Sudar Industries Ltd Auditor Reports

To the members of

SUDAR INDUSTRIES LIMITED

We have audited the attached Balance Sheet of Sudar Industries Limited as at 31 st March 2014, the Profit and Loss Account and also the Cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

MANAGEMENT’S RESPONSIBILITY:

Management is responsible for the 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 the Companies Act,1956(the Act) read with General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013 and accordance with the accounting principles generally accepted in India. 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.

AUDITOR’S RESPONSIBILITY:

Our responsibility is to express an opinion on these financial statements based on our audit. We conduct our audit in accordance with 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 financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedure selected depends on auditor’s judgment, including the assessment of the risk of material misstatement of the financial statement, 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 accountingestimates made by the management, as well as evaluating used and the reasonableness of the the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION:

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view in conformity with the accounting principles generally accepted in India:

i) In so far as it relates to the Balance Sheet, of the state of affairs of the company as at 31 st March 2014;

ii) In so far as it relates to the Profit & Loss Account, the profit of the company for the year ended on that date; and

iii) In so far as it relates to the cash flow statement, of the cash flow of the company for the year ended on that date.

REPORT ON OTHER LEGAL & REGULATION REQUIREMENTS:

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account, as required by the law, have been kept by the company, so far as appears from our examination of those books.

c) The Balance Sheet, the Profit & Loss Account and the cash flow statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Profit & Loss Account and the cash flow statement comply with Accounting Standards notified under 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.

e) In our opinion, and based on information and explanation given to us, none of the Directors are disqualified as on 31st March 2014 from being appointed as Directors in term of section 274(1)(g) of The Companies Act, 1956.

FOR MUKESH MEHTA & ASSOCIATES	FOR SURESH HEGDE & CO.
Chartered Accountants	Chartered Accountants
CA MUKESH MEHTA	CA SURESH HEGDE
Membership No. 100407	Membership No. 118493
FRN: 116309W	FRN: 125795W
Place: Mumbai
Date: May 28, 2014

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF THE AUDITORS REPORT ON THE ACCOUNTS OF SUDAR INDUSTRIES LIMITED FOR THE YEAR ENDING 31ST MARCH, 2014

As required by the Companies (Auditors report) Order, 2003 issued by the Central Government of India in terms of section 227(4 -A) of the Companies Act, 1956, we report that:

1 In respect of fixed assets:

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have been physically verified by the management during the year at reasonable intervals, which in our opinion, is reasonable having regard to the size of the company and the nature of assets. No material discrepancies were noticed verification.

(c) In our opinion thesubstantial/major Company part of fixed assets during the year and hasnot disposed off any the going concern status of the company is not affected.

2 In respect of its inventories:

(a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company has maintained proper records of inventory, and there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3 In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956:

(a) The company has not granted any Loans during the year. However, the Company has received loans of Rs. 333.87 Lacs from directors and the outstanding balance of the said loans is Rs. 394.77 Lacs. The company has also taken Inter Corporate Deposits from three parties amounting to Rs. 514.47 Lacs during the year and the year-end balance is Rs. 1,166.36 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and the other terms and conditions is not prima -facie prejudicial to the interest of the company.

(c) In respect of loans taken and granted by the company, the interest payment & receipt is regular and the principal amount is repayable on demand.

(d) Since the loans taken and granted by the company are repayable on demand, no question of overdue amounts arises.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of inventory and fixed assets and with regard for the sale of goods and services. During the course of audit, no major weakness has been noticed in the internal control.

5 In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(a) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements that needed to be entered in the register maintained under section 301 of the Companies Act 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements, which need to be entered in the registers maintained under section 301 of the Act, have been so entered. Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prevalent market price at the relevant time.

6 Based on our audit procedures and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence complying with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under is not applicable.

7 In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

8 We have broadly reviewed the books of account and records maintained by the company relating to the manufacture of Shirts, Trousers and others 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 thatprima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9 In respect of statutory dues:

(a) According to the information and explanations given to us, the company was generally regular in depositing undisputed statutory dues to the concerned authorities in respect of Employees Provident Fund, Employees State Insurance Fund, wealth tax, service tax, custom duty, excise duty and material statutory dues. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding for a period of more than six months from the date of becoming payable except the income tax liability for the financial year ended on 31st March, 2013

(b) According to the records examined by us and the information and explanations given to us, there are no disputed amounts due in respect of income tax, wealth tax, sales tax, excise duty, Employees provident fund, Employee state insurance fund and other statutory dues at the end of the year.

10 The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during current and the immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given by the management, the Company has not defaulted in the repayment of dues to banks and financial institutions.

12 In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other security.

13 In our opinion the company is not a Chit Fund, Nidhi or Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not applicable to the company..

14 The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable.

15 The Company has not given Guarantees for the loan taken by others from banks or financial institutions.

16 The Company has not raised any term loans during the year.

17 According to the information and explanations given to us and on examination of balance sheet, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18 The company has not made any preferential allotment of shares to parties and companies covered under register maintained under Section 301 of the Companies Act, 1956, during the year.

19 Clause 13 of the order is not applicable, as the company has not issued any debentures during the year. Clause 13 of the order is not applicable, as the company has not issued any debentures during the year.

20 The Company has not raised money by public issue during the year.

21 In our opinion and according to the information and explanations given to us no fraud on or by the Company have been noticed or reported during the year that causes the financial statements to be materially misstated.

For Mukesh Mehta & Associates	For Suresh Hegde and Co.
Chartered Accountants	Chartered Accountants
CA Mukesh Mehta	CA Suresh Hegde
Membership No. 100407	Membership No. 118493
FRN: 116309W	FRN: 125795W
Place: Mumbai
Date: May 28, 2014