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Refex Industries Ltd.

BSE: 532884 Sector: Industrials
NSE: REFEX ISIN Code: INE056I01017
BSE 00:00 | 22 May 50.70 2.40
(4.97%)
OPEN

50.70

HIGH

50.70

LOW

50.70

NSE 00:00 | 22 May 50.80 2.40
(4.96%)
OPEN

50.80

HIGH

50.80

LOW

50.80

OPEN 50.70
PREVIOUS CLOSE 48.30
VOLUME 15962
52-Week high 50.70
52-Week low 10.52
P/E 5.81
Mkt Cap.(Rs cr) 78
Buy Price 50.70
Buy Qty 5955.00
Sell Price 50.70
Sell Qty 500.00
OPEN 50.70
CLOSE 48.30
VOLUME 15962
52-Week high 50.70
52-Week low 10.52
P/E 5.81
Mkt Cap.(Rs cr) 78
Buy Price 50.70
Buy Qty 5955.00
Sell Price 50.70
Sell Qty 500.00

Refex Industries Ltd. (REFEX) - Auditors Report

Company auditors report

To the Members of Refex Industries Limited Report on the Standalone FinancialStatements

We have audited the accompanying standalone financial statements of Refex IndustriesLimited ("the Company") which comprise the Balance Sheet as at 31 st March2018 the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified u/s143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers

internal financial control relevant to the Company's preparation of the standalonefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Management as well as evaluating the overall presentation of thestandalone financial statements.

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

Basis for Qualified Opinion:

The Company is not providing for liability for gratuity as per actuarial valuationwhich is not in accordance of the Accounting Standard on Provision for Gratuity (AS-15)(Refer Note 2(i) forming part of Financial Statements) issued by The Institute ofChartered Accountants of India and the impact of which is unascertainabie.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion above the standalone financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312018 and its profit and its cash flow for the year ended on that date.

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 Act we give in the ‘Annexure A' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable

2. As required by section 143(3) of the Act we further report to the extentapplicable 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 Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d. in our opinion except for the effects of the matter described in the Basis forQualified opinion paragraph the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with relevant ruleissued thereunder.;

e. on the basis of written representations received from the Directors as on 31 stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2018 from being appointed as a director in terms ofsub-section (2) of section 164 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"; 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 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 as mentioned in Note 28.1 (i)

ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts.

iii. The company had an amount of Rs.43674/- being the unclaimed dividend declared inthe AGM held in Nov 2009 and due for transfer to Investor Education and Protection Fund(IEPF) by the Company. but the same has been transferred to IEPF as on 31 st July 2017.

For M. KRISHNAKUMAR & ASSOCIATES

Chartered Accountants

Firm Registration No. 006853S

Place: Chennai Date: 25th May 2018 M. KRISHNA KUMAR B.Sc. FCA Proprietor

Membership No.203929

‘ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT:

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the

standalone financial statements of the Company for the year ended 31 st March 2018 wereport that:

1. a) The Company has maintained proper records showing full particulars including

quantitative details and situations of fixed assets.

b) All the assets have not been physically verified by the management during the yearbut there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

c) The title deeds of immovable properties are held in the name of the company.

2. The inventory has been physically verified during the year by the Management. In ouropinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stock and book records such were not material.

3. (a) According to the information & explanations given to us the Company has notgranted

loans secured or unsecured to companies firms LLP or other parties covered in theregister maintained u/s.189 of the Act except that it has granted loans of Rs. 3315.19lakhs (Rs.3395.59) the yearend balance being Rs.3423.36 (Rs.2677.59) lakhs to twocompanies covered in the register maintained under section 189 of the Act. In our opinionthe grant of such loan is not prejudicial to the interest of the company.

(b) In our opinion and according to the information and explanations given to us theterms of repayment of the loan and payment of interest have not been stipulated; howeverthey are repayable on the mutual agreement of both the parties involved. As there is nostipulation of payment of interest the question of the receipt of interest does not arise.

(c) As the company has not stipulated the terms and conditions for repayment ofprincipal and interest we are unable to comment on the overdue amount.

4. In our opinion and according to the information and explanations given to us thecompany has not complied with the provisions of section 185 and 186 of the Companies Act2013 with respect to the loans investments guarantees and security made. The Company hasgranted a loan of Rs.3527.03(Rs.3035.72) lakhs to a company and a corporate guarantee ofRs.37.48 (Rs.37.48 crs) crores which is notin compliance with section 185 of the Act.

5. The Company has not accepted any deposits from the public.

6. The Central Government has not prescribed maintenance of cost records u/s 148 (1) ofthe Act.

7. a) The Company is regular in depositing with appropriate authorities undisputedstatutory

dues including provident fund employees' state insurance income-tax sales-taxservice tax custom duty excise duty VAT cess and other statutory dues applicable to itwith appropriate authorities and that there are no outstanding dues as on the last day ofthe financial year for a period of more than six months from the date they became payableexcept in the following cases:

Particulars Amount (In Rs.) Details
Maharashtra VAT Rs.4673827/- Maharashtra Sales Tax Dept
Income tax Rs.2624382/- Income Tax for A.Y. 2008-09

b) According to the information and explanations given to us the particulars of duesin respect of income tax service tax sales tax customs duty excise duty VAT and cesswhich have not been deposited on account of a dispute are as follows

Particulars Amount (In Rs.) Details
A.Y.2009-10 17061280/- Under Appeal with the Hon'ble Income Tax Appellate Tribunal Chennai
A.Y.2011-12 58145540/- Under Appeal with the Hon'ble Commissioner of Income Tax (Appeals) Chennai
2006-07 to 2011-12 98301807/- Asst.Commissioner Thirukazhukundram

8. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.

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. 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 duringthe course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

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 transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given 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)of the Order is not applicable.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For M. KRISHNAKUMAR & ASSOCIATES

Chartered Accountants

Firm Registration No. 006853S

Place: Chennai Date: 25th May 2018 M. KRISHNA KUMAR B.Sc. FCA Proprietor

Membership No.203929

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

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 RefexIndustries Limited ("the Company") as of March 31 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 controls systemover 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 authorizations 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 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 2018 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.

For M. KRISHNAKUMAR & ASSOCIATES

Chartered Accountants

Firm Registration No. 006853S

Place: Chennai Date: 25th May 2018 M. KRISHNA KUMAR B.Sc. FCA Proprietor

Membership No.203929