| Report on the Financial Statements
We have audited the accompanying financial statements of Techno Forge
Limited (the Company") which comprise the balance sheet as at 31 March
2013, the statement of profit and loss and the cash flow statement for
the year then ended and a summary of significant accounting policies
and other explanatory information
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these 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
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes .
the design, implementation and maintenance of internal control 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the 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 control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, 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 qualified audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
(i) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March 2013;
(ii) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge 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 the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt 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 Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; and
e. on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at whichthecessistobepaidundersection441AoftheCompaniesAct,
1956nor has it issued any Rules under the said section, prescribing the
manner in which such cess is to be paid, therefore we are unable to
comment on this particular issue.
The Annexure referred to in Paragraph 1 under heading of "Report on
Other Legal and Regulatory Requirements" our report to the members of
Techno Forge Limited ('the Company") for the year ended 31 March 2013.
We report that:
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets except that the company is In the process of updating the fixed
assets register in respect of the depreciation claimed for current
year.
(b) As explained to us, all the Fixed Assets have been physical
verified by the management on yearly basis and no material
discrepancies were noticed on such verification. In our opinion,
frequency of verification of Fixed Assets is reasonable.
(c) According to the information and explanations provided to us and on
the basis of our examination of the records of the Company, the Company
has not disposed off any substantial part of the fixed assets during
the year, and therefore, do not affect the fundamental assumptions of
going concern.
(ii) (a) As per the information and explanations given to us, the
inventories have been physically verified by the management on a
regular basis. In our opinion, the frequency of verification s
reasonable.
(b) In our opinion and according to information and explanations given
to us, the procedures of physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, the
company has maintained proper records of inventory. No material
discrepancies were noticed on physical verification of, inventory as
compared to book records and the same have been properly dealt with in
the books of accounts.
(iii) (a) The Company has not granted loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956 ('the Act'). Consequently,
the requirements of Clause (iii) (a) to Clause (iii) (d) of paragraph 4
of the Order are not applicable.
(e) The Company has taken unsecured loans from two directors covered in
the Register maintained under Section 301 of the Companies Act 1956. In
respect of the said loans, the maximum amount outstanding during the
year was Rs. 400,00,397/- and the year-end balance is Rs.
399,98,622/-.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans taken by the Company, are not prima facie prejudicial to the
interest of the Company.
(g) The said loans are payable at dernand. Repayment of loans becomes
due as and when the lender calls back the loan. However, as explanation
given to us, the two directors have not intended to call it back in
foreseeable future.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventories, fixed assets and for the sale
of goods and Services. During the course of our audit, we have not
observed any major weakness in the internal control system during the -
course of the audit
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, there is no transactions made in pursuance of contracts
and arrangements referred to in (yXa) above and exceeding the value of
Rs 5 lacs with any pajty during the year.
(vi) According to information and explanations given to us, the Company
has not accepted any deposit from the public. Therefore, the provisions
of Clause (vi) of paragraph 4 of the Order are not applicable to the
Company.
(vii) In our opinion, the Company has an internal audit .system
commensurate with the size and the nature of its business.
(via) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 Xd) of the
Companies Act 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however not made
a detailed examination of the cost records with a view to determine
whether they are accurate or complete. The Company has appointed Cost
auditor for the financial year 2012-13.
(ix) (a) According to the records of the Company, the Company is
regular in depositing undisputed statutory dues like Sales Tax, Customs
Duty and other statutory dues. However there is minor delay in payment
of Excise Duty, Cess, Service Tax, Income Tax, Provident Fund,
Employees' State Insurance, Professional Tax etc. However according to
the information and explanations given to us, no undisputed amounts
payable in respect of the aforesaid dues were outstanding as at March
31,2013 for a period of morethan six months from the date of becoming
payable except following dues:
r SelfAssessmentTaxforA.Y.2011-12ofRs.37.05Lacs
r Self Assessment Tax for A.Y. 2012-13 of Rs. 18.26 Lacs
r Advance TaxforA.Y. 2013-14 of Rs. 21.07 Lacs
(b) - The disputed statutory dues aggregating Rs. 29.37 Lacs that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under.
Sr. Name of the Nature of Amount Period to Forum where
No. Statue the Dues (Rs.in which the dispute is
Lacs) amount pending
relates
1 Income Tax Income 7.0 6 A.Y.
2007-08 Commissioner
Act, 1961 Tax of Income
Tax (Appeals)
2 Income Tax Income 22.31 A.Y.
2010-11 Commissioner
Act 1961 Tax of Income
Tax (Appeals)
(x) The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
(xi) Based on our audit procedures and according to the information and
explanations given to us by the management, we are of the opinion that
the company has defaulted in repayment of dues to banks and financial
Institutions. Delays were noticed in payment of interest and principal
for the month of February and March 2013. As at balance sheet date, the
dues include principal aggregating Rs. 10,91,640/- 8nd interest
aggregating Rs. 16,68,2807-
(xii) In our opinion and according to the explanations given to us and
based on the Information available, nq loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, shares and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhl/ mutual benefit
fund/ society. Therefore, the provisions of Clause (xiii) of paragraph
4 of the Order are not applicable to the Company.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Therefore, the provisions of Clause (xiv) of
paragraph 4 of the Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. ' Ý *
(xvi) The Company has raised new term loan during the year. According
to information and explanations given to us and on the basis of our
examination of the records of the Company, we are of the opinion that
the Company has, prima facie, applied the term loans outstanding at the
beginning of the year and that raised during the year for the purposes
for which they are raised.
(xvii) According to the information and explanations given to us and
overall examination of the Balance Sheet of the Company, we are of the
opinion that there are no funds raised on short-term basis that have
been used for long-term investment
(xviii) The Company has made preferential allotment of equity shares
during the year to the director covered in the Register maintained
under Section 301 of the Companies Act, 1956 as approved by the members
by passing special resolution in its EGM for the quantity and pricing
thereof. Accordingly the price at which such shares are allotted is not
prima facie prejudicial to the interest of the Company.
(xix) The Company has not issued any debentures during the year.
Consequently, provisions of Clause (xix) of paragraph 4 of the Order
are not applicable.
(xxi) In our opinion and according to the information and explanations
given to us, no material fraud on or. by the company has been noticed
or reported during the year.
For Majithia & Associates
Chartered Accountants
Firm Reg. No. 105871W
Bhavesh R. Majithia
Partner
Membership No. 48194
Place: Mumbai
Date: 29.05.2013
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