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Castex Technologies Ltd.

BSE: 532282 Sector: Auto
NSE: CASTEXTECH ISIN Code: INE068D01021
BSE 00:00 | 20 Sep 0.54 0.01
(1.89%)
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0.51

HIGH

0.55

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0.51

NSE 00:00 | 20 Sep 0.45 -0.05
(-10.00%)
OPEN

0.55

HIGH

0.55

LOW

0.45

OPEN 0.51
PREVIOUS CLOSE 0.53
VOLUME 17079
52-Week high 1.62
52-Week low 0.47
P/E
Mkt Cap.(Rs cr) 20
Buy Price 0.51
Buy Qty 1124.00
Sell Price 0.55
Sell Qty 3000.00
OPEN 0.51
CLOSE 0.53
VOLUME 17079
52-Week high 1.62
52-Week low 0.47
P/E
Mkt Cap.(Rs cr) 20
Buy Price 0.51
Buy Qty 1124.00
Sell Price 0.55
Sell Qty 3000.00

Castex Technologies Ltd. (CASTEXTECH) - Auditors Report

Company auditors report

To the Members of

Castex Technologies Limited

Report on the Standalone IND AS Financial Statements

We have audited the accompanying standalone IND AS financial statements of CastexTechnologies Limited ('the Company') which comprise the balance sheet as at 31stMarch 2018the statement of profit and loss[including other comprehensive income] thestatement of cash flows and the statement of changes in equity for the year then endedand a summary of the significant accounting policies and other explanatoryinformation(hereinafter referred to as "standalone Ind AS financial statements")

Management's Responsibility for the standalone IND AS Financial Statements

The management and company's board of directors is responsible for the mattersspecified in section 134(5) of the Companies Act 2013 ("the Act") with respectto the preparation of these standalone IND AS financial statements that give a true andfair view of the financial position financial performance [including other comprehensiveincome] cash flows and changes in equity of the company in accordance with the accountingprinciples generally accepted in India including the Indian accounting standards [Ind AS]prescribed under section 133 of the Act read with companies (Indian Accounting Standards)rules 2015.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the companyand for preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone IND AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunderand the Orderissued under section 143(11) of the Act.

We conducted our audit of the standalone IND AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ins AS financial statements are freefrom material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone IND AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone IND AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the company's preparation of the standalone IND AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the company'smanagement and directors as well as evaluating the overall presentation of the standaloneIND AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone IND AS financialstatements.

Our Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone IND AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the IND AS of thestate of affairs of the company as at March 31 2018 and itsProfit and loss account forthe year ended March 31 2018 total comprehensive income its cash flows and the changesin equity for the year ended on that date.

Emphasis of Matter

Notwithstanding anything contained in the standalone Ind AS financial statements ofCastex Technologies Limitedas on 31.03.2018 affects the true & fair opinion over thesame but following is a list of matters considered significant for the users of thestandalone Ind AS financial statements adequately disclosed by the management:

A corporate insolvency resolution process ("CIRP") has been initiated againstCastex Technologies Limited ('the Company') vide an order of Chandigarh bench of theNational Company Law Tribunal (NCLT) dated December 20 2017 under the provisions of theinsolvency and bankruptcy code 2016 (Code). Pursuant to the order the power of the Boardof directors stands suspended and are exercisable by MrDinkar T. Venkatasubramanian whowas appointed as interim resolution professional (IRP) by the NCLT vide order datedDecember 20 2017 and was consequently confirmed as Resolution Professional (RP) by theCommittee of Creditors (CoC) in its meeting held on January 12 2018. Accordingly Mr.Dinkar T. Venkatasubramanian took control of management and operations of the company. Asthe powers of the Board of Directors had been suspended the above results have not beenadopted by Board of Directors.However These Standalone Ind AS financial statements havebeen signed by Sanjay Arora (Whole Time Director) and taken on record by the RP..

1. The company has been continuously making losses consequently its net worth isnegative and thecompany's total liabilities exceeded its total assets. This indicates theexistence of materialuncertainty that may cast significant doubt on the company's abilityto continue as a going concern. However in view of the Corporate Insolvency ResolutionProcess in respect of the company which is in progress the accounts have been preparedon a going concern basis (Refer Note [2.1 ] to Financial Statements).

2. Considering the current operating level of the company and the ongoing CIRP it isnot possible to determine:

a. Impairment if any in the economic value of fixed assets capital work in progressand tools & die;

b. Diminution if any in the value of investment. (Refer Note [2.82.132.14 ] toFinancial Statements)

3. In respect of various claims submitted by the financial operational & othercreditors of the Company to the RP pursuant to Insolvency and Bankruptcy Code 2016 thatare currently under consideration / verification/ reconciliation. Pending finalization ofresolution plan we are unable to comment on the consequential impact if any on theaccompanying statement [Refer Note [2.1 ] to financial Statements]

4. Trade receivables loans & advances and other recoverable at March 31 2018which also includes balances from the group entities are subject toconfirmation/reconciliation and recoverability assessment thereof is under process. (ReferNote [2.11 ] to Financial Statements)

5. In terms of sections 25(2)(c) and 28(1)(a) of IBC 2016 the CoC has approved theraising of interim finance in its meeting held on 12th March 2018 Accordingly theCompany has entered into an agreement with ECL Finance Limited a Mumbai based subsidiaryCompany of Edelweiss Financial Services Limited and availed interim finance facility up toINR 300000000 (Rupees Thirty Crores) under the Facility Agreement dated 11 April2018 (Refer Note 2.12 in significant accounting policies)

6. The financial statements for the year ended 31 March 2017 was carried out andreported by Manoj Mohan & Associates. whose report has been furnished to us by themanagement and which has been relied upon by us for the purpose of our audit.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in exercise of powers conferred by sub section(11) of section 143 of the act we give in annexure A a statement on the mattersspecified in paragraph 3 & 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 bestof 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 thecompany so far as it appears from our examination of those books;

(c) The balance sheet the statement of profit and loss [including other comprehensiveincome]the cash flow statement and the statement of changes in equity dealt with by thisreport are inagreement with the relevant books of account;

(d) In our opinion the aforesaid standalone IND AS financial statements comply withthe Indian Accounting Standards specified under section 133 of the Act read with therelevant rules there under;

(e) On the basisof the written representations received fromthe directors as on 31stMarch2018 and taken on record by theboard of directors none of the directors is disqualifiedas onMarch 31 2018 from being appointed as a director in termsof Section 164 (2) of theAct; 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". Our report expresses an unmodified opinion onthe adequacy and the operating effectiveness of the company's internal financial controlsover financial reporting; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 as amendedaccording to the explanations and information given to us:

i. The company has disclosed the impact of pending litigations on its financialposition in its standalone IND AS financial statements [Refer Note no. 3.27.5].

ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation andProtection Fund by the company.

For Raj Gupta & Co

Chartered Accountants

Firm's registration number: 000203N

Gunjandeep Singh

[Partner]

Membership Number: 529555

Place : New Delhi

Dated : JUNE 5 2018

Annexure - A to the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone IND AS financial statements for the year ended 31st March 2018.

I. In respect of fixed assets:

a. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. As explained to us fixed assets according to the practice of the company havebeen physically verified by the management at reasonable intervals. the frequency ofphysical verification of fixed assets is reasonable having regard to the size of theCompany and nature of its assets. According to the information and explanation given to us no material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company. However none is made available to us as they are pledgedwith the financial institutions.

II. In respect of inventories: We have been informed that the inventories arephysically verified during the period by the Company at reasonable intervals. Thefrequency of physical verification in our opinion is reasonable having regard to thesize of the company and nature of its business. The discrepancies noticed on verificationbetween the physical inventories and the book records were not material in relation to theoperation of the company and the same have been properly dealt with in the books ofaccount.

III. The company during the yearhas not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013 (Rs.the Act').Accordinglyparagraph 3(iii) of the Order is not applicable to the company.

IV. In our opinion and according to the information and explanations given to us thecompany has complied during the year with the provisions of section 185 and 186 of theAct with respect to the loans investments guarantees and security.

V. Since the company has not accepted any deposit from public the directives issued bythe Reserve Bank of India and the provisions of section 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed there under with regard to thedeposits accepted from the public are not applicable.

VI. The Central Government has prescribed the maintenance of cost records under section(1) of section 148 of the Companies Act and on the basis of recordsproduced before us forour verification; we are of the opinion that prima facie the prescribed accounts andcost records have been maintained. However we are neither required to carry out nor havecarried out any detailed examination of such accounts & records.

VII. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company the company has not beenregularindepositing undisputed statutory dues including provident fund employees state insuranceincome-tax sales tax service tax duty of customs duty of excise value added taxcess Goods and Services Tax and other statutory dues with appropriate authorities duringthe year ended 31st March 2018. The outstanding dues as on the date of thebalance sheet i.e. March31 2018 were Rs.2931.14 Lakhs. According to information andexplanation given to us arrears of undisputed statutory dues outstanding for a period ofmore than 6 months as on March 312018 were Rs. 1512.19 Lakhs.

(b) According to the information and explanation given to us and as per ourverification of records of the company the company has not paid/deposited followingstatutory dues on account of disputes:

S.No. Name of Statute Period to which it pertains Forum where dispute is pending Amount (Rs. In Lakh)
1 Excise/Service Tax 2008 to 2014 Commissioner Central Excise (Appeals) 98.21
2 Income Tax 2006 to 2016 Income Tax Appellate Tribunals 1688.53
3 Sale Tax 2015-16 Appeals under process 2.55
Total 1789.29

VIII. Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the management A corporate insolvency resolution process ("CIRP") has beeninitiated against the company vide an order of Chandigarh bench of the National CompanyLaw Tribunal (NCLT) dated December20 2017 under the provisions of the insolvency andbankruptcy code 2016 (Code). Pursuant to the order the power of the Board of directorsstands suspended and are exercisable by Mr Dinkar T. Venkatasubramanian who was appointedas interim resolution professional (IRP) by the NCLT vide order dated December22 2017 andwas consequently confirmed as Resolution Professional (RP) by the Committee of Creditors(CoC) in its meeting held on January12 2018.

IX. According to the information and explanations given to us and as per ourverification of the records of the company the company during the year has not raisedmoneys by way of initial public offer or further public offer(Including debt instruments).The term loans availed by the company have been applied for the purpose for which theloans were obtained.

X. According to the information and explanations given to us no fraud by the companyor on the company by its officers or employees has been noticed or reported during theYear ended 31st March 2018.

XI. According to the information and explanations give to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

XII. In our opinion and according to the information and explanations given to us thecompany is not a Nidhi company. Therefore the provisions of Clause 3 (xii) of the Orderare not applicable to the company.

XIII. According to the information and explanations given to us and as per ourverification of the records of the company all transactions with the related parties arein compliance with the Sections 177 and 188 of the Companies Act 2013 where applicableand the details have been disclosed in theIND ASfinancial statements as required by theapplicable accounting standards.

XIV. According to the information and explanations given to us and as per ourverification of the records of the company the company has not made any preferentialallotment of shares.

XV. According to the information and explanations given to us and as per ourverification of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofClause 3 (xv) of the order are not applicable to the company.

XVI. In our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3 (xvi) ofthe order are not applicable to the company.

For Raj Gupta & Co

Chartered Accountants

Firm's registration number: 000203N

Gunjandeep Singh

[Partner]

Membership Number: 529555

Place : New Delhi

Dated : JUNE 5 2018

Annexure – B to the Independent Auditors' Report

Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") of CastexTechnologies Limited

We have audited the internal financial controls over financial reporting of CastexTechnologies Limited ("the Company") as of 31st March 2018 inconjunction with our audit of the standalone IND AS financial statements of the companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The management and company's board of directorsare responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ("theGuidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation 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 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 both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 risk that 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 standalone IND AS financial statements whether due to fraudor error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the company's internal financialcontrols system over 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.

Opinion

A corporate insolvency resolution process ("CIRP") has been initiated againstCastex Technologies Limited ('the Company') vide an order of Chandigarh bench of theNational Company Law Tribunal (NCLT) dated December 20 2017 under the provisions of theinsolvency and bankruptcy code 2016 (Code). Pursuant to the order the power of the Boardof directors stands suspended and are exercisable by Mr Dinkar T. Venkatasubramanian whowas appointed as interim resolution professional (IRP) by the NCLT vide order datedDecember 20 2017 and was consequently confirmed as Resolution Professional (RP) by theCommittee of Creditors (CoC) in its meeting held on January 12 2018. The power of theBoard of Directors have been suspended and assigned to Resolution Professional.

In our opinion to the best of our information and according to the explanations givento us the company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31stMarch 2018 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 Raj Gupta & Co

Chartered Accountants

Firm's registration number: 000203N

Gunjandeep Singh

[Partner]

Membership Number: 529555

Place : New Delhi

Dated : JUNE 5 2018