To
The Members of M/s Techno Forge Ltd
Under Corporate Insolvency Resolution Process ("CIRP")
Report on the audit of the financial statements
Opinion
We have audited the accompanying financial statements of M/s Techno Forge Ltd, which
comprise the balance sheet as at March 31, 2023, and the Statement of Profit and Loss and
statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the Companies
Act, 2013 (‘Act) in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2023, its profit (or Loss)* and cash flows for the
year ended on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified under
section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards
are further described in the auditors responsibilities for the audit of the financial
statements section of our report. We are independent of the Company in accordance with the
code of ethics issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the rules there under, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material Uncertainty Related to Going Concern
The Companys net worth is negative and the borrowings from banks and financial
institutions have been classified by the lenders as non-performing assets since from 2014.
Further Honble NCLT, AHMEDABAD Bench vide order no C.P. (I.B) No. 264/7/NCLT/AHM
/2018, dated 02/07/2020 initiation of Corporate Insolvency Process ("CIRP") and
has appointed CA Bhavi Shreyans Shah having Registration No.IBBI
/IPA-001/IP-IP-P00915/217-18/11521 as an "Interim Resolution Professional"
(IRP). On 02/07/2020, Powers of Board of Directors are vested with Resolution professional
as per NCLT order and provision of the Insolvency and Bankruptcy Code, 2016. Further, the
members of the CoC has in their first meeting continued the IRP as Resolution Professional
(RP) in accordance with section 22 of the Code, 2016. The Resolution Plan as per IBC was
submitted by the erstwhile management being MSME and eligible under IBC. The resolution
plan submitted by the erstwhile management to the CoC has been accepted and the
application has been filed before Honble NCLT Ahmedabad bench under section 30 & 31
for the approval of the Resolution plan as approved by the CoC members. The same is
pending before the AA
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Reporting of key audit matters as per SA 701, Key Audit Matters are not applicable to
the Company as the Company has been delisted due to non compliances
Information other than the financial statements and auditors report thereon
The Companys Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Boards
Report including Annexures to Boards Report, Business Responsibility Report but does not
include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Managements and Resolution Professionals responsibility for the financial statements
Pursuant to order dated 02-07-2020 of the Honble National Company Law Tribunal -
Ahmedabad Bench at Ahmedabad ("NCLT Order"), Corporate Insolvency Resolution
Process ("CIR Process") has been initiated for the Company in accordance with
the provisions of the Insolvency and Bankruptcy Code, 2016, ("the Code") and
related rules and regulations issued there under with effect from 02-07-2020 (Commencement
Date of Corporate Insolvency Resolution Process). CA Bhavi Shreyans Shah (IP Registration
No: IBBI/IPA-001/IP-00915/2017-18/11521) was appointed as Interim Resolution Professional
("IRP"). The members of the CoC have in their first meeting dated 04-08-2020
continued CA Bhavi Shreyans Shah as Resolution Professional ("RP") in accordance
with section 22 of the Code.
The Companys board of directors/ Resolution Professional / Management are responsible
for the matters stated in section 134 (5) of the Act with respect to 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 the accounting standards specified under
section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, Companys Board of Directors/ Resolution
Professional/ management is responsible for assessing the Companys ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
The Management / RP are also responsible for overseeing the Companys Financial
reporting process.
Auditors responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards. From the matters communicated with
those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on other legal and regulatory requirements
The provisions of the Companies (Auditors Report) Order, 2016 ("the
Order"), issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Companies Act, 2013 is not applicable to the Company since.
As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the Annexure "A", a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of 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 the
Company so far as it appears from our examination of those books;
(c) The balance sheet, the statement of profit and loss, and the cash flow statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the accounting
standards specified under section 133 of the Act, read with rule 7 of the Companies
(Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on March
31, 2021 taken on record by the board of directors, none of the directors is disqualified
as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the
Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B". Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Companys internal financial controls over
financial reporting;
(g) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us;
a. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements list attached to the financial statements;
b. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
c. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company
List of Litigation
| Sr. No. Claimant |
Claim Amount. |
| 1 BANK OF INDIA |
294459663/- |
| Vadodara MID Corporate Branch, Bank Of India Building, 2nd Floor, Raopura,
Vadodara-390001 |
(Pending before NCLT court) |
| 2 Bajaj Finance Ltd, 4th Floor, Bajaj Finserv Corporate Office, off Pune Ahmednagar
Road, Viman Nagar, |
2312727/- |
| PUNE - 411 014. |
(Pending before the Pune civil court) |
| 3 Standarad Precision Bellows |
76160/- |
| 2/12, G.I.D.C. Estate, Gorva, Vadodara - 390 016 |
(Pending before Vadodara civil court) |
| 4 High Profile Engineers 16, 4th Floor, Building No.A/3, S.No.29/2 +30/2/21 Part,
Potnis Parisar, Karve Nagar |
88595/- |
| Pune - 411 052. |
(Pending before the Pune Civil Court) |
| 5 Pavan Hansraj Jain Kirti Metal Corporation |
87000/- |
| Ankleshwar. |
(Pending before Ankleshwar civil court) |
| 6 Wikus-Niran Saws |
335386/- |
| 4, Radha, Teli Galli, Andheri (Easte) Mumbai-400059 |
(Pending before Mumbai-Andheri court) |
| 7 C R Supplier |
1389073/- |
| Vadodara. |
(Pending before Vadodara civil court) |
| Customs,Excise & Service Tax Appellate |
311000/- |
| 8 Tribunal. |
(Pending before |
| Central Government Industrial Tribunal cum |
1320356/- |
| 9 Labour Court |
(Pending before the Tribunal) |
| BHAILAL KALA KACHELA |
120000/- |
| 10 SATYVAN R. KUSHWAHA |
(Pending before Vadodara Labour court) |
| 11 Boiler Attendance. |
470917/- (Pending before Ankleshwar labour court) |
| 12 S.E. Investment Ltd. |
Loan Amount and Interest Amount fully Paid and the disputed amount ( Rs.2.00 Per
Thousand as Damages charges ) Rs. 18,00,000.00 |
For, Mahesh A. Mehta & Co.
Chartered Accountants
[Mahesh A. Mehta]
Proprietor
M.NO.037887
F.R.NO.105794W
UDIN : 23037887BGVOBU9473
Place: Ankleshwar
Date:02/09/2023
Annexure "A" to the Independent Auditors Report*
(Referred to in paragraph 1 under ‘Report on other legal and regulatory
requirements section of our report to the members of M/s Techno Forge Ltd of even date)
1. In respect of the Companys fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) The fixed assets of the Company were physically verified in full by the management
during the year. According to the information and explanations given to us and as examined
by us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the records examined by
us, we report that the Company does not hold any freehold, are held in the name of the
Company as at the balance sheet date. In respect of immovable properties of land and
building that have been taken on lease and disclosed as fixed assets in the financial
statements, the lease agreements are in the name of the Company.
2. The inventory has been physically verified by the management during the year. In our
opinion, the frequency of such verification is reasonable. According to the information
and explanations given to us and as examined by us, no material discrepancies were noticed
on such verification.
3. According to information and explanation given to us, the company has not granted
any loan, secured or unsecured to companies, firms, limited liability partnerships or
other parties covered in the register required under section 189 of the Companies Act,
2013. Accordingly, paragraph 3 (iii) of the order is not applicable.
4. In our opinion and according to information and explanation given to us, the company
has not granted any loans or provided any guarantees or given any security or made any
investments to which the provision of section 185 and 186 of the Companies Act, 2013.
Accordingly, paragraph 3 (iv) of the order is not applicable.
5. In our opinion and according to the information and explanations given to us, the
company has not accepted any deposits and accordingly paragraph 3 (v) of the order is not
applicable.
6. The Central Government of India has not prescribed the maintenance of cost records
under sub-section (1) of section 148 of the Act for any of the activities of the company
and accordingly paragraph 3 (vi) of the order is not applicable.
7. In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, amounts deducted/ accrued in the books of
account in respect of undisputed statutory dues including provident fund, employees state
insurance, income-tax, sales- tax, service tax, goods and service tax, duty of customs,
duty of excise, value added tax, cess and other material statutory dues have been
generally regularly deposited during the year by the company with the appropriate
authorities.
According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, employees state insurance, income-tax, sales- tax,
service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess
and other material statutory dues were in arrears as at March 31, 2020 for a period of
more than six months from the date they became payable
i. Self Assessment Tax for A.Y. 2011-12 of Rs.31.99 Lacs
ii. Self Assessment Tax for A.Y. 2012-13 of Rs. 18.26 Lacs
iii. Self Assessment Tax for A.Y. 2013-14 of Rs. 21.07 Lacs
(b)
| SR.NO Name of Statutory |
Nature of dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
| 1 Income Tax Act, 1961 |
Income Tax |
7.06 |
A.Y. 2007-08 |
Commissioner of Income Tax (Appeals) |
| 2 Income Tax Act, 1961 |
Income Tax |
22.31 |
A.Y. 2010-11 |
Commissioner of Income Tax (Appeals) |
| 3 Income Tax Act, 1961 |
Income Tax |
73.81* |
A.Y.2011-12 |
Commissioner of Income Tax (Appeals) |
* Including Self Assessment tax of Rs 31.99/- Lacs as above.
8 According to the information and explanation given to us and records examined by us,
the Company has defaulted in repayment of dues to banks financial institutions and
government as detailed in Appendix - I to this report. The Company does not have any dues
to debenture holders during the year.
Appendix - I
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. Unpaid overdue interest and installments to
banks interest amount Rs.12,95,06,803/ installment amounts to Rs. 18,09,36,307/- and to
financial institutions amounts to Rs.18,03,552/- as on 31st March, 2021
including devolved guarantee / letter of credit. The overdue relates to Financial Years
2012-13, 2013-14, 2014-15, 2015-16, 2016-2017 & 2017-2018, 2018-2019, 2019-2020
9. The Company has not raised any money by way of initial public offer or further
public offer (including debt instruments) and has not taken any term loans during the
year. Accordingly, paragraph 3 (ix) of the order is not applicable.
10. To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company or no material fraud on the Company by its officers
or employees has been noticed or reported during the year.
11. In our opinion and according to the information and explanations given to us,
managerial remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule V to the Act
12. The Company is not a Nidhi Company and accordingly, paragraph 3 (xii) of the order
is not applicable to the Company.
13. According to the information and explanations given to us and based on our
examination of the records of the company, transactions with the related parties are in
compliance with section 177 and 188 of the Act. Where applicable, the details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
14 According to the information and explanations given to us and based on our
examination of the records of the company, the company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year. Accordingly, paragraph 3(xiv) of the order is not applicable.
15 According to the information and explanations given to us and based on our
examination of the records of the company, the company has not entered into non-cash
transactions with directors or persons connected with them. Accordingly, paragraph 3(xv)
of the order is not applicable.
16 According to the information and explanations given to us and based on our
examination of the records of the company, the company is not required to be registered
under section 45-IA of the Reserve Bank of India Act 1934.
For, Mahesh A. Mehta & Co.
Chartered Accountants
[Mahesh A. Mehta]
Proprietor
M.NO.037887
F.R.NO.105794W
UDIN : 23037887BGVOBU9473
Place: Ankleshwar
Date: 02/09/2023
Appendix - I
Details of default in payment of dues to banks, financial institutions and government
| Name of the bank/ Financial Institution |
Nature of default |
Amount of default |
Period of default |
Present status |
| Bank Of India |
Unpaid overdue interest and installments installment amounts financial institutions |
Rs.12,95,06,803 |
From Years 2012-13 to 2019-20 |
unpaid |
| Bank Of India |
|
Rs.18,09,36,307/- |
From Years 2012-13 to 2019-20 |
Unpaid |
| Bajaj Fin Investment |
|
Rs. 18,03,552/- |
From Years 2012-13 to 2019-20 |
Unpaid |
| Total |
|
Rs. 31,22,46,662/- |
|
|
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatory
requirements section of our report to the Members of M/s Techno Forge Ltd of even date)
Report on the internal financial controls over financial reporting under clause (i) of
sub - section 3 of section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/s Techno
Forge Ltd as at March 31, 2023, in conjunction with our audit of the financial statements
of the Company for the year ended on that date.
Managements Resolution Professionals responsibility for internal financial controls
The suspended board of directors of the Company / Resolution Professional / Management
is responsible for establishing and maintaining internal financial controls based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness
of the accounting records, and the timely preparation of reliable financial information,
as required under the Companies Act, 2013.
Auditors responsibility
Our responsibility is to express an opinion on the internal financial controls over
financial reporting of the Company based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants
of India and the standards on auditing prescribed under Section 143 (10) of the Companies
Act, 2013, to the extent applicable to an audit of internal financial controls. Those
standards and the guidance note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting were established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement in the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial control system
over financial reporting.
Meaning of internal financial controls over financial reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorisations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.
Limitations of internal financial controls over financial reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management of override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and according to the information and explanations given to us, the
Company has, in all material respects, an adequate internal financial control system over
financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2021, based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India.
For, Mahesh A. Mehta & Co.
Chartered Accountants
[Mahesh A. Mehta]
Proprietor
M.NO.037887
F.R.NO.105794W
UDIN : 23037887BGVOBU9473
Place: Ankleshwar
Date : 02/09/2023.
+91-9892691696
