We have audited the accompanying financial statements of Arex
Industries Limited (the Company), which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accountings records, relevant to the preparation
and presentation of the financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal
financial control relevant to the Company''s preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates made by the
Company''s Directors, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 (the
Order) issued by the Central Government of India in terms of sub
section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified 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 best of 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 the Company so far as it appears from our examination of
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the aforesaid financial statements comply with the
Accounting Standards 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 31st March, 2015 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2015 from being
appointed as a director in terms of section 164(2) of the Act.
f. With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position by way of Note 25 to the financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Annexure to Independent Auditors'' Report
[Referred to in Paragraph 1 under the heading of Report on Other Legal
and Regulatory Requirements of our report of even date]
1. (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) As explained to us, physical verification of Fixed Assets was
conducted by the management during the year. In our opinion, frequency
of physical verification is reasonable having regard to the size of the
operation of the company. According to the information and explanation
given to us no material discrepancies were noticed on such
2. (a) As explained to us, during the year, the management has
conducted physical verification of inventories at regular intervals,
the frequency of which, in our opinion, are reasonable and adequate in
relation to the size of the Company and nature of its business.
(b) The procedures for the physical verification of inventories
followed by management are reasonable and adequate in relation to the
size of the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records in
respect of inventories. We have been explained that no material
discrepancies were noticed on physical verification of inventories,
when compared with their book balance.
3. During the year under review, the company has not granted any
loans, secured or unsecured to companies, firms or other parties
covered in the register maintained under section 189 of the Companies
Act, 2013. Consequently, requirements of clause (iii) (a) and (iii) (b)
of paragraph 3 of the order are not applicable.
4. In our opinion, and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion, and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control systems.
5. The company has not accepted any deposits from the public.
6. According to the information and explanation given to us the
maintenance of cost records has not been prescribed under sub-section
(1) of Section 148 of the Companies Act, 2013.
7. (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the company
has been generally regular in depositing undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Income-tax, Value
Added Tax, Wealth Tax, Custom duty, Excise duty, Service Tax, Cess and
any other dues whichever is applicable during the year with the
appropriate authorities and no undisputed dues payable in respect of
outstanding statutory dues were in arrears as at 31st March, 2015 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us as at
31st March, 2015 there are no amounts in respect of sales tax/ income
tax/ custom duty/ wealth tax/ excise duty/ service tax/ cess that have
not been deposited with the appropriate authorities on account of any
dispute except as stated below.
Nature of the Statute Nature of the Dues Amount
Income tax Act Income tax 511670
Income tax Act Income tax 1351672
Nature of the Period to which amount Forum where dispute
Statute relates is pending
Income tax Act Assessment year 2012-13 CIT(Appeals)
Income tax Act Assessment year 1996-97 High Court of Gujarat
(c) According to the information and explanations given to us and on
the basis of our examination of the books of account, the amount
required to be transferred to the Investor Education and Protection
Fund has been transferred to such fund by the Company within time.
8. The company does not have any accumulated losses at the end of the
financial year. The company has not incurred cash losses in the current
as well as in the immediately preceding financial year.
9. The company has not defaulted in repayment of dues to financial
10. In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loan taken by
others from banks and financial institutions.
11. In our opinion , the term loans disbursed by bank during the year
have been applied for the purpose for which they have been obtained.
12. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
For C.R. SHAREDALAL & CO.
PLACE : CHHATRAL PARTNER
DATE : 19-05-2015 Membership No.047136