We have audited the accompanying consolidated financial statements of
Commex Technology Limited (the Holding Company) and its subsidiaries
(the Holding Company and its subsidiaries constitute ''the Group''),
comprising of the consolidated Balance Sheet as at March 31, 2015, the
consolidated Statement of Profit and Loss and the consolidated Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information (hereinafter
referred to as the Consolidated Financial Statements). The financial
statements for the year ended March 31, 2014 have been audited by
another firm of Chartered Accountants. We have relied on the same for
the purpose of this report.
Management''s Responsibility for the Consolidated Financial Statements
The Holding Company''s Board of Directors are responsible for the
preparation of these consolidated financial statements in terms of the
requirements of the Companies Act, 2013 (''the Act'') that give a true
and fair view of the consolidated financial position, consolidated
financial performance and consolidated cash flows of the Group 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. The
respective Board of Directors of the Companies included in the Group
are responsible for maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the
respective assets of the Companies included in the Group and for
preventing and detecting frauds and other irregularities; the selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting 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 error,
which have been used for the purpose of preparation of these
consolidated financial statements by the Board of Directors of the
Holding Company, as aforesaid.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
While conducting the 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 there under.
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 consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the consolidated financial
statements. The procedures selected depend on the auditor''s judgment,
including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal financial
control relevant to the Holding Company''s preparation and presentation
of the consolidated 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 Holding Company has in place an adequate internal financial
control 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 Holding Company''s Board of Directors,
as well as evaluating the overall presentation of the consolidated
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in sub paragraphs of the Other Matters paragraph below, is
sufficient and appropriate to provide a basis for our audit opinion on
the consolidated financial statements.
Basis of Qualified opinion
The Holding Company had recognized MAT credit entitlement of Rs. 1.98
Crores which has not yet been paid. In our view, pending such payment
of taxes, recognition of MAT in the Financial Statements is not
appropriate. Had the Company not recognized MAT as aforesaid, the
profit for the financial year would have been reduced by Rs 1.98
Based on our audit and financial statements compiled and furnished by
the management for one component as explained in point 2 of other
matters below. In our opinion, Subject to effects of matter described
in Basis of Qualified opinion paragraph above and read with points
mentioned in Emphasis of Matters paragraph below, the aforesaid
Consolidated 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:
1. in the case of the Consolidated Balance Sheet, of the state of
affairs of the Company as at March 31, 2015;
2. in the case of the Consolidated Statement of Profit and Loss, of
the profit for the year ended on that date; and
3. in the case of Consolidated Cash Flow Statement, of the cash flows
for the year ended on that date.
Emphasis of Matters:
1. We draw attention to note no. 22(9) of financial statements
regarding non-payment of VAT liability of Rs. 1.10 crores on account of
legal advice received by the company.
2. We draw attention to note no. 22(12) of financial statements
regarding no movement in CWIP. As per management, said CWIP is
realizable in cash or kind, of the value stated in financial statement.
3. Trade receivable, trade payable, other current liabilities. Loans
and advances are subject to confirmation and reconciliation, if any. In
the absence of such confirmations we are unable to comment on the said
balances as at 31 March, 2015.
4. During the year ended March 31,2015, the company has charged
depreciation on Furniture & Fixtures at a different useful life then
useful life as specified under schedule II of the Companies Act, 2013.
The depreciation on the said asset has been charged during the
Financial Year 2014-15 based on management estimate of useful life.
1. The financial statements of a subsidiary IT Capital Services
Private Limited, which reflect total assets of Rs. 2,146.18 lakhs as
at 31st March, 2015, total revenue of Rs. NIL lakhs and net cash inflow
of Rs. 0.48 lakhs for the year then ended, have been audited by us.
2. We did not audit the financial statement and financial information
of one foreign subsidiary Orient Information Technology LLC FZ, whose
financial statement reflect total assets of Rs. 157.66 Lacs as at
31stMarch, 2015, having total revenue of Rs. 201.00 Lacs and net cash
inflows of Rs. 139.70 Lacs for the year then ended, as considered in
the consolidated financial statements. These financial statement is
unaudited and has been furnished to us by the Management and our
opinion on the consolidated financial statements, in so far as it
relates to the amounts and disclosures included in respect of this
subsidiary and our report in terms of sub-sections (3) and (11) of
Section 143 of the Act in so far as it relates to the aforesaid
subsidiary is based solely on such unaudited financial statement and
3. We are unable to comment upon the resultant impact, if any, on the
profit or loss, assets and liabilities of the consolidated financial
statements of the Company as at 31st March, 2015, had the subsidiary
mentioned in para 2 been audited. 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, 2015 (''the
Order''), issued by the Central Government of India in terms of Section
143 (11) of the Act, based on the comments in the auditors'' report of
the Holding Company and on the auditors'' reports issued in accordance
with the Order on subsidiary company incorporated in India, 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, to the extent
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit of the consolidated financial statements.
b) In our opinion, proper books of account as required by law relating
to preparation of the consolidated financial statements have been kept
so far as it appears from our examination of those books and the
reports of the other auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit
and Loss, and the Consolidated Cash Flow Statement dealt with by this
Report are in agreement with the relevant books of account maintained
forth purpose of preparation of the consolidated financial statements.
d) In our opinion, the consolidated 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 the written representations received from the
Directors of the Holding Company and Subsidiary Company as on March 31,
2015, taken on record by the Board of Directors of the Holding Company
and the reports of the auditors of its subsidiary companies
incorporated in India, none of the Directors of the Company and its
subsidiaries, incorporated in India is disqualified as on March 31,2015
from being appointed as a Director in terms of Section 164 (2) of the
f) With respect to the other matters to be included in the Auditors''
Report in accordance with Rule 11 of the Companies (Audit and
Auditor''s) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i) The Group has disclosed the impact of pending litigations on the
consolidated financial position of the Group in its consolidated
financial statements as of March 31,2015.
ii)The Group has made provisions in its consolidated financial
statements, as required under the applicable law or accounting
standards, for material foreseeable losses on long term contracts.
iii)There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company and its subsidiary companies incorporated in India.
As stated in paragraph 1 of our report on ''other Legal and Regulatory
requirements'' in our Independent Auditor''s Report of even date on
consolidated financial statements for the year ended 31 March 2015, our
reporting on the matter specified in para 3 & 4 of the order includes
one subsidiary incorporated in India and is based on the comments in
the respective Independent Auditor''s Report of Holding Company and its
aforesaid subsidiary company incorporated in India.
1. In respect of the fixed assets of the Company and its aforesaid
(a) The Holding Company and its aforesaid subsidiary are in the process
of maintaining proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) As explained to us, all fixed assets have been physically verified
by the management of the Holding Company and its aforesaid subsidiary
company at reasonable intervals during the year and no material
discrepancies were noticed on such verification.
2. According to the information and explanations given to us, the
Holding Company and its subsidiary nature of operations do not require
it to hold inventories. Consequently, clause 3(ii) of the order is not
3. As per information and explanations given to us, the Holding
Company and its aforesaid subsidiary have not granted any loans,
secured or unsecured, to companies, firms or other parties covered in
the Registers maintained under Section 189 of the Act by the respective
entities. Consequently, sub clause (a) and (b) of clause 3(iii) of the
order is not applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Holding Company and its aforesaid subsidiary and
the nature of their business respectively with regard to purchase of
fixed assets and the sale of services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us,, we have neither come
across, nor have been informed of, any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5. The Holding Company and its aforesaid subsidiaries have not
accepted any deposits from the public within the meaning of Sections
73,74,75 and 76 of the Act and the rules framed there under to the
6. The Central Government has not prescribed the maintenance of cost
records under sub-Section (1) of Section 148 of the Companies Act, for
any of the products of the Holding Company and its aforesaid
7. (a) According to the information and explanations given to us and on
the basis of records produced before us, the Holding Company and its
aforesaid subsidiary are generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employees'' state insurance, income tax, sales tax, wealth tax,
service tax, duty of custom, duty of excise duty, value added tax, cess
and other material statutory dues applicable to it expect disclosed
below. According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at March 31,
2015 for a period of more than six months from the date they became
payable except following:
Name of the
statute Nature of dues Amount (in Rs) Period to which
Act, 1961 Income tax 1,64,58,109 AY 2013-14
Act, 1961 Income tax 52,09,058 AY 2014-15
As said in Emphasis of Matters paragraph, as per management VAT
liability recognized in the financial statements is not applicable on
(b) There are no dues in respect of Income Tax, Sales Tax, Wealth Tax,
service tax, duty of custom, duty of excise duty, value added tax and
cess that have not been deposited with appropriate authorities on
account of any dispute.
(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made there under.
8. The Group does not have accumulated losses at the end of financial
year. The Group has not incurred cash losses on a consolidated basis
during the financial year covered by our audit and in the immediately
preceding financial year.
9. According to the records of the Holding Company and its aforesaid
subsidiary examined by us and information and explanation given to us,
the Company and its aforesaid subsidiary have not taken any loan from
financial institution, bank or debenture holders as at the Balance
Sheet date. Hence, clause (ix) of para 3 of CARO 2015 is not
10. In our opinion and according to the information and explanations
given to us, the Holding Company and its aforesaid subsidiary have not
given guarantees for loans taken by others from banks and financial
institutions. Therefore, the provisions of the clause 3 (x) of the
Order are not applicable.
11. In our opinion and according to the information and explanations
given to us, the Holding Company and its aforesaid subsidiary have not
availed any term loans during the year. Hence, the provisions of the
clause 3 (xi) of the Order are not applicable.
12. To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on the
Holding Company and its aforesaid subsidiary company incorporated in
India has been noticed or reported during the year, nor have we been
informed of any such case by the Management.
For Kanu Doshi Associates
Firm Registration Number: 104746W
Membership No: 45375
Date: May 30,2015