To the Members of
Arex Industries Limited
Report on the Audit of the Financial Statements
We have audited the financial statements of Arex Industries Limited (theCompany) which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss Statement of Changes in Equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information
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 theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2020 and its profit(including other comprehensive income)change in equity and its cash flow for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
In our opinion and based on audit of the financial statement of the Company we havedetermined that there are no key audit matters to communicate in our report.
The Company's management and Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the course of our audit or otherwiseappears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 that give a true and fair view of the state of affairsprofit(including other comprehensive income) changes in equity and cash flow of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under section 133 of the Act.. 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 judgments 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 accountingsrecords 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.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Financial Statements
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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the 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 of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system with reference to thefinancial statements in place and the operating effectiveness of such 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.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary 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 it appears from our examination of those books.
c. The Balance Sheet and the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e. On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of section164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements (refer note no.27 to the Ind AS financialstatements).
ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
h. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
|For SWETA PATEL & ASSOCIATES |
|Chartered accountants |
|(Firm Registration No. 139165W) |
|(Hemang V Patel) |
|Membership No. 154494 |
|Place : CHHATRAL |
|Date : 26-06-2020 |
|UDIN : 20154494AAAAAS8981 |
Annexure A' to Independent Auditors' Report
[Referred to in Paragraph 1 under the heading of Report on Other Legal andRegulatory Requirements of our report of even date]
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us physical verification of Fixed Assets was conducted by themanagement during the year. In our opinion frequency of physical verification isreasonable. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
(c) The title deeds of immovable properties as disclosed in note no.3 to the financialstatements are held in name of the Company.
2. As explained to us during the year the inventories have been physically verifiedby the management at regular intervals. In our opinion the frequency of such verificationis reasonable. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
3. During the year under review the Company has not granted any loans secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013.
Therefore the provisions of Clause 3(iiia) (iiib) and (iiic) of the said Order arenot applicable to the Company.
4. During the year under review the Company has not granted any loans or made anyinvestments or provided any guarantees or securities to the parties covered under section185 and 186 of the Companies Act 2013. Therefore the provisions of Clause 3(iv) of thesaid Order are not applicable to the Company.
5. The Company has not accepted deposits from the public within the meaning of section73 to 76 of the Companies Act 2013 and the Rules framed there under.
6. According to the information and explanation given to us the maintenance of costrecords has not been prescribed under sub-section (1) of Section 148 of the Companies Act2013.
7. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account the Company has been generally regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Goods and Service Tax Custom duty Cess and any other statutory dueswhichever is applicable during the year with the appropriate authorities and no undisputeddues payable in respect of outstanding statutory dues were in arrears as at 31stMarch 2020 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no amounts inrespect of sales tax/ income tax/ custom duty / excise duty/ service tax that have notbeen deposited with the appropriate authorities on account of any dispute except thefollowing:
|Name of the Statute ||Nature of the dues ||Amount (Rs.) ||Period to which the amount relates ||Forum where dispute is pending |
|Income tax Act ||Income tax ||1351672 ||Assessment year 1996-97 ||High Court of Gujarat |
8. As informed to us the Company has not defaulted in repayment of loans or borrowingsto financial institution or banks.
9. The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments).
The term loans obtained during the year has been applied for the purposes for whichthey were raised.
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 given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officer or employees noticed orreported during the year nor have we been informed of any such case by the Management.
11. According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid inaccordance with requisite approvals mandated by the provisions of section 197 read withSchedule V to the Act.
12. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it; hence the provisions of Clause 3(xii) of the Order are not applicable to theCompany.
13. The Company has entered into transactions with related parties in compliance withthe provisions of sections 177 and section 188 of the Act. The details of such relatedparty transactions have been disclosed in the financial statements as required underIndian Accounting Standard (IndAS) 24 Related Party Disclosures specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015.
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. The Company has not entered into any non-cash transactions with its directors orpersons connected with him.
Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.
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.
|For SWETA PATEL & ASSOCIATES || |
|Chartered accountants || |
|(Firm Registration No. 139165W) || |
|(Hemang V Patel) || |
|Partner || |
|Membership No. 154494 || |
|Place : CHHATRAL Date : 26-06-2020 ||UDIN : 20154494AAAAAS8981 |
Annexure B' to Independent Auditors' Report
[Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' of our report of even date]
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ArexIndustries Limited ("the Company") as of 31stMarch 2020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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 interne' 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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies. thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act. 2013.
Our responsibility is express an opinion on the Company's internal financial controlsover financial reporting based on our audit we conducted our audit in accordance With theGuidance Note issued by the Institute of Chartered Accountants of India and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial control overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting. assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment. Including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.
|For SWETA PATEL & ASSOCIATES |
|Chartered accountants |
|(Firm Registration No. 139165W) |
|(Hemang V Patel) |
|Membership No. 154494 |
|Place : CHHATRAL |
|Date : 26-06-2020 |
|UDIN : 20154494AAAAAS8981 |