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Castex Technologies

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Auditor's Report (Castex Technologies) Year End : Mar '16

TO THE MEMBERS OF CASTEX TECHNOLOGIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of Castex Technologies Limited (the company), which comprise the balance sheet as at 31stMarch 2016, the statement of profit and loss, for the six months ended 31st March 2016, the cash flow statement for the six months ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The company''s board of directors is responsible for the matters specified in section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company 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. This responsibility also includes the 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 the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 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 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the company as at 31st March 2016 and its loss and its cash flows for the six months ended on that date.

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 terms of sub section (11) of section 143 of the act, we give in the annexure A , a statement on the matters specified in paragraph 3 & 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 appears from our examination of those books;

c) the balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone 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 written representations received from the directors as on 31st March 2016 and taken on record by the board of directors, none of the directors is disqualified as on 31stMarch 2016, 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 included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules, 2014, in our opinion and to best of 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 standalone financial statements(Refer to Note 2.24).

ii) The company did not have any long-term contract including derivatives contract for which there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

Annexure - A to the Independent Auditors'' Report

Re: Castex Technologies Limited

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the six months ended 31st March 2016.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations 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 our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) We have been informed that the inventories are physically verified during the period by the management at reasonable intervals. The frequency of physical verification, in our opinion, is reasonable having regard to the size of the company and nature of its business. The discrepancies noticed on verification between the physical inventories and the book records were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 during the period under review:

(a) Since the company has not granted any loans during the period under review, the provisions of this subparagraph are not applicable to the Company.

(b) In regards to the loans granted in the earlier years, the schedule of repayment is stipulated and there is no irregularity in this regard.

(c) No amount is overdue for more than 90 days as on 31st March, 2016.

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

(v) The Company has not accepted any deposits from the public. Therefore, the provisions of clause (v) of paragraph 3 of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company.

(vi) The Central Government has prescribed the maintenance of cost records under section 148 (1) of the Companies Act 2013 (''the Act''). On the basis of records produced before us for our verification, we are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts & records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records

of the company, the company has been regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with appropriate authorities during the six months ended 31st March, 2016. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at Mach 31, 2016 for a period of more than six months from the date on when they become payable.

(b) According to information and explanations given to us, and the records of the company examined by us ,dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of matters pending before appropriate authorities are as follows:

Sr.

No.

Name of the Statute

Nature of Dues

Period to which the amount relates

Forum where dispute is pending

Amount (Rs. in lacs)

1

Central Excise Act

Excise

2007

Excise Deptt.

9.12

2

Central Excise Act

Excise

2010

Tribunal Bench, Delhi

2.59

3

Central Excise Act

Excise

2010

Commissioner Appeals, Jaipur

3.41

4

Central Excise Act

Excise

2012

Commissioner Appeals, Jaipur

6.51

5

Central Excise Act

Excise

2014

Commissioner Appeals, Jaipur

37.84

6

Central Excise Act

Excise

2015

Additional Commissioner Appeals, Alwar

24.16

7

Central Service Tax

Service Tax

2007

Service tax Deptt.

0.30

8

Central Service Tax

Service Tax

2008

Service tax Deptt.

0.07

9

Central Service Tax

Service Tax

2008

Tribunal, Delhi

3.58

10

Central Service Tax

Service Tax

2008

Tribunal, Delhi

2.42

11

Central Service Tax

Service Tax

2010

Commissioner Appeals, Jaipur

0.74

12

Central Service Tax

Service Tax

2012

Commissioner Appeals, Jaipur

5.99

13

Central Service Tax

Service Tax

2015

Excise Deptt.

5.27

14

Sales Tax

Sales Tax

2014

Noida Commercial Tax Authority-UP

1.76

15

Income Tax Act, 1961

Income Tax

Block Assessment from A.Y. 2006-2007 to 2012-2013

Income Tax Appellant Tribunal, Delhi

1,455.90

Total

1559.66

(viii) According to the information and explanations given to us and as per our verification of the records of the company, the Company has defaulted in repayment of installments and interest on term loans to banks during the period. Note No. 2.27 of the financial statements contains details in this regard.

(ix) According to the information and explanations given to us, the company has not raised moneys 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 the loans were obtained.

(x) According to the information and explanations given to us, no fraud on or by the company or by its officers or employees has been noticed or reported during the six months ended 31st March 2016.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, and according to the information and explanations given to us, the company is not a Nidhi company. Therefore, the provisions of Clause 3 (xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and as per our verification of the records of the company all transactions with the related parties are in compliance with the Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and as per our verification of the records of the company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly the provisions of Clause 3 (xiv) of the order are not applicable to the Company.

(xv) According to the information and explanations given to us and as per our verification of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with it .Accordingly, the provisions of Clause 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-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3 (xvi) of the order are not applicable to the Company.

Annexure-B to the Independent Auditors'' Report

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 CASTEX TECHNOLOGIES LIMITED (the Company) as of 31st March 2016 in conjunction with our audit of the standalone financial statements of the Company for the Six months 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 (''ICAI''). 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 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 year 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 31st March 2016, 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 & on behalf of

Manoj Mohan & Associates

Chartered Accountants

ICAI Firm Regd. No.009195C

Sd/-

(Manoj Kumar Agarwal)

Place : New Delhi Partner

Dated : 30th May, 2016 Membership No -76980

Source : Dion Global Solutions Limited
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