TEXMACO RAIL Auditors Report

To the members of TEXMACO RAIL & ENGINEERING LIMITED Report on the Standalone Ind AS Financial Statements


We have audited the accompanying standalone Ind AS financial statements of TEXMACO RAIL & ENGINEERING LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Standalone Ind AS Financial Statements").


Management’s Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive Income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standard (Ind AS) specified under Section 133 of the Act, read with Rules issued there under. 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 accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Auditors’ Responsibility


Our responsibility is to express an opinion on these standalone Ind AS 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 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 standalone Ind AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS 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 standalone Ind AS financial statements.


Opinion


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, including the Ind AS of the financial position of the


Company as at March 31, 2017, and its financial performance including other comprehensive Income, its cash flows and the changes in equity for the year ended on that date.


Report on Other Legal and Regulatory Requirement


1. As required by the Companies (Auditor’s Report) Order, 2016 ("the order") issued by the Central Government of India in terms of Subsection (11) of Section 143 of the Act, we give in the "Annexure A", a statement on the matters 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 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.


(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 those books ;


(C) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of the changes in equity dealt with by this Report are in agreement with the books of account;


(d In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rule issued there under;


(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;


(f) With respect to the adequacy of the Internal Financial Controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and


(g) 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 in its financial statements - Refer note 1.36 of the standalone Ind AS financial statements.


ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.


iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.


iv. The company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from Nov 8, 2016 to Dec 30, 2016. Best on Audit procedure and relying on the Management representation, be report that disclosures are in accordance with the books of accounts maintained by the Company. Refer note 1.65 to the Standalone Ind AS Financial Statements


(i) (a) The Company has maintained proper records


Annexure - A To the Independent Auditors’ Report to the Members of TEXMACO RAIL & ENGINEERING LIMITED as referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Report of even date



showing full particulars including quantitative details and situation of Property, Plant & Equipments.


(b). As explained to us, the Company has a system of verifying all its major Property, Plant & Equipments over a period of three years. The Property, Plant & Equipments so scheduled for verification during this year have been physically verified. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of accounts.


(c) The title deeds of immovable properties demerged/


marged to the Company under the scheme of arrangement approved by the Honble High Court of Calcutta and Delhi are held in the name of erstwhile Texmaco Limited and Kalindee Rail Nirman (Engineers) Limited.


(ii) As per information furnished, inventories have been physically verified by the management at reasonable intervals and the discrepancies noticed have been properly dealt with in the books of accounts.


(iii) a) The Company has granted unsecured loan to the


Companies covered in the register maintained under section 189 of the Companies Act, 2013 which is not prejudicial to the interest of the Company.


b) The schedule of repayment of Principal and Interest of the above loan has been stipulated and the Company is regular in receipt of the same.


c) There is no amount over due of more than 90 days in respect of recovery of principal and interest of the above loan.

























Name of the Statute



Nature of the dues



Amount (h Lakhs)



Period to which amount relates



Forum where dispute is pending



The Central Excise Act 1944



Various issues of Central Excise and Service Tax



H 3122.85



1986-2012



1. Jurisdictional Commissioner of Central Excise.


2. CESTAT


3. Commissioner (Appeal)


4. Jurisdictional Commissioner of Service Tax.



Service Tax under the Finance Act 1994



H13.51



2004-2010




(iv) In our opinion & according to the information given to us, in respect of loans, investments, guarantees and security provisions of section 185 and 186 of the Companies Act 2013, have been complied with.


(v) The Company has not received any deposits from the public hence clause 3 (v) of the Companies (Auditor Report) Order 2016 is not applicable to the company.


(vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete


(vii) a) According to the information and explanations given


to us and records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, custom duty, excise duty, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed statutory dues were in outstanding as at 31st March, 2017 for a period of more than six months from the date they became payable.


b) According to the records of the Company, the dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited on account of any dispute and the forum where the dispute are pending, are as under:


(viii) There are no outstanding dues to a financial institution or debenture holders. In respect of outstanding loan from bank there is no default of payment.


(ix) The Company has not raised any money by way of Initial Public Offer or Further Public Offer (Including debt instruments). Term Loan raised in earlier year were applied for the purpose for which it was borrowed.


(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud by the Company or any fraud on the Company by its officers and employees has been noticed or reported during the course of our audit.


(xi) The managerial remuneration paid or provided to the Executive Chairman is in excess of the requisite approval mandated by the provisions of section 197 read with Schedule V to the Companies Act for which the Company has to make an application to The Ministry of Corporate Affairs for its waiver, post approval of its shareholders in the General Meeting. Further, application to The Ministry of Corporate Affairs for waiver of excess managerial remuneration paid to its Executive Directors for the financial year 2015-16 is still pending with The Ministry.


(xii) The Company is not a Nidhi Company, hence clause 3 (xii) of the Companies (Auditor’s Report) Order, 2016 is not applicable.


(xiii) All transactions of the company with the related parties are in compliance with sections 177 & 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements etc., as required by the applicable accounting standards.


(xiv)The Company has not made any Preferential allotment or Private Placement of shares or fully or partly convertible debentures during the year under review and hence clause 3 (xiv) of the Companies (Auditor’s Report) Order, 2016 is not applicable.


(xv) The Company has not entered into any non-cash transactions with directors or persons connected with him and hence, clause 3 (xv) of the Companies (Auditor’s Report) Order, 2016 is not applicable.


(xvi)The Company is not a non-banking financial company and hence the company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934.


Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")


We have audited the Internal Financial Controls over financial reporting of TEXMACO RAIL & ENGINEERING LIMITED ("the Company") as of March 31, 2017 in conjunction with our audit of the Ind AS 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Auditors’ Responsibility


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting


Meaning of Internal Financial Controls Over Financial Reporting


A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that


(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;


(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and


3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Opinion


In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.


For K. N. Gutgutia & Co.


Chartered Accountants


Firm Registration Number 304153E


P.K. Gutgutia


Kolkata Partner


22nd May, 2017 Membership No.6994

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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