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Suraj Ltd.

BSE: 531638 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE713C01016
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NSE 05:30 | 01 Jan Suraj Ltd
OPEN 20.50
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VOLUME 6
52-Week high 43.00
52-Week low 20.45
P/E
Mkt Cap.(Rs cr) 39
Buy Price 20.50
Buy Qty 124.00
Sell Price 20.90
Sell Qty 40.00
OPEN 20.50
CLOSE 20.50
VOLUME 6
52-Week high 43.00
52-Week low 20.45
P/E
Mkt Cap.(Rs cr) 39
Buy Price 20.50
Buy Qty 124.00
Sell Price 20.90
Sell Qty 40.00

Suraj Ltd. (SURAJ) - Auditors Report

Company auditors report

To The Members of

SURAJ LIMITED

Ahmedabad.

Report on the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Suraj Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including the statement of Other Comprehensive Income) theCash Flow Statement and the statement of changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (herein afterreferred to as "the standalone financial statements").

2. In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by theCompanies Act2013("the Act")in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards ("Ind As") specified under section 133 of the Actof the state of affairs of the Company as at March 312019 its profits (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ('ICAI') together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

5. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key Audit Matter Auditor's Response
Net Realizable Value of Goods
Goods are valued at lower of cost &net realizable value (estimated selling price less estimated cost to sell) considering the business practice of company major sales are through export of steel pipes & other products and purchase through imports. 1. Obtained an understanding of the determination of the net realizable values of the stock and assessed and tested the reasonableness of the significant judgments applied by the management.
The value of stock is heavily affected by the and fluctuation of currency difference & always has volatility on price. Therefore it has been considered as a Key Audit Matter. 2. Evaluated the design of internal controls relating to the valuation of finished goods also tested the operating effectiveness of the aforesaid controls.
The total value of finished goods as at 31 March 2019 is Rs. 8415.45 lakhs. Also refer to Note 3.10 for the accounting policy on valuation of finished goods. 3. Compared the actual realization after the year end / latest realization to assess the reasonableness of the net realizable value that was estimated and considered by the management.
4. Compared the actual costs incurred to sell after the year end / based on the latest sale transaction to assess the reasonableness of the cost to sell that was estimated and considered by the management.
5. Compared the cost of the finished goods with the estimated net realizable value and checked if the finished goods were recorded at Net realizable value where the cost was higher than the net realizable value.
6. Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.

Information other than the financial statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report 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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

7. 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 standalone financial statementthat give a true and fair of the financial position financial performance including othercomprehensive Income cash flows and changes in equity of the company in accordance withaccounting principles generally accepted in India including Indian Accounting Standards(Ind AS) specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provision of the Act forsafeguarding of the assets of the company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies makingjudgments and estimates that are reasonable and prudent and the design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to preparationand presentation of the financial statements that give true and fair view and are freefrom material misstatement whether due to fraud or error.

8. In preparing the financial statements 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.

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

Auditor's Responsibilities for the Audit of the Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assessthe 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 ofinternal control relevant to the audit in order todesign audit proceduresthat are appropriate in the circumstances. Under Section 143(3) (i)of the Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls 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 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 Company'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 Company 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.

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

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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

15. As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the central government of India in terms of sub-section(11)of section 143 of theAct & on the basis of such checks of books & records of the company as we considerappropriate and according to the information and explanation given to us we give in the"Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of theorder to the extent applicable.

16. As required by section143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestour knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from the examination of those books;

c. The balance sheet the statement of profit and loss including the statement of otherComprehensive Income cash flow statement and statement of changes in Equity dealt withthis Reports are in agreement with the books of accounts;

d. In our opinion the aforesaid standalone financial statements comply with accountingStandards specified under section 133 of the Act.

e. On the basis of written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a directors interms of sections 164(2) of the act;

f. With respect to the adequacy of the internal financial controls over Financialreporting of the Company and operating effectiveness of such controls refer to ourseparate Report in the "Annexure 2" to this report;

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule11 of the companies(Audit And Auditors)Rules2014 in our opinion andto 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 financialposition in its standalone financial statements:

ii. The Company did not have any material foreseeable losses in long term contractincluding derivative contracts during the year ended March 312019

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

Place: Ahmedabad For Rinkesh Shah & Co
Date: 02.05.2019 Chartered Accountants
ICAI FRN: 129690W
CA Rinkesh Shah
Membership No: 131783

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Annexure 1 referred to in Paragraph 1 of Report on Other Legal and RegulatoryRequirements of our report of even date for the year ended March 31 2019

1. (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of Property Plant & Equipments;

(b) All Property Plant & Equipments have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the company and the nature of itsassets. No material discrepancies were noticed on such verification;

(c) According to the information and explanations given by the management the titledeeds of Immovable properties included in property plant and equipment are held in thename of the Company.

2. The inventory has been physically verified by the management during the year. In ouropinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification.

3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liability partnershipor other parties covered in register maintained under section 189 of companies Act 2013.Accordingly the provision of clause 3(iii) (a) (b) and (c) of the order are notapplicable to the company and hence not commented upon .

4. In our opinion and according to the information and explanations gives to us theCompany has not advanced any loans or made investments given guaranteesand provided anysecurities in respect of which provision of section 185 and 186 of The Companies Act2013are applicable and hence not commented upon.

5. In our opinion and according to the information and explanations gives to us theCompany has not accepted any deposit within the meaning of sections 73 to 76 of the Actand the Companies (Acceptance of deposits) Rules 2014 (as amended) framed thereunder.Accordingly the provision of clause 3(v) of the order are not applicable.

6. We have broadly reviewed the books of accounts maintained by the company pursuant tothe rules made by the central government for the maintenance of cost records under section148(1) of the companies Act 2013 related to the manufacture of steel tubes and pipesand are of the opinion that prima facie specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

7. (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax goods andservice tax service tax duty of custom duty of excise value added tax Cess and otherstatutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxsales-tax duty of custom duty of excises value added tax cess and other statutory dueswere outstanding at the year end for a period of more than six months from date theybecame payable.

(c) According to the records of the company dues outstanding of income tax valueadded tax sales tax excise duty and duty of custom on account of any dispute are asfollows:

(Rs. In Lakhs)

Name of Statue Nature of the Dues Forum before which the dispute is pending Period to which it relates Disputed Amount
Central Excise Act1944 Excise Duty DGCEI Mumbai (Ineligible Cenvat Credit) OCT-2010 TO NOV13 1197.41
Central Excise Department- Ahmedabad-III FEB-2014 To NOV-2014 397.36
Custom Tariff Act Customs Duty To be filed before CESTAT Mumbai F.Y.-2012-13 86.20
Disputed Excise & Customs demand 1680.97
Sales Tax Act Sales Tax Sales Tax Appellate Commissioner Ahmedabad F.Y.2003-04 2.24
Sales Tax Act Sales Tax Jt. Commissioner of Commercial Taxes Ahmedabad F.Y.2004-05 1.41
Gujarat Value Added Tax Act2003 VAT Gujarat Value Added Tax Tribunal F.Y.2008-09 102.99
Central Sales Tax Act1965 Central Sales Tax Gujarat Value Added Tax Tribunal F.Y.2008-09 2.15
Gujarat Value Added Tax Act2003 VAT Gujarat Value Added Tax Tribunal F.Y.2009-10 160.09
Central Sales Tax Act1965 Central Sales Tax Gujarat Value Added Tax Tribunal F.Y.2009-10 19.27
Gujarat Value Added Tax Act2003 VAT Gujarat Value Added Tax Tribunal F.Y 2010-11 160.16
Central Sales Tax Act1965 Central Sales Tax Gujarat Value Added Tax Tribunal F.Y.2010-11 8.96
Disputed Sales Tax demand 457.28
Income Tax Act1961 Section 220(2) A.Y.2006-07 0.24
Income Tax Act1961 Section 143(3) A.Y.2007-08 19.99
Income Tax Act1961 Section 254 A.Y.2008-09 2.18
Income Tax Act1961 Income Tax CIT (A)-Ahmadabad A.Y.2008-09 634.46
Income Tax Act1961 CIT (A)-Ahmadabad A.Y.2009-10 182.83
Income Tax Act1961 CIT (A)-Ahmedabad A.Y.2011-12 844.58
Income Tax Act1961 CIT (A)-Ahmedabad A.Y.2012-13 1331.96
Income Tax Act1961 CIT (A)-Ahmedabad A.Y.2013-14 601.56
Income Tax Act1961 CIT (A)-Ahmadabad A.Y.2014-15 501.42
Disputed Income Tax Demand 4119.22

8. Based on audit procedures and according to the information and explanations given bythe management the company has not defaulted in repayment of loans or borrowing to a bank.

9. To the best of our knowledge and belief and according to the information andexplanations given by the management the Company has not raised any money by way ofInitial public offer / further public offer/debt instruments and term loans hencereporting under clause (ix) is not applicable to the Company and hence not commented upon.

10. Based on audit procedure performed for the purpose of reporting the true and fairview of the financial statements and according to the information and explanations givenby the management we report that no fraud by the Company or no fraud /material fraud onthe Company by the officer and employees of the Company has been noticed or reportedduring the year.

11. According to the information and explanations given by the management themanagerial remuneration has been paid /provided in accordance with requisite approvalsmandated by the provisions of section 197 read with schedule V to the Companies Act2013.

12. As the Company is not a Nidhi Company Consequently the Nidhi Rules 2014 are notapplicable to it the provisions of Paragraph 3Clause(xii) of the Order are not applicableto the Company.

13. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Accounting Standard.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

15. According to the information and explanations given by the management the Companyhas not entered into any non cash transactions with its Directors or persons connectedwith him as referred to in section 192 of the Companies Act2013. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

Place: Ahmedabad For Rinkesh Shah & Co
Date: 02.05.2019 Chartered Accountants
ICAI FRN: 129690W
CA Rinkesh Shah
Membership No: 131783

"Annexure 2" to Independent Auditor's Report

Referred to in paragraph 2 (f) of the Independent Auditor's Report of even date to themembers of Suraj Limited on the standalone financial statements for the year ended March31 2019.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of SURAJLimited ("the Company") as of March 31 2019 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act 2013.

Auditors' Responsibility

3. 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 2013 to the extent applicable to the audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. 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 with reference to thesestandalone Financial Statements

6. A company's internal financial control 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 control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and Directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Standlone Financial Statements

7. 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

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control 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 Institute of CharteredAccountants of India.

Place: Ahmedabad For Rinkesh Shah & Co
Date: 02.05.2019 Chartered Accountants
ICAI FRN: 129690W
CA Rinkesh Shah
Membership No: 131783