We have audited the attached Balance Sheet of TECHNO FORGE LIMITED as
at 31st March, 2012 and also the Profit and Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed
there to. These financial statements are the responsibility of the
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
1. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956 (hereinafter referred to as the
Act), we annex hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order, to the extent applicable.
3. Further to our comments in the Annexure referred to in paragraph 2
above, 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 purposes of our
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 the
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion. Balance Sheet and Profit and Loss Account dealt with
by this report comply with the Accounting Standards referred to in Sub
section (3C) of Section 211 of the Companies Act, 1956 except for AS
15,where provision has been made for liability in respect of gratuity
to employees on estimated basis and not as per actuarial valuation.
e) On the basis of written representations received from the Directors
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the* Directors is disqualified as on 31st March
2012 from being appointed as a Director in terms of clause (g) of Sub -
section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Account Policies and notes thereon, give the information
required by the Companies Act, 1956 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 2012.
(ii) In the case of Profit and Loss Account, of Profit of the Company
for the year ended on that date and
(iii) In the case of Cash Flow Statement, of the Cash Flow for the year
ended on that date.
Annexure referred to in paragraph 2 of our report of even date on the
Financial Statements of TECHNO FORGE LIMITED, for the year ended 31st
On the basis of such checks as we considered appropriate apd according
to the information and explanation given to us during the course of
audit, we state that:
1. In respect of its Fixed Assets
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 curent 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 given to us, the
company has not disposed off substantial part of the fixed assets
during the year and the going concern status of the company is not
2. In respect of its inventory
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 property dealt with in
the books of accounts.
3 In respect of the loans, secured or unsecured, granted or taken by
the company to / from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
a) As informed, the Company has not granted loans, secured or unsecured
to Company, firms or other parties listed or covered in the register
maintained under Section 301 of the Act in which directors are
interested has contemplated under sub-section (6) of section 299 of the
b) The company has taken unsecured loans from two directors covered in
the register maintained under Section 301 of the Companies Act, 1956.
The yearend balance of such loan is Rs. 2,27,14,336/-and the maximum
amount outstanding during the year was Rs. 2,27,14,336/-from two
directors of the company. The rate of interest and other term and
conditions of loans received are prima fade not prejudicial to the
interest of the company.
c) In respect of the said loans, the same are long term in nature and
therefore the question of overdue amount does not arise.
d) In respect of the said loans and interest thereon, there are no
4. 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 good'' and Services. During the course of our audit, we have no
observed any continuing failure to correct any major weaknesses in the
aforesaid internal control system.
5. In respect of the contracts or arrangements / transactions referred
to in section 301 of the company''s Act 1956;
a) In our opinion and according to the information & explanations given
to us, the transaction made in pursuance of contracts or arrangements
that need to be entered in the register maintained under section 301 of
the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information & explanations given
to us there is one transaction of Rs. 12.00 lacs towards commission to
the director Mr. Hemant V. Chheda for which no permission of requisite
authority is obtained. The transaction has been madn at price which are
prima facie reasonable having regards to the prevailing market prices
at the relevant time.
6. According to information and explanations given to us, the company
has not accepted any deposit from public. Therefore, the provision of
Clause (vi) of paragraph 4 of the Order are not applicable to the
7. In our opinion and according to information and explanations given
to us, the company has internal audit system commensurate with the size
and nature of its business.
8. The Centra! Government has prescribed maintenance of Cost Records
under section 209(1) (d) of the companies Act, 1956. The company has
not appointed Cost Auditor during the Previous Year
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 )(d) 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.
a) According to the information & explanation given to us & as per
records of the company examined by us, the company is regular in
depositing statutory dues in respect of Sales Tax, Sen/ice Tax, Custom
Duty, Excise Duty & cess except there is a delay in payment of
Provident Fund. Employees State Insurance, Professional Tax, TDS,
Income Tax and in respect of following payments which are outstanding
for more than six months at the year end.
I) SelfAssessmenttaxforAssessmentYear2011-12Rs. 37,05lacs.
II) Advance Tax for Assessment Year2012-13 Rs. 14.58lacs.
b) There is a disputed liability in respect of which the company has
not paid the Assessment Dues to the extent of Rs.7,06,170/- for
Assessment Year 2007-08 for which the company has filed an appeal
before the Commissioner of Income Tax (Appeal).
c) There is a disputed liability in respect of which the company has
not paid VAT Assessment dues to the extent of Rs. 18,31,779/- for
Assessment Year 2008-09 for which the company has filled the appeal
before the Joint Commissioner Baroda.
10. The company does not have accumulated losses at the end of the
financial year and it has not incurred cash losses in the financial
year under report and the immediate preceding financial year.
11. On the basis of our audit procedures and based on the information
and explanations given by management, we are of the opinion that the
company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
12. In our opinion & according to the information and explanation
given by management, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
13. The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore, the provisions of clause 4 (xiii) of the paragraph
4 on the order are not applicable.
14. The Company is not dealing in or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause 4
(xiv) of the paragraph 4 of the order are not applicable.
15. In our opinion and according to the information and explanation
given by the management, the company has not given any guarantee for
loans taken by others from banks or financial institutions.
16. On the basis of records examined by us, and relying on the
information compiled by the Company for co-relating the funds raised to
the end use of term loans, we state that the Company has, prime facie,
applied the term loan for the purpose for which they were raised.
17. According to the information and explanation given to us and on
overall examination of the financial statements and after placing
reliance on the reasonable assumptions made by the Company fot
classification of Short-term and Long term usage of the funds, we are
of the opinion that the funds raised on short-term basis have prima
facie not been utilized for long-term investment and vice- versa.
18. According to the information and explanation given to us, the
company has not made any preferential allotment of shares to the
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
19. According to the information and explanations given to us, the
Company has not issued any Secured Debentures during the year.
20. According to the information and explanation given to us, the
company has not raised any money by way of public issue during the
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanation given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have been informed of such case by the Management.
For MAJITHIA& ASSOCIATES
B. R. Majithia
Firm Reg. No. - 105871W
Place : Mumbai.
Date : 29/06/2012