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Technofab Engineering Ltd.

BSE: 533216 Sector: Engineering
NSE: TECHNOFAB ISIN Code: INE509K01011
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NSE 00:00 | 19 Feb 13.15 -0.65
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OPEN 14.45
PREVIOUS CLOSE 15.20
VOLUME 129
52-Week high 106.00
52-Week low 10.09
P/E
Mkt Cap.(Rs cr) 15
Buy Price 18.00
Buy Qty 283.00
Sell Price 14.45
Sell Qty 2241.00
OPEN 14.45
CLOSE 15.20
VOLUME 129
52-Week high 106.00
52-Week low 10.09
P/E
Mkt Cap.(Rs cr) 15
Buy Price 18.00
Buy Qty 283.00
Sell Price 14.45
Sell Qty 2241.00

Technofab Engineering Ltd. (TECHNOFAB) - Auditors Report

Company auditors report

TO THE MEMBERS OF

TECHNOFAB ENGINEERING LIMITED

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone financial statements of TECHNOFABENGINEERING LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year ended and a summary of the significant accounting policies and other explanatoryinformation.

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 and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2019 and its loss totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis of Opinion

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 opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.

These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report

Description of Key Audit Matter How our audit addressed the key audit matter
Bad Debts 1. We Obtained a detailed age analysis of the debtors at year end and tested the analysis for a selection of the balances;
2. Obtained an analysis of the bad debts;
3. Scrutinized the analysis and identify those debts which appear bad debts;
4. Performed further testing where any disputes exist;
5. Reached a final conclusion regarding the adequacy of the bad debts.
ACCURACY OF RECOGINITION MEASUREMENT PRESENTATION AND DISCLOSURE OF REVENUE We assessed the company's process to identify the impact of the new revenue accounting standard.

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 consistent 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 defficiencies 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 2019 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 theCentral Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B a statement on thematters specified in 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 proper books of account as required by law have been kept by theCompany 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) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015.

(e) On the basis of written representation received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) 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.

(g) 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 2019 on its financial position in its financial statements – Refer Note 45

(ii) The Company did not have any long-term contracts including derivative contracts asat 31st March 2019

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

(h) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of section197(16) of the act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the company to its directors during the year is in accordance withthe provision of section 197 of the Act.

For G C Agarwal & Associates
Chartered Accountants
Firm Registration No: 017851N
G. C. Agarwal
Place: New Delhi Proprietor
Date: 24/06/2019 M.No. 083820

Annexure A to the 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 2019 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 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 31st March 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For G C Agarwal & Associates
Chartered Accountants
Firm Registration No: 017851N
G. C. Agarwal
Place: New Delhi Proprietor
Date: 24/06/2019 M.No. 083820

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 31stMarch 2019 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. According to the information and explanations given to us the inventories have beenphysically 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) Undisputed statutory dues including provident fund employee' state insuranceincome tax goods & service tax duty of customs duty of excise cess and otherstatutory dues have generally been regularly deposited except Tax Deduction at Source ofRs. 17515752/- and Goods & Service Tax of Rs. 13719842/- with the appropriateauthorities and there are no undisputed dues outstanding as at 31st March 2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no materialdues in respect of service tax duty of customs duty of excise wherever applicable to thecompany which have not been deposited with the appropriate authorities on account of anydispute. The due in respect of Income tax

Sales-tax WCT and value added tax that have not been deposited with the appropriateauthorities on account of dispute and the forum where the dispute is pending is givenbelow:

Amount in Rs.

Name of the Statute Name 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 (MP) Local Sales Tax 477351 2014-15 Dy. Commissioner (Appeals) Bhopal (MP)
Maharashtra VAT Act 2002 Maharashtra Local Sales Tax 2932732 2010-11 Dy. Commissioner (Appeals) Mumbai
Maharashtra VAT Act 2002 Maharashtra Central Sales Tax 3755130 2011-12 Dy. Commissioner (Appeals) Mumbai
Maharashtra VAT Act 2002 Maharashtra Interest Amount 2175322 2011-12 Dy. Commissioner (Appeals) Mumbai
Maharashtra VAT Act 2002 Maharashtra Local Sales Tax 1987912 2012-13 Dy. Commissioner (Appeals) Mumbai
Maharashtra VAT Act 2002 Maharashtra Interest Amount 1521862 2012-13 Dy. Commissioner (Appeals) Mumbai

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 not defaulted in repaymentof dues to banks and financial institutions. The company does not have any dues togovernment 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. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V of the Act.

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
Place: New Delhi Proprietor
Date: 24/06/2019 M.No. 083820