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Suraj Industries Ltd.

BSE: 526211 Sector: Industrials
NSE: N.A. ISIN Code: INE170U01011
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Suraj Industries Ltd. (SURAJINDS) - Auditors Report

Company auditors report

To the Members of Suraj Industries Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Suraj Industries Limited ("theCompany") which comprise the Balance Sheet as at March 312016 Statement of Profit& Loss and Cash Flow Statement for the year ended on that date and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The company’s Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements to give a true and fair view of the financial positionfinancial performance and cash flow of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgment and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken in to account the provisions of the Act and the Rules made thereunderincluding the Accounting Standards and matters which are required to be included in theaudit report. We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act and other applicable authoritative announcementissued by the Institute of Chartered Accountants of India. Those Standards andpronouncements require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the company has in place an adequate internal financialcontrol system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements.

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

Basis for Qualified Audit Opinion

1. Attention is drawn to note no 1(a) and Note 14 of the Balance sheet to the effectthat these accounts have been prepared without following the going concern assumption onthe closure & cessation of the two business segments by the company and disposal ofmajor assets of these discontinued segments in preceding years.

2. Company has a sum of Rs 6.38 lacs as recoverable advances on account of sales taxand income tax refunds which in view of long time lag in our opinion are not realizableand should have been written off. Therefore the Loss of the year and current assets areshown more by Rs 6.38 lacs and deficit in Statement of profit & loss account is shownless to that extent.

Opinion

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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

a) in the case of the Balance Sheet of the state of affairs of the Company as at March312016;

b) in the case of the Statement of Profit & Loss of the Loss for the year ended onthat date; and

c) in case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act and on the basis of such checks of the books and records of theCompany as we consider appropriate and according to the information and explanations givento us we enclose in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the said order.

2. As required by section 143(3) of the Act we report that: (a) We have obtained allthe information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit & Loss and Cash Flow statementdealt with by this report are in agreement with the books of accounts;

(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion the Balance Sheet the Statement of Profit and Loss and theCash Flow statement comply with the Accounting Standards specified in Section 133 of theAct; read with Rule 7 of the Companies (Accounts) Rules 2014.

(e) On the basis of written representation received from the Directors as on March 312016 and taken on record by the Board of Directors we report that none of the Directorsis disqualified as on March 312016 from being appointed as a Director in terms of section164(2) of the Act.

(f) With respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure B’; and

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us-

(i) The Company has disclosed the impact of pending litigations as at March 312016 onits financial position in its financial statements.

(ii) The Company has made provision as at March 31 2016 as required under theapplicable law or accounting standards for material foreseeable losses if any on longterm contracts including derivative contracts.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March312016.

For Satendra Rawat & Co Chartered Accountants

FRN- 008298C

(CA. Satendra Rawat)

Partner

Membership No. - 074126

Date: 30.05.2016

Place: New Delhi

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date for the year ended March 312016)

1. a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b) During the year Fixed assets of the Company have been physically verified by themanagement which in our opinion is reasonable having regard to the size of the companyand the nature of its fixed assets. As mentioned to us no material discrepancies werenoticed by the management 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 the company does own any immoveable property.

2. Since there is no inventory as at the end of the year with the company hence clauserelating to physical verification and maintaining of proper records of inventory is notapplicable for the year.

3. The company has not granted any loan secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

5) The Company has not accepted any deposits from the public within the meaning ofSections 73 and 74 of the Act and the rules framed there under to the extent notified.

6) Pursuant to the rules made by the Central Government- for the maintenance of costrecords in respect of the Vanaspati segment under section 148 of the Act. We are of theopinion that prima facie the prescribed accounts and records relating to materialslabour and other items of cost was not required to be maintained for the year as therewas no manufacturing activity for the year under review.

7) a According to the information and explanations given to us and the records of theCompany examined by us we are of the opinion that the Company is regular in depositingthe undisputed statutory dues including Investor Education Protection FundEmployees’ State Insurance Income Tax Sales Tax VAT Wealth Tax Service TaxCustom Duty Excise Duty Cess and other statutory dues applicable to it.

b) According to the records of the company and information and explanations given tous there are no dues of Sales Tax Income Tax Custom Duty Service Tax Wealth TaxExcise Duty and Cess on account of any dispute.

8. According to the records of the Company examined by us and the information given tous we are of the opinion that the company has not defaulted in repayment of dues tobanks. However there are no dues payable to financial institutions or debenture holders.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanation provided to us we have neither come acrossany instance of material fraud on or by the company noticed or reported during the yearnor have been informed of any such case by the management.

11. The Company has not paid any managerial remuneration during the year. Hence theclause is not applicable.

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company has not entered into any transactions with therelated parties as specified in sections 177 and 188 of the Act.

14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. 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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16. According to the information and explanations given to us and on the basis of ourexamination of records of the Company the Company is not required to be registered withReserve Bank of India u/s 45-IA of the Reserve Bank of India Act 1934.

For Satendra Rawat & Co

Chartered Accountants

FRN- 008298C

(CA. Satendra Rawat)

Partner

Membership No. - 074126

Date: 30.05.2016

Place: New Delhi

Annexure - B to the independent Auditor’s Report Report on the Internal FinancialControls under clause (i) of Sub-section 3 of section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financial reporting of SurajIndustries Limited ("the company") as of March 31 2016 in conjunction with ouraudit of financial statements of the company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The company’s 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 company’s 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 Companies Act 2013.

Auditor’s 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and 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 procedure 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 exits and testing and evaluating the designand operating effectiveness of internal control based on assessed risk. The procedureselected depends on the auditor’s judgement including the assessment of the risk ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we obtained is sufficient and appropriate to providethe 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 controls over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial controlsover financial reporting includes those policies and procedures that (1) pertain tomaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the asset of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatement in accordance with generally accepted accounting principles and that receiptsand expenditure of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitation of internal financial controls over financial reporting

Because of the inherent limitation of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatement due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal controls over financial reporting 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 Satendra Rawat & Co

Chartered Accountants

FRN- 008298C

(CA. Satendra Rawat)

Partner

Membership No.- 074126

Date: 30.05.2016

Place: New Delhi