Notes to Accounts of Arex Industries Ltd.

Mar 31, 2024

o) Provisions, Contingent liabilities, Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each Balance sheet date and adjusted to reflect the current best estimate. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not

probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial Statements.

p) Borrowing Cost:

Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the qualifying asset till put for its intended use is capitalised as part of the cost of that asset.

q) Government Grant:

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expense for which it is granted in the nature of compensation.

r) Power Generation from Windmill:

Units generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the balance sheet date has been included in short term loans and advances in current assets.

c) Fair valuation method

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

d) Financial Instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

38 Financial risk management

The management monitors and manages the Financial Risks by reviewing, from time to time, the Cash Flows, during the year. The risk towards loss due to volatility in foreign currency is negligible, even though the Company takes precautionary measures like forward booking for payments of imports. The management takes due care for the credit risk of any default in contractual obligations. Obligations of interest and decrease in sale may be the highest risk on profitability of the Company. The Country is facing non-availability of skilled manpower which may adversely affect profitability of the Company.

39 Additional Regulatory Information as required by Schedule III of the Companies Act, 2013

) All title deeds of immovable properties (other than the properties where the company is the lessee and the lease agreement are duly executed in favour of lessee), are held in the name of

^a) company.

b) The company has not revalued its property, plant and equipment during the year.

c) The company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties, either severally or jointly with any other person.

e) During the year there is no intangible assets under development hence ageing schedule is not applicable.

f) There is no proceedings that have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

g) The company is having cash credit limit from bank which is secured against current assets. The company is required to submit quarterely returns or statements with bank. However there is a difference in the value of quarterly returns or statements submitted with bank and the value as appearing in the books of accounts. Detailed reconciliation of the said difference is shown in below mentioned table :-

h) The company is not declared willful defaulter by any bank or financial institution or other lender.

i) The company is not having any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

j) During the year there were no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond statutory period.

k) Provisions of clause (87) of section 2 of the act read with Companies (Restriction on number of Layers) Rules, 2017 regarding compliance with number of layers of companies is not applicable to the company.

l) Details of ratio is provided in note 39.1.

m) During the year the company has not proposed any Scheme of Arrangements.

n) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

o) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

p) During the year the company is not having any unrecorded transactions that are surrendered or disclosed as income during tax assessments under Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961) and there is no previously unrecorded income and related assets that have been properly recorded in the books of accounts during the year.

r) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

s) The company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

As per our report of even date attached

For, Sweta Patel & Associates For and on behalf of the Board

Chartered Accountants Firm Registration No. 139165W

Sweta H. Patel Dinesh Bilgi Neel Bilgi Chirag Bilgi

(Partner) (DIN:00096099) (DIN:00096180) (DIN:02094970)

Membership No. : 154493 Mg. Director & CFO Mg. Director Mg. Director

UDIN : 24154493BKATUG4270 Place : Chhatral

Date : 23-05-2024 Balkrishna Makwana Kairavi Bilgi

(DIN:00287931) (ACS:21519)

Director Company Secretary

Place : Chhatral Date : 23-05-2024

---

Mar 31, 2023

o) Provisions, Contingent liabilities, Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each Balance sheet date and adjusted to reflect the current best estimate. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial Statements.

p) Borrowing Cost:

Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the qualifying asset till put for its intended use is capitalised as part of the cost of that asset.

q) Government Grant:

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expense for which it is granted in the nature of compensation.

r) Power Generation from Windmill:

Units generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the balance sheet date has been included in short term loans and advances in current assets.

b) Fair value measurement :

Level 1 : Quoted price in active markets for identical assets or liabilities

Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly Level 3 : Inputs for the assets or liabilities that are not based on observable market data (unobservable data)

c) Fair valuation method

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

d) Financial Instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

37 Financial risk management

The management monitors and manages the Financial Risks by reviewing, from time to time, the Cash Flows, during the year. The risk towards loss due to volatility in foreign currency is negligible, even though the Company takes precautionary measures like forward booking for payments of imports. The management takes due care for the credit risk of any default in contractual obligations. Obligations of interest and decrease in sale may be the highest risk on profitability of the Company. The Country is facing non-availability of skilled manpower which may adversely affect profitability of the Company.

38 Additional Regulatory Information as required by Schedule III of the Companies Act, 2013

_aj All title deeds of immovable properties (other than the properties where the company is the lessee and the lease agreement are duly executed in favour of lessee), are held in the name of company.

b) The company has not revalued its property, plant and equipment during the year.

c) The company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties, either severally or jointly with any other person.

e) During the year there is no intangible assets under development hence ageing schedule is not applicable.

f) There is no proceedings that have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

g) The company is having cash credit limit from bank which is secured against current assets. The company is required to submit quarterely returns or statements with bank. However there

is a difference in the value of quarterly returns or statements submitted with bank and the value as appearing in the books of accounts. Detailed reconciliation of the said difference is

shown in below mentioned table :-

h) The company is not declared willful defaulter by any bank or financial institution or other lender.

i) The company is not having any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

j) During the year there were no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond statutory period.

k) Provisions of clause (87) of section 2 of the act read with Companies (Restriction on number of Layers) Rules, 2017 regarding compliance with number of layers of companies is not applicable to the company.

l) Details of ratio is provided in note 38.1.

m) During the year the company has not proposed any Scheme of Arrangements.

n) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

o) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

p) During the year the company is not having any unrecorded transactions that are surrendered or disclosed as income during tax assessments under Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961) and there is no previously unrecorded income and related assets that have been properly recorded in the books of accounts during the year.

r) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

s) The company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

As per our report of even date attached

For, Sweta Patel & Associates For and on behalf of the Board

Chartered Accountants Firm Registration No. 139165W

Sweta H. Patel Dinesh Bilgi Neel Bilgi Chirag Bilgi

(Partner) (DIN:00096099) (DIN:00096180) (DIN:02094970)

Membership No. : 154493 Mg. Director & CFO Mg. Director Mg. Director

UDIN :

Place : Chhatral

_{Date : 27-05-2023} ^Balkrishna _{Kairavi Bilgi}

Makwana

(DIN:00287931) (ACS:21519)

Director Company Secretary

Place : Chhatral Date : 27-05-2023

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Mar 31, 2015

1. Share Capital :

Terms / Rights attached to Shares

Equity Shares : The Company has only one class of equity shares having at par value of Rs. 10/- per share. Equity shares are pari passu in all respects and each shareholder is eligible for one vote per share held. The Company declare and pays dividend in indian rupees. The dividend proposed by the board of Directors is subject to the approval of the shareholders at the ensuing AGM. In the event of liquidation of the company, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts in proportion to their shareholding.

2. The figures are rounded off to the nearest rupee and previous year figures are regrouped and rearranged, wherever necessary to make them comparable with current year figures.

3. Trade Receivables are subject to conformation from parties and reconciliation if any.

4. In the opinion of the Board, the current assets, loan and advance have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

5. Segment Reporting

Company has only one primary segment of manufacturing and sale of labels and does not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 "Segment Reporting".

6. Related Party Transactions

(A) Related Parties and nature of relationship

Sr.No. Name of Related Party Description of Relationship

1. Mr. Dinesh Bilgi Managing Director & CFO

2. Mr. Neel Bilgi Managing Director

3. Mr. Chirag Bilgi Managing Director

4. Mr. Pragnesh K. Shah Executive Director

5. Mrs. Kairavi Bilgi Company Secretary

Directors

1. Mr. Laxman C. Tilani Director

2. Mr. Dinesh H. Pande Director

Entities in which relatives of Key Managerial Personnel are interested

1. ANC Systems LLP Firm (Company) in which (Earlier ANC Systems Pvt Ltd) (was) relative of a Director is Partner (Director)

2. Latha Services LLP Firm (Company) in which (Earlier Latha Services Pvt Ltd) (was) relative of a Director is Partner (Director)

3. Ultra Polydye Pvt. Ltd. Company in which relative of a Director is member

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Mar 31, 2014

As at 31st As at 31st March,2014 March,2013

1. Contingenting Liabilities of

(a) Letter of credit by bank NIL NIL

(b) Disalloawance of expenses under Income Tax Act for 1351672 1351672 A.Y.-1996-97 matter pending with High Court of Gujarat

2. The figures are rounded off to the nearest rupee and are regrouped or rearranged, wherever necessary to make them comparable.

3. Sundry Debtors, Sundry Creditors, Loans and Advances, Deposite and Personal Accounts either debit or credit are subject to conformation from parties and reconciliation if any.

4. In the opinion of the Board, the current assets, loan and advance have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

5. Segment Reporting

Company has only one primary segment of manufacturing and sale of labels and doses not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India.

6. Related Party Transactions

(A) Related Parties and nature of relationship

Sr. No. Name of Related Party Description of Relationship

1. Mr. Dinesh Bilgi Chairman & Managing Director

2. Mr. Neel Bilgi Jt.Managing Director

3. Mr. Chirag Bilgi Jt.Managing Director

4. Mr. Pragnesh K. Shah Executive Director

5. Mr. Laxman C. Tilani Director

6. Mr.Dinesh H. Pande Director

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Mar 31, 2013

1. Contingenting Liabilities of

(a) Letter of credit by bank NIL 1423829

(b) Disalloawance of expenses under Income Tax Act for A.Y.-1996-97 matter pending with High Court of Gujarat 13,51,672 13,51,672 2. The figures are rounded off to the nearest rupee and are regrouped or rearranged, wherever necessary to make them comparable.

3. Sundry Debtors, Sundry Creditors, Loans and Advances, Deposite and Personal Accounts either debit or credit are subject to conformation from parties and reconciliation if any.

4. In the opinion of the Board, the current assets, loan and advance have a value on realisation in ordinary course of business at least equal ot the amount at which they are stated.

5. Employee Benefits in respect of Gratuity and Leave encashment - Particular as per Accounting Standard AS 15

6. Segment Reporting

Company has only one primary segment of manufacturing and sale of labels and doses not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India.

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Mar 31, 2012

1. Contingent Liabilities of

Amount in Rupees 2011-12 2010-11

(a) Letter of credit by bank 14,23,829 NIL

(b) Disallowance of expenses under Income Tax Act for A.Y.- 1996-97 13,51,672 13,51,672 matter pending with High Court of Gujarat

2. The figures are rounded off to the nearest rupee and are regrouped or rearranged, wherever necessary to make them comparable.

3. Sundry Debtors, Sundry Creditors, Loans and Advances, Deposits and Personal Accounts either debit or credit are subject to conformation from parties and reconciliation if any.

4. In the opinion of the Board, the current assets, loan and advance have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

5. Segment Reporting :

Company has only one primary segment of manufacturing and sale of labels and doses not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India.

6. Related Party Transactions

(A) Related Parties and nature of relationship

Sr.No. & Name of Related Party Description of Relationship

1. Mr. Dinesh Bilgi Chairman & Managing Director

2. Mr. Neel Bilgi Executive Director

3. Mr. Pragnesh K. Shah Executive Director

4. Mr. Chirag Bilgi Executive Director

5. Mr. Laxman C. Tilani Director

7. Bad debts of Rs. 17,05,096/- in Note no. 23 of Financial Statement includes Rs. 8,77,487/- in respect of Export Debts for which Application to get approval for write-off from Authorised Dealer is made on 11/05/2012 as required under FEMA. Approval, for which is yet to be received.

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Mar 31, 2011

I. AMOUNT IN RUPEES

31/03/2011 31/03/2010

i) Contingent Liabilities of

(a) Letter of Credit by bank - 9,11,250

(b) Disallowance of expenses under Income Tax Act for A. Y-1996-97 13,51,672 13,51,672 matter pending with High Court of Gujarat

[The company is not required to obtain any license under Industrial (Development & Regulation) Act, 1951 for the products being manufactured by the company]

ii) The figures are rounded off to the nearest rupee and are regrouped or rearranged, wherever necessary to make them comparable.

iii) Company provides for depreciation on the fixed assets, at the rates specified in Schedule XIV of the Companies Act,1956, on straight line method. (Windmills - Written Down Value)

iv) Sundry Debtors, Sundry Creditors, Loans and Advances, Deposits and Personal Accounts either debit or credit are subject to confirmation from parties and reconciliation if any.

v) In the opinion of the Board, the current assets, loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

vi) Segment Reporting

Company has only one primary segment of manufacturing and sale of labels and does not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India.

This information as required to be disclosed has been determined to the extent such parties have identified on the basis of information available with the Company. Further, pervious year information is not available with the Company.

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Mar 31, 2010

AMOUNT IN RUPEES

31/03/2010 31/03/2009

i) Estimated amount of contracts --- --- remaining to be executed on capital account and not provided for

ii) Contingent Liabilities of

(a) Letter of Credit by bank 9,11,250 ---

(b) Disallowance of expenses under Income Tax Act for A. Y-1996-97 13,51,672 13,51,672 matter pending with High Court of Gujarat

iii) The figures are rounded off to the nearest rupee and are regrouped or rearranged, wherever necessary to make them comparable.

iv) Company provides for depreciation on the fixed assets, at the rates specified in Schedule XIV of the Companies Act, 1956, on straight line method. (Windmills - Written Down Value)

v) Sundry Debtors, Sundry Creditors, Loans and Advances, Deposits and Personal Accounts either debit or credit are subject to confirmation from parties and reconciliation if any.

vi) In the opinion of the Board, the current assets, loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

vii) Segment Reporting

Company has only one primary segment of manufacturing and sale of labels and does not fall under secondary segment. In view of this, details of segment information is not given as required by AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India.

viii) Related Party Transactions

(A) Related parties and nature of relationship

Sr. No. Name of related Party Description of relationship

1. Mr. Dinesh Bilgi Managing Director

2. Mr. Neel Bilgi Executive Director

3. Mr. Pragnesh Shah Executive Director

4. Mr. Chirag Bilgi Relatives of key Management Personnel

(C) Related party relationship is as identified by the Company on the basis of information available with them and relied upon by the Auditors.

ix) Disclosure in accordance with Part I of Schedule VI of Companies Act, 1956 in respect of Micro, Small arid Medium Enterprises:

(Amount in Rupees)

Sr. No. Particulars 2009-10 2008-09

a. Principal amount remaining unpaid NIL NIL

b. Interest due thereon NIL NIL

c. Interest paid by the Company in term of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 NIL NIL

d. Interest due and payable for the period of delay in payment NIL NIL

e. Interest accrued and remaining unpaid NIL NIL

f. Interest remaining due and payable even in succeeding years. NIL NIL

This information as required to be disclosed has been determined to the extent such parties have identified on the basis of information available with the Company. Further, perivous year information is not available with the Company.