragraphs C. D and E of Schedule V of the Listing Regulations as applicable.

We further ste-e that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Varma & Varma
Chartered Accountants
FRN No. 004532S
S. Raghunandan
Kozhikode Partner
8.08.2017 Membership No. 23592