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Uflex Ltd.

BSE: 500148 Sector: Industrials
NSE: UFLEX ISIN Code: INE516A01017
BSE 00:00 | 03 Jul 212.00 -1.95
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210.15

NSE 00:00 | 03 Jul 212.50 -1.40
(-0.65%)
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214.15

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OPEN 214.05
PREVIOUS CLOSE 213.95
VOLUME 8277
52-Week high 246.00
52-Week low 119.95
P/E 10.69
Mkt Cap.(Rs cr) 1,531
Buy Price 212.00
Buy Qty 275.00
Sell Price 213.90
Sell Qty 1.00
OPEN 214.05
CLOSE 213.95
VOLUME 8277
52-Week high 246.00
52-Week low 119.95
P/E 10.69
Mkt Cap.(Rs cr) 1,531
Buy Price 212.00
Buy Qty 275.00
Sell Price 213.90
Sell Qty 1.00

Uflex Ltd. (UFLEX) - Auditors Report

Company auditors report

TO THE MEMBERS OF UFLEX LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Uflex Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity the Cash Flow Statement for the year then ended notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 the profit and total comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Key Audit matters

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 year.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated vide this report:

key Audit matter Auditor's Response
Adoption of "Revenue from contracts with Customers" (Ind AS 115') Our audit procedures on adoption of "Revenue from contracts with Customers" ('Ind AS

115') which is the new revenue Accounting Standard replacing the old corresponding

applicable Accounting Standard on "Revenue" (Ind AS 18) includes the following inter-alia:

• Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue accounting standard;

• Evaluated the detailed analysis performed by those charged with governance and those acting on their directions on revenue streams by selecting samples for the existing contracts with customers and considered revenue recognition policy in the current year in respect of those revenue streams;

• Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures.

• Evaluated the revenue recognized criteria based on the contract entered with customers.

• Evaluated the treatment accorded and disclosures by the company for sales returns trade discounts rate differences volume rebates and other factors having bearing on revenue recognition.

Valuation of Inventory Audit Procedure adopted includes the following inter-alia:
Raw Material Work-inProgress and Finished Goods

Export Benefits and GST Benefits

• Evaluated the design and implementation of process and internal controls laid down by the company for valuation of WIP and Finished goods at lower of cost based on weighted average method or net realizable value and also tested the operating effectiveness of the aforesaid controls.

• Evaluated the design and implementation of internal controls laid down by the company for valuation of raw material at lower of cost based on FIFO method or net realizable value and also tested the operating effectiveness of the aforesaid controls.

• Evaluated the design and implementation of internal controls laid down by the company for identifying Net Realisable Value of finished goods and work-in-progress by verifying the contract with customers where applicable or subsequent selling price.

• Evaluated the design and implementation of internal controls laid down by the company for identifying Net Realisable Value of Raw Material with reference to subsequent landed cost.

• Analysed all fixed and variable overheads considered for valuation of Finished Goods and Work-in-Progress.

• Compared the subsequent realization on sample basis to assess the reasonableness of the net realizable value that was estimated and considered by the management.

• Compared the actual costs based on the subsequent sale transaction to assess the reasonableness of the cost to sell that was estimated and considered by the management.

• Compared the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value.

• Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.

Audit Procedures adopted includes the following inter-alia:

• Evaluated the design and implementation of process and internal controls laid down by the company for ensuring timely and accurate booking of Export Benefits and GST Benefits in the books of accounts.

• Compared the Export Benefits booked on eligible export sales in accordance with current Foreign Trade Policy and respective Schemes documents filed with the authorities and actual benefits received.

• Evaluated the controls laid down by the company for ensuring timely reversal of export benefits with interest if applicable on return of export sales or non-receipt of remittances within time prescribed.

• In respect of GST Refund available to manufacturing units of the Company at Jammu compared the GST refund booked with applicable Scheme(s) claim filed with the GST Authorities and actual claim/ reimbursement subsequently received by the Company.

• Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the informationincluded in the Board's Report including Annexures to the Board's Report viz. Report onCorporate Governance Management Discussion and Analysis Corporate Social ResponsibilityReport and Shareholder Information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit 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 Standalone Financial Statements

The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 accountingrecords relevant to the preparation and presentation of the Standalone FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Financial Statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone 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 StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in

a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 Standalone Financial Statementsof the current year 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

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in

terms of Section 143(11) of the Act we give in "Annexure A" a statement onthe matters specified in paragraphs 3

and 4 of the Order.

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 it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

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 the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

h) 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 as amended in our opinion and to the bestof 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- Refer Note No. 33 A & 33 C to theStandalone Financial Statements;

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

iii. According to the information and explanations given to us there was no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

For KAAP & Associates

Chartered Accountants ICAI Firm's Regn. No.: 019416N

CA. Deepak Sehgal

Place : NOIDA Partner

Date : May 27 2019 Membership No. 085391

ANNEXURE-A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" Section of our report to the members of Uflex Ltd. ("theCompany") of even date)

1. In respect of Fixed Assets (Property Plant and Equipment Capital Work in ProgressInvestment Property and Other Intangible Assets including those under development) of theCompany:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

b) The Fixed Assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such physical verification;

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except in respect of two residential flats aggregating toRs. 25.15 lacs (original acquisition cost).

2. The inventory has been physically verified during the year by the management atreasonable intervals and the discrepancies noticed on such physical verification ofinventory as compared to book records were not significant and were properly dealt within the books of account.

3. In respect of interest-bearing unsecured loan granted during the year by theCompany to one of the Indian Subsidiary and an overseas Jointly Controlled Entity coveredin the register maintained under Section 189 of the Companies Act 2013:

a) In our opinion and according to the information given to us the terms andconditions of the loans given by the Company are prima facie not prejudicial to theinterest of the Company.

b) The terms for repayment of principal and payment of interest have been stipulated;however repayments of principal amount and interest has not started till the date of theBalance Sheet as per the stipulated terms.

c) There is no overdue amount in respect of both principal and interest.

Further in respect of unsecured loan granted to one of the Indian Subsidiary asreferred above outstanding at the beginning of the year re-payments were made as perstipulated terms and the same was squared-off during the year.

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

5. The Company has not accepted any deposits under the provisions of Sections 73 to 76or any other relevant provisions of the Act and the rules framed there under during theyear under report.

UFLEX LIMITED

'A pent ofyorn daily life'

CIN:L74899DL1988PLC032166

6. We have broadly reviewed the cost records maintained by the Company under Section148(1) of the Act and are of the opinion that prima- facie the prescribed records havebeen made and maintained.

7. In respect of Statutory dues:

a) According to the records of the Company undisputed statutory dues includingProvident Fund Employee's State Insurance Income Tax Custom Duty Goods and Service Tax(GST) Cess and other applicable statutory dues have been generally deposited regularlywith the appropriate authorities.

b) According to the information and explanation given to us there are no dues ofcustom duty which have not been deposited on account of any dispute. However followingamount are involved (Gross of amount deposited under protest if any) with under-mentionedforums in respect of the disputed statutory dues:

Name of Statute Nature of Dues Amount (Rs. in lacs) Period

(FY unless specified otherwise)

Forum where dispute is pending
The Central Sales

Tax Act 1956 and concerned Value Added Tax laws

Sales tax and VAT

775.20 2008-09 2010-11 High Courts
206.68 2000-01 2002-03 2009-10 2011-12 2012-13 2013-14 2015-16 Tribunal
49.62 2014-15 Appellate Authority
311.92 2014-15 2015-16 Deputy Commissioner Appeal
104.70 2014-15 2015-16 Assessing Authorities
Total 1448.12
The Income-tax Act 1961

Income-tax

80.31 AY 2002-03 AY 2003-04 High Court
697.90 AY 2004-05 AY 2005-06 AY 2006-07 AY 2007-08 AY 2011-12 AY 2012-13 AY 2013-14 ITAT
68.31 AY 2016-17 CIT(A)
106.94 AY 2017-18 Assessing Authorities
Total 953.46
The Central Excise Act 1944

Excise Duty

142.55 1996-97 1997-98 1998-99 2006-07 Supreme Court
123.32 1997-98 1998-99 2000-01 2005-06 High Courts
3052.49 2005-06 2010-112011-12 2012-13 2013-14 2014-15 2015-16 Tribunal
2225.42 1997-98 1998-99

2004-05 2006-07 2012-13 2013-14 2014-15 2015-16 2016-17

Commissioner (Appeals)
361.29 1997-98 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 AC/DC/JC/ADC
Total 5905.07
The Finance Act

1994

Service Tax

54.86 2006-07 Commissioner (Appeals)
6.34 2006-07 AC/DC
Total 61.20
Laws on Good and Service Tax Goods and Service Tax 12.60 2018-19 Assessing Authorities

8. Based on the audit procedure and according to the information and explanation givento us we are of the opinion that the Company has not defaulted in repayment of loans orborrowings to banks. Further the Company does not have any loans and borrowings fromfinancial institutions or government and has not issued any debentures.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments). The term loans raised during the year have beenapplied for the same purpose for which the loans were obtained.

THIRTIETH ANNUAL REPORT 2018 - 2019

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 give 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 Standalone Financial Statements as required bythe applicable Ind AS.

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 any non-cashtransactions with directors or persons connected with them. 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 Act1934.

For KAAP & Associates

Chartered Accountants ICAI Firm's Regn. No.: 019416N

CA. Deepak Sehgal

Place : NOIDA Partner

Date : May 27 2019 Membership No. 085391

ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Uflex Ltd. ("theCompany") 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 UflexLimited ('the Company') as of March 31 2019 in conjunction with our audit of theStandalone Financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the "Guidance Note on Audit of Internal Financial Controls over FinancialReporting" (the 'Guidance Note') issued by the Institute of Chartered Accountants ofIndia ('ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

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 accordance with the Guidance Note issued by the ICAI and theStandards on Auditing prescribed under Section 143 (10) of the Act to the extentapplicable to an audit of Internal Financial Controls.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting were established and maintained andif 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the Standalone financial statements whether due to fraud orerror.

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 Standalone financial statements for external purposes in accordance withthe Ind AS and other accounting principles generally accepted in India. A company'sinternal financial control over financial reporting includes those policies and proceduresthat (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) providereasonable assurance that transactions are recorded as necessary to permit preparation ofStandalone financial statements in accordance with the Ind AS and other accountingprinciples generally accepted in India and that receipts and expenditures of the Companyare being made only in accordance with authorizations of the Management and Directors ofthe Company; and (3) provide reasonable assurance regarding prevention or timely detectionof unauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the Standalone 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 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 March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.

For KAAP & Associates

Chartered Accountants ICAI Firm's Regn. No.: 019416N

CA. Deepak Sehgal

Place : NOIDA Partner

Date : May 27 2019 Membership No. 085391