The Members of COMMEX TECHNOLOGY LIMITED
Report on the Financial Statements
We have audited accompanying financial statements of COMMEX TECHNOLOGY LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 and theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary 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 Section134(5) of Companies Act 2013 ("the Act") with respect to the 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 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 financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
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 accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on standalone financial statements.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
1. in the case of the Balance Sheet of the state of affairs of the Company as at March312016;
2. in the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and
3. in the case of Cash Flow Statement of the cash flows for the year ended on thatdate.
Emphasis of Matters:
1. We draw attention to note no. 20(8) of financial statements regarding non-payment ofVAT liability of Rs.110.22 Lakhs on account of advice received by the company.
2. We draw attention to note no. 20(9) of financial statements regarding no movement inCWIP. As per management said CWIP is realisable in cash or kind of the value stated infinancial statements.
3. We draw your attention to note no. 20(10) of the financial statements the Companyhas temporarily suspended all its business activities and also substantially depreciated /disposed off majority of fixed assets. As informed to us the Company has positive networth and the Company has revived business since balance sheet date in view of that thefinancial statement have been prepared on going concern basis.
4. Trade receivables trade payables other current liabilities loans and advances aresubject to confirmation and reconciliation if any. In the absence of such confirmationswe are unable to comment on the said balances as at 31st March 2016.
Our opinion is not modified in respect of these matters.
1. The Company has an investment amounting to Rs. 30 crores in Universal CommodityExchange (UCX) an associate company. The management has informed us that the financialsof UCX (Associate Company) are unavailable. Hence we are unable to comment on theprovision for diminution in the value of the investment to be made if any.
However our opinion is not qualified in respect of this matter.
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 terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
a) We have obtained all the information and explanations which to the best of ourknowledge 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 appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account.
d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on March312016 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on March 312016 from being appointed as a director in termsof Section 164 (2) of the Act; and
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:
1. The Company did not have any pending litigations as at March 31 2016 that wouldimpact the financial position of the Company.
2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
3. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31st March2016.
For Kanu Doshi Associates LLP
Firm Registration Number: 104746W/W100096
Membership No: 102888
Date: 30th May2016
ANNEXURE 'A' TO THE AUDITOR'S REPORT
Referred to in paragraph 1 of' Report on other Legal and Regulatory Requirements' inour Report of even date on the accounts of COMMEX TECHNOLOGY LIMITED for the year endedMarch 31 2016.
i. (a) The Company is in the process of maintaining proper records showing fullparticulars including
quantitative details and situation of fixed assets.
(b) As explained to us all fixed assets have been physically verified by themanagement at reasonable intervals during the year and no material discrepancies werenoticed on such verification.
(c) As explained to us and after reviewing the fixed assets of the Company there arefixed assets comprising of immovable property and hence there are no instances of titledeeds of immovable properties that are held in the name of the company.
ii. According to the information and explanations given to us the Company does nothave any inventory. Accordingly the provisions of paragraph 3(ii) of the Order are notapplicable to the Company.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained underSection 189 of the Companies Act 2013 ('the Act'). Hence clause (iii) of para 3 of CARO2015 is not applicable.
iv. According to information and explanation provided to us in respect of loans grantedduring the year the company has not granted any loans to directors hence section 185 isnot applicable. However during the year the company has granted loan to a company withinthe limits prescribed under section 186 (2) specified under the Companies Act 2013.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the rules framed there under to the extentnotified and therefore clause (v) is not applicable.
vi. The Central Government has not prescribed the maintenance of cost records undersub-Section (1) of Section 148 of the Companies Act for any of the products of theCompany.
viii (a) According to the information and explanations given to us and on the basis ofrecords produced before us the Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance income tax sales tax wealth tax service tax duty of custom duty ofexcise duty value added tax cess and other material statutory dues applicable to itexcept as disclosed below. According to the information and explanations given to us noundisputed arrears of statutory dues were outstanding as at March 312016 for a period ofmore than six months from the date they became payable except following:
|Name of the statute ||Nature of dues ||Amount (in Rs) ||Period to which the amount relates |
|Income Tax Act 1961 ||Income tax ||16458109 ||AY 2013-14 |
|Income Tax Act 1961 ||Income tax ||5209058 ||AY 2014-15 |
| ||Total ||21667167 || |
As reported in Emphasis of Matters paragraph as per management VAT liabilityamounting to Rs. 110.22 Lacs recognised in the financial statements is not payable.
(b) here are no dues in respect of Income Tax Sales Tax Wealth Tax service tax dutyof custom duty of excise duty value added tax and cess that have not been deposited withappropriate authorities on account of any dispute.
(c) The amount required to be transferred to Investor Education and Protection Fund hasbeen transferred within the stipulated time in accordance with the provisions of theCompanies Act 2013 and the rules made there under.
viii. According to the records of the Company examined by us and information andexplanation given to us the Company has not taken any loan from financial institutionbank government or debenture holders as at the Balance Sheet date. Hence clause (viii)of para 3 of CARO 2016 is not applicable.
ix. According to the information and explanations given to us and the records examinedby us the Company has not raised any money during the year by way of public issue/further offer including debt instruments and term loan given any guarantee for loans takenby others from banks or financial institutions during the year.
x. To the best of our knowledge and according to the information and explanation givento us no fraud by the Company and no fraud on the company by its officers or employeeshas been noticed or reported during the year.
xi. The managerial remuneration paid by the company is in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the CompaniesAct 2013.
xii. The Company is not a Nidhi Company.
xiii. The Company has complied with the provisions of section 177 and 188 of CompaniesAct 2013 in respect of transactions with the related party and has disclosed the detailsin the Financial Statements in accordance with the accounting standards.
xiv. The company has not made any preferential allotment / private placement of sharesor has fully or partly convertible debentures during the year under review.
xv. The company has not entered into any non-cash transactions with directors orpersons connected with him during the year under review.
xvi. According to the information and explanations given to us the company is notrequired to obtain registration under section 45 IA of the Reserve Bank of India Act 1934and therefore clause XVI is not applicable.
For Kanu Doshi Associates
Firm registration No: 104746W/W100096
Membership No: 102888
Date: 30th May2016
ANNEXURE 'B'TO THE 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 CommexTechnology Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Board of Directors are 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 ('ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 riskthat 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 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.
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 31 March 2016 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 Kanu Doshi Associates LLP
Firm registration No: 104746W/W100096
Membership No: 102888
Date: 30th May2016