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Felix Industries Ltd.

BSE: 535033 Sector: Engineering
NSE: FELIX ISIN Code: INE901X01013
BSE 05:30 | 01 Jan Felix Industries Ltd
NSE 05:30 | 01 Jan Felix Industries Ltd

Felix Industries Ltd. (FELIX) - Auditors Report

Company auditors report

TO THE MEMBERS OF

FELIX INDUSTRIES LIMITED AHMEDABAD.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS:

OPINION

We have audited the accompanying financial statements of FELIX INDUSTRIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "FinancialStatements").

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 ("Act") in the manner so required and give a true and fairview in conformity with the Accounting Standards prescribed under section 133 of the Actread with the Rule 7 of the Companies (Accounts) Rules 2014 and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 and its profit and its cash flows for the year ended on that date.

BASIS OF OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs 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 together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

EMPHASIS OF MATTER:

We draw attention to the following matters in the Notes to the Financial Statements:

I. Notes No. 29(e) relating to the non-provision for doubtful debts amounting to Rs.20315705/-

KEY AUDIT MATTERS:

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the following matters to be key audit matters to be communicated throughour report.

Description of Key Audit Matters:

The Key Audit Matter How the matter was addressed in our audit
1. Intangible Assets Under Development:
During the year the company commenced design and development of Waste Water Recycling Process- PEA Effluent. This will be in the form of improved business process which is expected to be used in the production process or supply of goods or provision of services and from which future economic benefits are expected to flow to the company in the form of revenue generation. The process was in process as at the reporting date. The expenditures incurred on the design and development of the process has been treated as "Intangible Assets Under Development" in the financial statements. (Refer to Note No. 29(d) Our audit procedure included
• obtaining basic understanding of the process.
• how the process will be available for use in the production process or supply of goods or provision of services
• how the company can use the process to generate future economic benefits
• obtaining basis understanding of the process of registration if any.
The risks factors with the above matter are:
(i) The company may not be able to fully complete the process so as to make it available for use in the production process or supply of goods or provision of services.
(ii) Legal constraints and compliances if any for the registration of the process.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS’ REPORT THEREON

The Company’s Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the Board’sReport including Annexures to the Board’s Report Business Responsibility Report butdoes not include the 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 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 financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including Accounting Standards specified underSection 133 of the Act read the Companies (Accounts) Rules 2014 as amended.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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.

The Board of Directors is also responsible for overseeing the Company’s financialreporting process.

AUDITOR’S RESPONSIBILITIES 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 ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe 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 concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors’ report unless law or regulation precludes public disclosure about thematter or 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:

1. As required by The Companies (Auditor's Report) Order 2016 issued by The CentralGovernment of India in term of section 143 (11) of The Companies Act 2013 we enclose inthe Annexure-A hereto a statement on the matters specified in paragraphs 3 and 4 of thesaid order to the extent applicable to the company.

2. As required by section 143(3) of the Act based on our audit 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 purposes 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 and Loss and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account;

d) In our opinion aforesaid Balance Sheet the Statement of Profit and Loss and theStatement of Cash Flows comply with the Accounting Standards prescribed under section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;

e) On the basis of written representations received from the directors of the Companyas on March 31 2019 and taken on record by the Board of Directors none of the directorsis disqualified as on March 31 2019 from being appointed as a director in terms ofsub-section (2) of section 164 of Act;

f) With respect to the adequacy of internal financial control over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in Annexure-B;

g) With respect to the other matters included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.

iii. As at 31st March 2019 there were no amounts which were required to be transferredto the Investor Education and Protection Fund by the Company.

FOR AND ON BEHALF OF
S. N. SHAH & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO. 109782W
FIROJ G. BODLA
PLACE: AHMEDABAD PARTNER
DATED: 30TH MAY 2019 M. No. 126770

ANNEXURE-A TO THE INDEPENDENT AUDITOR’S REPORT

[Referred to in paragraph 1 under "Report On Other Legal And RegulatoryRequirements’ section of our report of even date to the members of FELIX INDUSTRIESLIMITED on the financial statements of the company for the year ended 31st March 2019:

On the basis of such checks of the books and records of the company as we consideredappropriate and according to the information and explanation given to us during the courseof audit we further report that:

i. In respect of its fixed assets:

a) According to the information and explanations given to us the company is in theprocess of compiling records of fixed assets showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us the management in accordance with a phased programme ofverification adopted by the company has physically verified the fixed assets. To the bestof our knowledge no material discrepancies have been noticed on such verification or havebeen reported to us.

c) According to the information and explanations given to us and on the basis of theexamination of the records of the company the title deeds of immovable properties areheld in the name of the Company as at the balance sheet date.

ii. In respect of its Inventories:

a) As explained to us the inventories have been physical verified during the year bythe management of the company.

b) As explained to us no material discrepancies were noticed on physical verificationof inventory as compared to the books of account. iii. Loans/Advances Granted:

As informed to us during the year the company has not granted any secured or unsecuredloans to any Company Firms Limited Liability Partnerships or Other Parties covered inthe register maintained under section 189 of the Companies Act 2013 and hence othermatters related thereto referred to in clause III (a) (b) and (c) of The Companies(Auditor's Report) Order 2016 are not applicable.

iv. According to the information and explanations given to us the company has compliedwith provisions of section 185 and 186 in respect of transaction of the nature referred toin Sections 185 and 186 of The Companies Act 2013 in respect of any loans investmentsguarantees and security.

v. According to the information and explanations given to us the company has notaccepted any deposits from the public within the meaning of section 737475 & 76 ofthe Act and Rules framed thereunder during the year and therefore the provisions ofclause 3(v) of the Order are not applicable to the Company.

vi. As per information and explanations given to us the company has been engaged inthe trading activities and provisions of services during the year and hence the company isnot required to make and maintain the cost records and accounts as prescribed by TheCentral Government under Section 148(1) of the Companies Act 2013.

vii. In respect of Statutory Dues:

a) As per the information & explanations furnished to us in our opinion thecompany is generally regular in depositing with appropriate authorities undisputedstatutory dues of T.D.S. GST Employee Provident Fund ESIC and other material statutorydues applicable to it. There has been no outstanding as at 31st March 2019 of undisputedliabilities outstanding for more than six months.

b) According to information and explanations given to us and so far as appears from ourexamination of books of account there were no statutory dues outstanding as at 31stMarch 2019 which have not been deposited on account of any dispute.

viii. According to the information and explanations given to us the company has repaidthe principal amount and made payment of interest on loans or borrowings taken by it frombanks.

ix. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) during the year.In our opinion and according to the information and explanations given to us the companyhas applied the term loan obtained during the year for the purpose for which it had beenobtained.

x. According to the information and explanations given to us no material fraud by thecompany or on the company by its Officers or Employees has been noticed or reported to usby the management during the year.

xi. In our opinion and according to the information and explanations given to us thecompany had paid/provided managerial remuneration in accordance with the provisions ofSection 197 of the Companies Act 2013 read with Schedule V of the Companies Act 2013.

xii. As the company is not the Nidhi Company clause (xii) of paragraph 3 of TheCompanies (Auditor's Report) Order 2016 is not applicable to it.

xiii. According to the information and explanations given to us the company is incompliance with the provisions of sections 177 and 188 of the Companies Act 2013 whereapplicable for related party transactions and the details of related party transactionshave been disclosed in the Notes to the Financial Statements in accordance with theapplicable Accounting Standards.

xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year clause (xiv) of paragraph 3 ofThe Companies (Auditor's Report) Order 2016 is not applicable to it during the year.

xv. According to the information and explanations given to us the company has notentered into any non-cash transaction with directors or persons connected with them andhence clause (xv) of paragraph 3 of The Companies (Auditor's Report) Order 2016 is notapplicable to it during the year.

xvi. As the company is not required to be registered under section 45-IA of the ReserveBank of India 1934 clause (xvi) of paragraph 3 of The Companies (Auditor's Report)Order 2016 is not applicable to it.

FOR AND ON BEHALF OF
S. N. SHAH & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO. 109782W
FIROJ G. BODLA
PLACE: AHMEDABAD PARTNER
DATED: 30TH MAY 2019 M. No. 126770

ANNEXURE "B" TO THE INDEPENDENT AUDITORS’ REPORT

[REFERRED TO IN PARAGRAPH 2(f) UNDER "REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS SECTION OF OUR REPORT OF EVEN DATE]

FINANCIAL YEAR ENDED 31ST MARCH 2019

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

We have audited the internal financial controls over financial reporting of FELIXINDUSTRIES LIMITED ("the Company") as of March 31 2019 in conjunction withour audit of the financial statements of the company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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.

Auditors’ 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 prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the 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 procedures 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 exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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 controlssystem 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.

Opinion

In our opinion and to the best of our information and according to the information andexplanations given to us the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were commensurate with the nature of the business of the companyand operating effectively as at March 31 2019 based on the internal control overfinancial reporting criteria established by the company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

FOR AND ON BEHALF OF
S. N. SHAH & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO. 109782W
FIROJ G. BODLA
PLACE: AHMEDABAD PARTNER
DATED: 30TH MAY 2019 M. No. 126770

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