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Technocraft Industries (India)
BSE: 532804|NSE: TIIL|ISIN: INE545H01011|SECTOR: Steel - Medium / Small
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« Mar 13
Auditor's Report (Technocraft Industries (India)) Year End : Mar '14
1.  We have audited the accompanying financial statements of TECHNCRAFT
 INDUSTRIES (INDIA) LIMITED, which comprise the Balance Sheet as at
 March 31, 2014, and the Statement of Profit and Loss and 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
 
 2.  Management is responsible for the preparation of these financial
 statements that give true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (“the Act”) read with the General Circular
 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
 in respect of section 133 of the Companies Act, 2013. 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
 
 3.  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.
 
 4.  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, but not for the purpose of expressing an opinion on the
 effectiveness of the entity''s internal control. 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.
 
 5.  We believe that the audit evidence we have obtained is sufficient
 and appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 6.  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:
 
 a) In the case of the Balance Sheet of the state of affairs of the
 Company as at 31st March, 2014;
 
 b) In the case of the Statement of Profit & Loss of the PROFIT for the
 year ended on that date; and
 
 c) In the case of Cash Flow statement, of the Cash Flows for the year
 ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 7.  As required by the Companies (Auditor''s Report) Order, 2003; as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 issued by the Central Government of India in terms of sub-section (4A)
 of section 227 of the Act (hereinafter referred to as the “Order”), and
 on the basis of such checks of the Books and records of the Company as
 we considered appropriate and according to the information and
 explanations given to us, we give in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the Order.
 
 8.  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;
 
 e.  On the basis of written representations received from the directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2014, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
 
 Annexure referred to in Paragraph 7 of the Auditors'' Report of even
 date to the Members of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED on the
 Financial Statements as of and for the year ended 31st March, 2014.
 
 1 a The Company has generally maintained proper records showing full
 particulars, including quantitative details and situation of fixed 
 assets.
 
 1 b As explained to us, the fixed assets of the company have been
 physically verified by the Management during the year and no material 
 discrepancies have been noticed on such verification. In our opinion, 
 the frequency of verification is reasonable.
 
 1 c In our opinion, and according to the information and explanation
 given to us, no substantial parts of Fixed Assets have been disposed 
 of during the year.
 
 2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and
 Stores & Spares parts have been physically verified during the year by 
 the Management. In our opinion the frequency of verification is 
 reasonable. In respect of inventories lying with the third parties, 
 these have substantially been confirmed by them.
 
 2 b In our opinion, the procedure of physical verification of the above
 Inventories followed by the Management are reasonable and adequate in 
 relation to the size of the Company and nature of its business.
 
 2 c On the basis of our examination of the Inventory records, in our
 opinion, the Company is maintaining proper records of the inventories. 
 The discrepancies noticed between the physical stock and book stocks 
 were not significant and the same have been properly dealt with in the 
 Books of Account.
 
 3 a In our opinion and according to the information and explanations
 given to us, the company has granted unsecured loans to 4 parties 
 covered in the Register maintained under section 301 of the Companies 
 Act, 1956.  The maximum amount of Loan granted during the year was
 3,736.46 Lakhs and the year ended balance of Loan granted to such
 parties was ` 3,125.41 Lakhs.
 
 b In our opinion, the rate of interest and other terms and conditions
 on which Loans have been granted to parties listed in the register
 maintained under section 301 of the Companies Act, 1956 are not prima
 facie, prejudicial to the interest of the company.
 
 c Payment of Principal amount and interest are regular wherever
 stipulated.
 
 d There is no overdue amount of loans granted to Companies, Firms or
 other parties listed in the register maintained under section 301 of 
 the Companies Act, 1956.
 
 e The Company has not taken any loan, Secured or Unsecured from
 Companies, firms or other parties covered in the register maintained 
 under section 301 of Companies Act, 1956 and accordingly, provisions 
 of clause 4 (iii) (f) & 4 (iii) (g) of the said order are not 
 applicable to the Company.
 
 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 Company and the nature of its business in respect
 of purchase of goods and fixed assets and sale of goods. Further, on
 the basis of our examination of the Books and records of the Company,
 and according to the information and explanation 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 a In our opinion, and according to the information and explanations
 given to us, we are of the opinion that the particulars of contract or 
 arrangements referred to in u/s 301 of the Companies Act, 1956, have 
 been properly entered in the register required to be maintained under 
 that section.
 
 5 b In our opinion, and according to the information and explanations
 given to us, the transaction made in pursuance of such contract or 
 arrangements have been made at prices which are reasonable having 
 regard to prevailing market prices for such goods, materials or services 
 or the prices at which transactions for similar goods, materials or 
 services have been made with other parties.
 
 6 In our opinion, and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public 
 to which the provisions of section 58A of the Companies Act, 1956 and 
 the rules framed there under apply.
 
 7 In our opinion, the Company has an Internal Audit System commensurate
 with the size and nature of its Business.
 
 8 We have broadly reviewed the books of account and records maintained
 by the company in respect of the products where, pursuant to the Rules
 made by the Central Government of India for the maintenance of cost
 records under section 209 (1) (d) of the Companies Act 1956 and are of
 opinion that prima facie the prescribed accounts and records have been
 made and maintained. We have however not made detailed Examination of
 the records with view to determining whether they are accurate or
 complete.
 
 9 a According to the information and explanation given to us and the
 records of the Company examined by us, the Company have generally been 
 regular in depositing provident fund dues, state insurance, income tax, 
 sales tax, wealth tax, service tax, custom duty, excise duty, cess and 
 any other statutory dues with the appropriate authorities and there are 
 no undisputed amounts payable for the same were outstanding as at 31st
 March, 2014, for a year exceeding six months from the date they became
 payable.
 
 b According to the information and explanation given to us and the
 records of the Company examined by us, the Particulars of disputed
 statutory dues under various act as at 31st March, 2014 which have not
 been deposited with the appropriate authorities are as under:-
 
 Name of the              Nature of dues               Amount
 Statute                                              (in lacs)
 
 Income Tax Act,         Income Tax,
 1961                    Penalty & Interest
                         For A.Y.  2003-2004           79.23
                         For A.Y.  2008-2009            2.91
                         (Penalty) 
 
 The Central Excise      Excise Duty &              1,115.66
 Act 1944                Penalty
                         For F.Y 1999-2002 to
                         Sep 2008.
 
                         For Period before            195.60
                         29-9-2008
 
                         For period before            266.77
                         29-1-2009
 
                         For Period before              3.04
                         29-01-2009
 
                         Service Tax & Penalty
                         For F.Y 2006-07 &
                         2007-08                        3.03
 
 The Maharashtra         For Payment of                82.48
 Land Revenue Act,       Royalty on extraction 
 1966                    & transportation of
                         mud, stones & sand
                         issued by Tahasildar,
                         Tal.  Murbad, Dist.
                          Thane
 
 
 Name of the Statute     Forum where dispute is pending
 
 Income Tax Act, 1961
 
                         Appeal filed with CIT (A) 
 
                         Appeal filed with CIT (A)
 
 The Central Excise      CESTAT, West Zonal Branch, Mumbai (Stay Granted 
 Act 1944                by CESTAT from Pre – Deposit of the dues 
                         adjudged during the pendency of these appeals)
 
                         CESTAT, West Zonal Branch, Mumbai (Stay Granted 
                         by CESTAT from Pre – Deposit of the dues 
                         adjudged during the pendency of these appeals)
 
                         CESTAT, West Zonal Branch, Mumbai (Stay Granted 
                         by CESTAT from Pre – Deposit of the dues 
                         adjudged during the pendency of these appeals)
 
                         CESTAT, West Zonal Branch, Mumbai (Stay Granted 
                         by Commissioner (Appeals) from the Pre-Deposit 
                         of the dues adjudged during the pendency
                         of these Appeals)
 
                         CESTAT, West Zonal Branch, Mumbai 
 
 The Maharashtra Land    Tahasildar, Murbad, Dist. Thane 
 Revenue Act, 1966
 
 10. The company has no accumulated losses and has not incurred any cash
 losses during the financial Year covered by our audit or in the 
 immediately preceding financial year.
 
 11 According to information & explanations given to us and the books
 and records examined by us, the Company has not defaulted in repayment
 of dues to Banks as at the Balance sheet date.
 
 12 The Company has not granted any Loans and Advances to any party on
 the basis of Security by way of pledge of shares, debentures and other
 securities and accordingly the provisions of clause 4 (xii) of the
 order are not applicable to the company.
 
 13 The company is not a chit fund or a Nidhi/Mutual benefit
 fund/society and accordingly the provisions of clause 4 (xiii) of the
 order are not applicable to the Company.
 
 14 a In respect of investment dealt or traded by the company, proper
 records are maintained in respect of transaction and contracts and 
 timely entries have been made therein.
 
 b According to the information and explanations given to us, the shares
 and units of mutual fund have been held by the company in its own name.
 
 15 In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the company has given
 guarantee for cash credit & Loan taken by its Subsidiaries (including
 step down Subsidiaries) from banks are not prima facial prejudicial to
 the interest of the company.
 
 16 In our opinion and according to the information and explanations
 given to us, the term loans taken by the company have been applied for
 the purpose for which the term loans were obtained.
 
 17 According to the information and explanations given to us and on an
 overall examination of the Balance Sheet of the Company, we report that
 the funds raised on short term basis have prima facie not been used for
 Long-term.
 
 18 The company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of companies act, 1956 during the year and accordingly the
 provisions of clause 4 (xviii) of the order are not applicable to the
 Company.
 
 19 The company has not issued any debentures during the year and does
 not have any debentures outstanding as at the beginning of the year and
 at the year end and accordingly the provisions of clause 4 (xix) of the
 order are not applicable to the Company.
 
 20 The company has not raised any money by way of public issue during
 the year and accordingly the provisions of clause 4 (xx) of the order
 are not applicable to the Company.
 
 21 The Company has filed an FIR & WRIT Petitions through the NSEL
 Investors Forum of which the Company is a member for recovery of
 outstanding of ` 1,937.04 Lakhs (Net of recoveries) alleging fraud on
 the company by the promoters of the National Spot Exchange Limited
 (NSEL). The Company has made a provision against the above outstanding
 and considered it as Bad-debts.  Except for this, no other fraud on or
 by the company were noticed or reported during the course of our audit
 for the year that causes the financial statements to be materially.
 
                                           For M.  L.  SHARMA & CO.
                                           FIRM REG.  NO.  109963W 
                                             CHARTERED ACCOUNTANTS
 
                                                  (C.  H.  BANDI)      
                                                         PARTNER
                                              Membership No.5385 
 Place of Signature: Mumbai
 Dated: 21st May, 2014
 
Source : Dion Global Solutions Limited
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