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Technofab Engineering Ltd.

BSE: 533216 Sector: Engineering
NSE: TECHNOFAB ISIN Code: INE509K01011
BSE 00:00 | 26 Jul Technofab Engineering Ltd
NSE 05:30 | 01 Jan Technofab Engineering Ltd
OPEN 6.85
PREVIOUS CLOSE 6.85
VOLUME 959
52-Week high 7.19
52-Week low 5.38
P/E
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.85
CLOSE 6.85
VOLUME 959
52-Week high 7.19
52-Week low 5.38
P/E
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Technofab Engineering Ltd. (TECHNOFAB) - Auditors Report

Company auditors report

TO THE MEMBERS OF TECHNOFAB ENGINEERING LIMITED

Report on the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of TECHNOFABENGINEERING LIMITED( "the Company") which comprise the Balance Sheet as at 31stMarch 2021 the Statement of Profit and Loss(including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year ended and asummary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required except for theindeterminate effects of the matter referred to in Basis for Qualified Opinion sectionbelow give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and its loss total comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Qualified Opinion

We draw your attention to note 50 51&52 to the standalone financial statementswith regard to multiple significant uncertainties faced by the Company such as (a) Nonavailability of funds from banks and also declaration of loans as NPA (b) Poor recoveryfrom debtors (c) Invocation of performance guarantees /bank guarantees (d) Litigation withdebtors (e) Balance of Trade Receivables being subject to confirmation. The impact of theabove matters if any on the standalone financial statements is presently notascertainable.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone financialstatements section of our report. We are independent of the Company in accordance withCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Companies Act 2013 and the Rule thereunder and we havefulfilled our ethical responsibilities in accordance with these requirements and the Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis of our qualified opinion.

Material Uncertainty Related to Going Concern

We draw attention to note 50 51 & 52to the standalone financial statements whichdescribe the company's financial condition and its debt as at March 31 2021. TheCompany's financial performance has impacted its ability to generate the cash flow that itneeds to settle its liabilities as they fall due. The Company has defaulted in repaymentof loan and interest payments. Due to fund constraints and other reasons the company hasnot been able to complete projects as expected resulting in invocation of bankguarantees/performance guarantees. These events or conditions along with other matters asset forth in aforesaid note indicate that a material uncertainty exist that may castsignificant doubt on the Company's ability to continue as a going concern if the companyis not able to raise funds renegotiate/restructure liabilities monetize its certainassets including but not limited to realization of stated amount of debtors and generatecash flow from operations that it needs to settle its liabilities as they fall due.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to note 50 51 & 52 to the standalone financial statements whichstates that the company has defaulted on repayments to various banks due to invocation ofvarious bank guarantees / performance guarantees and poor recovery and litigations withdebtors.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Except for the matters described in the Basis for Qualified Opinion section andMaterial Uncertainty Related to Going Concern section we have determined that there areno other key audit matters to communicate in our report.

Information Other than the Standalone financial statements and Auditor's Report Thereon

The Company's Board of Directors are responsible for the other information. The otherinformation comprises the Directors report to be included in the Company's Annual reportbut does not include the standalone financial statements and our auditor's report thereon.The other information is expected to be made available to us after the date of thisAuditors' Report. Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process. Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order 2016' issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report to the extent applicable 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 except for the indeterminate effects of the matter referred toBasis for Qualified Opinion paragraph above proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) Except for the indeterminate effects of the matter referred to Basis for QualifiedOpinion paragraph above in our opinion the aforesaid Standalone financial statementscomply with the Accounting Standard specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2015.

(e) The matter described in Basis for Qualified Opinion Material Uncertainty Relationto Going Concern Section above in our opinion may have an adverse effect on thefunctioning of the Company.

(f) On the basis of written representation received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021from being appointed as a director in termsof Section 164 (2) of the Act.

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are stated in the Basis of Qualified Opinion paragraph above.

(h) 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 A".

(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

(i) The Company has disclosed the impact of pending litigations as at 31stMarch 2021 on its financial position in its financial statements - Refer Note 46

(ii) The Company did not have any long-term contracts including derivative contracts asat 31st March 2021

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

(j) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of section 197(16) of the act as amended no remunerationhas been paid/provided by the company to its directors during the year.

For G C Agarwal & Associates Chartered Accountants

Firm Registration No: 017851N

Place: New Delhi G. C. Agarwal
Date: 26.08.2021 Prop.
UDIN: 21083820AAAADE1359 M.No.083820

Annexure A to Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

We have audited the internal financial controls over financial reporting of TECHNOFABENGINEERING LIMITED ("the Company") as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2021 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 G C Agarwal & Associates Chartered Accountants

Firm Registration No: 017851N

G. C. Agarwal
Prop.
M.No.083820
Place: New Delhi
Date: 26.08.2021

Annexure B to Independent Auditors' Report

The annexure referred to in Independent Auditors' Report to the members of TECHNOFABENGINEERING LIMITED on the Standalone financial statements for the year ended 31stMarch2021 we report that:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of all fixed assets.

(b) As explained to us the management during the financial year has physicallyverified the fixed assets in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.

(c) The title deeds of immovable properties are held in the name of the company.

2. (a) According to the information and explanations given to us the inventories havebeen physically verified by the management during the year at reasonable intervals. Asexplained to us the discrepancies noticed on physical verification of inventory ascompared to the book records were not material.

3. According to the information and explanation given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Companies Act 2013. Accordinglyparagraphs 3(iii) (a) and (b) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us thecompany has complied with the provision of section 185 and 186 of the Act with respect toloans and investment made. As per the information and explanation given to us the Companyhas not given any guarantee or provides any security in connection with a loan to anybodycorporate or person.

5. According to the information given to us the Company has not accepted any depositsunder the provisions of section 73 to 76 of the Companies Act 2013 or any other relevantprovisions of the companies Act and the Companies (Acceptance of Deposits) Rules 2014 asamended from time to time. No order has been passed with respect to Section 73 to 76 bythe Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyCourt or any other tribunal.

6. To the best of our knowledge and as explained the maintenance of cost records asspecified by the Central Government under sub-section (l) of section 148 of the CompaniesAct 2013 is not applicable to the company.

7. (a) During the year there were various delays in deposit of undisputed statutorydues including provident fund employee' state insurance income tax goods &servicetax customs duty excise duty cess and other statutory dues. Further according to theinformation and explanations given to us no undisputed amount payable in respect of theaforesaid dues were outstanding as at 31st March 2021 for a period of more than sixmonths from the date of becoming payable.

(b) According to the information and explanations given to us the disputed statutorydues in respect of provident fund employee' state insurance income tax goods&service tax customs duty excise duty cess and other statutory dues whereverapplicable to the company which have not been deposited with the appropriate authoritiesis as under:

Name of the Statute Nature of dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Orissa Sales Tax Works Contract Tax 1355000 2002-03 Before Sales Tax Tribunal -
Orissa
MP VAT Act 2002 Local Sales Tax 190943 2014-15 Dy. Commissioner
(MP) (Appeals) Bhopal (MP)
Maharashtra VAT Act Local Sales Tax 3357732 2010-11 Jt. Commissioner
2002 (Maharashtra) (Appeals) Mumbai
Maharashtra VAT Act Central Sales Tax 5130542 2011-12 Jt. Commissioner
2002 (Maharashtra) (Appeals) Mumbai
Maharashtra VAT Act Local 3734774 2012-13 Jt. Commissioner
2002 (Maharashtra) (Appeals) Mumbai
Central 60333
West Bengal Sales Local Sales Tax 3753960 2015-17 Dy. Commissioner
Tax Act 1994 Durgapur(WB)
Goods & Service Tax SGST 417313 Addl. Commissioner of
Act 2017 Tripura CGST 417313 State Tax Agartala
PENALTY 335535 2017-13
INTEREST 257404
Goods & Service Tax SGST 1553757 2013-19 Addl. Commissioner of
Act 2017 Tripura CGST 1553757 State Tax Agartala
PENALTY 3107534
INTEREST 521505

8. In our opinion on the basis of books and records examined by us and according tothe information and explanations given to us the company has defaulted in repayment ofdues to banks which have been declared NPA details of which is as under:

S.!Xo. Bank Name CC A/c No. Date of XPA Amount
1 Bank of India 604130100020104 7-Jun-19 L 163.949.886
2 BAnk of Baroda 40940500000011 8-Jul-19 592.610.693
3 State Bank of India 64044446050 27 -Jun-19 329.477.730
4 United Bank of India 1720250000259 26-Jun-19 126.589.886
5 Axis bank 7010300017310 30- Jun-19 68.166.823
6 IDBIBank 127655100001717 25-Sep-19 100.523331

All the above mentioned defaults are continuing till date. The company does not haveany dues to government or debenture holders.

9. The Company has not raised any money by way of initial public offer or furtherpublic offer or debt instruments. In our opinion and according to the information andexplanation given to us the term loans have been applied for the purposes for which theywere raised other than temporary deployment pending allocation.

10. According to the information and explanations given to us and as represented by theManagement and based on our examination of the books and records of the Company and inaccordance with generally accepted auditing practices in India we have been informed thatno case of frauds has been committed on or by the Company or by its officers or employeesduring the year.

11. The Company has not paid / provided for managerial remuneration during the year.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable.

13. According to the information and explanations given to us and based on orexaminations of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the financial statements as required by the applicableaccounting standards.

14. The Company has not made any preferential allotment or private allotment of sharesor fully or partly convertible debentures during the year. Accordingly provisions ofclause 3 (xiv) of the Order are not applicable to the Company.

15. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.

16. According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India 1934.Accordingly provisions of clause 3 (xvi) of the Order are not applicable to the Company.

For G C Agarwal & Associates Chartered Accountants

Firm Registration No: 017851N

G. C. Agarwal
Prop.
Place: New Delhi M.No.083820
Date: 26.08.2021

.