Fourth Dimension Solutions Ltd.
|BSE: 532600||Sector: IT|
|NSE: FOURTHDIM||ISIN Code: INE382T01014|
|BSE 05:30 | 01 Jan||Fourth Dimension Solutions Ltd|
|NSE 05:30 | 01 Jan||Fourth Dimension Solutions Ltd|
|BSE: 532600||Sector: IT|
|NSE: FOURTHDIM||ISIN Code: INE382T01014|
|BSE 05:30 | 01 Jan||Fourth Dimension Solutions Ltd|
|NSE 05:30 | 01 Jan||Fourth Dimension Solutions Ltd|
To the Members of FOURTH DIMENSION SOLUTIONS LIMITED
Report on the Audit of the Financial Statements
Disclaimer of Opinion:
We have audited the accompanying financial statements of FOURTH DIMENSION SOLUTIONSLIMITED (the Company) which comprise the balance sheet as at 31stMarch 2020 and the statement of Profit and Loss (including Other Comprehensive income)statement of changes in equity and statement of cash flows for the year then ended onthat date and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as financial statements).
We do not express an opinion on the accompanying financial statements of the entity.Because of the significance of the matters described in the Basis for Disclaimer ofOpinion section of our report we have not been able to obtain sufficient appropriateaudit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion:
8. We are unable to comment on necessary adjustments / disclosures in these financialstatements in relation to following items in view of non-availability of necessaryinformation / documentations / satisfactory explanations relevant to the audit for thecurrent year.
a. Non availability of confirmation / reconciliation of current / term deposit accountbalances maintained with various banks / authority. (Refer Note no. 14.B.18)
b. Non availability of confirmation / reconciliation of account balances of tradereceivable balance with government authorities and other receivables. (Refer Note no.14.B.15)
c. Non availability of confirmation / reconciliation of account balances of tradepayable balance payable to government authorities and other payables. (Refer Note no.14.B.15)
d. Non availability of confirmation/reconciliation of account balances of Loansincluding deposits and advances.
e. Non availability of confirmation/reconciliation of account balances of securedlenders. f. Non availability of information / explanation of any expenses incurred by thecompany. g. Non availability of information / explanation for Unsecured loan from Relatedparties.
h. We draw attention to the Note 14.B.6.b of the Financial statement which relates toProvision of Employee Benefit the Company has not recognized provisions for employeebenefits in absence of Actuarial Report in its financial statements.
9. We draw attention to the Note 1(a) of the Financial statement which relates toProperty Plant and Equipment of the company the management has not performed a completephysical verification of all the Fixed Assets. Further we have not been able to verifythe assets physically. Hence we are not able comment on possible adjustments if any tothe value of fixed assets shown in the balance sheet.
10. We draw attention to the Note 4(a) of the Financial statement which relates to LongTerm Borrowings which represent Term Loan and Bank Overdraft from various banks /financial institution. The Company has defaulted in repayment of loans taken from thebanks due to which the banks have recalled their loans and have initiated legal actions.Further interest amount deferred due to NPA. Due to NPA interest amount is not chargedin loan statement and accordingly the management has decided not to provide interest onsuch loans. Hence we are unable to comment on the financial impact of this matter on thecarrying value of Long term borrowing and consequential impact if any on the financialstatement of the company for the year ended March 31 2020.
11. We draw attention to the Note 14.B.19 of the Financial statement which relates toCorporate Social Responsibility during the year the company has made provision of Rs.4468110 for Contribution to Corporate Social Responsibility for F.Y. 2019-20 in theStatement of Profit and Loss but in view of undergoing substantial financial stress thecompany has not spent any amount towards CSR during the FY 2019-20.
12. The company has not provided us any documentary evidence regarding regular filingof all statutory returns. Hence we are unable to comment on the financial impact if anyon the profit/loss of the company for the year ended on March 31 2020.
13. We draw to attention to Note 1(a) to the financial statements related to the basisfor the calculation of depreciation: in absence of proper fixed assets register rate ofdepreciation under written down value method on remaining useful life of respective assetsis calculated based on audited financial statements of previous years and other financialrecords available in system.
14.We draw attention to the Note 1(c) of the Financial statement which relates to Tradereceivable of the company Rs. 2442927552 is the amount of debtor outstandingconsidered doubtful. The company has not made any provision for doubtful debts for suchamount. Further such balances of trade receivables are subject to their confirmation.
15.We draw attention to the Note to account 14.B.1 of the Financial statement whichstates that the audited Financial Results for the year ended March 312020 have beenreviewed by the Audit Committee and were taken on record by the directors of thereconstituted board. Kindly note that reconstituted board of directors were not in officefor the period to which this report primarily pertains. Resolution Professional during theCIRP was entrusted with and responsible for the management of the affairs of the Company.As pointed out above the reconstituted Board of Directors have been in office only sinceSeptember 25 2020. The reconstituted Board is submitting this report in compliance withthe Act and Listing Regulations and the Directors as on date are not to be consideredresponsible for the fiduciary duties discharged with respect to the oversight on financialand operational health of the Company and performance of the management for the periodprior to September 25 2020 (means erstwhile management/ Resolution Professional is heldresponsible for this Financial Statement of F.Y. 2019-20) since Hon'ble NCLT NEW DelhiBench approved the resolution plan on the said date which is to be considered as CIRP enddate.
16.We draw attention to the Note to account 14.B.2 of the Financial statement whichstating that Pursuant to an application filed by M/s American Express Banking Corporationbefore the National Company Law Tribunal NEW Delhi Bench (NCLT) in terms ofSection 7 of the Insolvency and Bankruptcy Code 2016 read with the rules and regulationsframed thereunder (Code) the NCLT had admitted the application and orderedthe commencement of corporate insolvency resolution process (CIRP) of TheCompany (Corporate Debtor) vide its order dated 25.07.2019. The Bench videorder dated 27.11.2019 has appointed Ms. Pooja Bahry as the resolution Professional (RP)of Corporate Debtors. Ms. Pooja Bahry wrote to the management of the Corporate Debtor onrequesting the charge operations and management of the Corporate Debtor to be handed overto RP.
Resolution professional Ms. Pooja Bahry received only one resolution plan from M/sLinkstar Infosys Pvt Ltd. and Mr. Dhaval Mistry on 2nd April 2020 (read along withAddendum to resolution plan dated 24th April 2020). The resolution plan was placed forconsideration and vote before 14th meeting of the Committee of creditors (COC) held on28.04.2020. The Resolution plan submitted by M/s Linkstar Infosys Pvt Ltd. and Mr. DhavalMistry was unanimously approved by the committee of creditors with 100% voting in itsfavor.
The Hon'ble NCLT (NEW Delhi Bench) vide order dated 25th September 2020 approved theresolution plan of the applicants duly recommended by the COC.
Management's Responsibility for the Financial Statement
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of financial statements that give atrue and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due 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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our responsibility is to express an opinion on these financial statements based onconducting our audit in accordance with the Standards on Auditing under Section 143(10) ofthe Act. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
Because of the matter described in the Basis for Disclaimer of Opinion paragraphhowever we were not able to obtain sufficient appropriate audit evidence to provide abasis for an audit opinion.
The financial statements for the year ended March 31 2019 which are included ascomparative figures were audited by the erstwhile auditors of the Company who issued theirunqualified opinion vide their report dated May 29 2019. Our Opinion is not modified inrespect of above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
(a) As described in the Basis for Disclaimer of Opinion paragraph we sought but wereunable to obtain all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit.
(b) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph above we are unable to state whether proper books of account asrequired by law have been kept by the Company so far as it appears from our examination ofthose books.
(c) Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Balance Sheet Statement of Profitand Loss and Cash Flow Statement dealt with by this Report are in agreement with the booksof account.
(d) Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the aforesaid financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) The matter described in the Basis for Disclaimer of Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.
(f) We are unable to obtain any written representations from the directors as on 31stMarch 2020. Therefore we are unable to state whether any of the director is disqualifiedas on 31st March 2020 from being appointed as a director in terms of Section 164 (2) ofthe Act.
(g) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B.
(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Company has disclosed the impact ofpending litigations on its financial position in its financial statements Refer Note14.B.4 to the financial statements.
ii. Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Company has made provision asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts. iii. There were noamounts which were required to be transferred to the investor's education and protectionfund by the company.
FOURTH DIMENSION SOLUTIONS LIMITED
Annexure to Independent Auditors' Report for the period ended 31st March2020 (Referred to in Paragraph 1 under the Heading of Report on Other Legal andRegulatory Requirements section of our Report of even date)
(i) Fixed Assets
a) The Company has not maintained proper records showing full particulars includingquantitative details and situtation of fixed assets. b) We have not been given informationregarding physical verification of fixed assets carried out if any during the year by theCompany. Hence we are unable to comment as to whether there is any material discrepancieson physical verification. In our opinion the frequency of verification is notsatisfactory having regard to the size of the Company and nature of its business. c) Wehave not been given the details the title deeds of immovable properties are held in thename of the Company. Hence we are unable to comment as to whether the title deeds ofimmovable properties are held in the name of the Company.
We have not been given the details of physical verification of the inventories carriedout during the period by the management. In our opinion having regard to the nature andlocation of stocks the frequency of the physical verification is not reasonable.
(iii) Loans given
According to Information and explanations given to us we are unable to comment whetherthe Company has granted any Secured or unsecured loan to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013.
(iv) Compliance of Sec. 185 & 186
In our opinion and according to the information and explanations given to us we areunable to comment whether the compnay has complied with the provisions of sections 185& 186 of the companies Act 2013 in respect of grant of loans making investments andproviding guarantees and securities as applicable.
(v) Public Deposit
According to Information and explanations given to us we are unable to comment whetherthe company has accepted any deposits from the public during the year and company not haveany unclaimed deposits thus reporting under this clause not applicable to the Company.
(vi) Cost Records
The company not required to maintaining the cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act accordinglyreporting under this clause not applicable to the Company.
(vii) Statutory Dues
Management has not provided any information and documents to auditor to verify /comment on regularities in depositing undisputed/disputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Wealth Tax Service Tax Custom Duty Excise Duty GST cess andany other applicable to it with the appropriate authorities during the year.
(viii) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company we observed that the Company has defaulted inrepayment of interest and principal amount of all loans to financial institutions banksand government authorities. The Company has not issued any debentures.
The details of amount in default as per details provided in Note 14.B.3.
*The default amount of 546 lacs is as per financial creditors claim admitted byresolution professional.
We can't define the period and amount of default as no statement of accounts has beenprovided by the management of the company.
(ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instrument) any term loans during the period under audit thereforeaccordingly reporting under this clause not applicable to the Company.
(x) Due to the possible effects of the matters stated in basis for Disclaimer ofOpinion we are unable to state whether any fraud on or by the Company or on the companyby its officers or employees has been noticed or reported during the course of audit ifany. Moreover management has not informed us of the same.
(xi) According to information & explanations given to us we are unable to commentwhether managerial remuneration paid by the company to its directors during the year is inaccordance with provisions of Section 197 of the Act read with schedule V to the Act.
(xii) The company is not a Nidhi Company and hence reporting under clause (xii) of theparagraph 3 of the order is not applicable to the Company.
(xiii) Since the company had not made available register of Related Party transactionsmaintained under section 188 and 177 of Companies Act 2013 to us therefore we are unableto report whether all transactions with the related parties are in compliance with section188 and 177 of Companies Act 2013.
(xiv) During the year company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore reporting underclause (xii) of the paragraph 3 of the order is not applicable to the Company.
(xv) According to the information and explanations given to us and on the basis ofrecords given to us we are unable to comment whether company has entered into anynon-cash transactions with directors or persons connected with him.
(xvi) In our opinion and according to the information and explanations given to uscompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
` ANNEXURE B
THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF FOURTHDIMENSION SOLUTIONS LIMITED.
(Referred to in Paragraph 2(F) under the Heading of Report on Other Legal andRegulatory Requirements section of our Report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of M/s FOURTHDIMENSION SOLUTIONS LIMITED as at 31st March 2020 in conjunction with our audit of theFinancial Statements of the Company for the year 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (theGuidance Note) issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Because of the mattersstated in the basis for Disclaimer of Opinion paragraph below we are unable to obtainsufficient appropriate audit evidence to provide a basis for an audit opinion on internalfinancial controls system over financial reporting of the Company.
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.
Basis for Disclaimer of Opinion
The system of internal financial controls over financial reporting with regards to theCompany were not made available to us to enable us to determine if the Company hasestablished adequate internal financial control over financial reporting and whether suchinternal financial controls were operating effectively as at March 31 2020.
Disclaimer of Opinion
We do not express an opinion on Internal Financial Controls of the company under Clause(i) of Sub-section 3 of Section 143 of the Companies Act 2013. Because of thesignificance of the matter described in the basis for disclaimer of opinion para of thisreport we have not been able to obtain sufficient appropriate audit evidence to provide abasis for an opinion on Internal Financial Controls of the company.
We have considered the disclaimer reported in our report in determining the naturetiming and extent of audit tests applied in the audit of the financial statements of theCompany and the disclaimer has affected our opinion on the financial statements of theCompany and we have issued a disclaimer of opinion on the financial statements.