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Trident Texofab Ltd.

BSE: 540726 Sector: Others
NSE: N.A. ISIN Code: INE071Y01013
BSE 00:00 | 23 Oct 27.10 -1.40
(-4.91%)
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NSE 05:30 | 01 Jan Trident Texofab Ltd
OPEN 28.00
PREVIOUS CLOSE 28.50
VOLUME 1459
52-Week high 49.50
52-Week low 25.15
P/E 104.23
Mkt Cap.(Rs cr) 27
Buy Price 27.10
Buy Qty 1370.00
Sell Price 29.00
Sell Qty 100.00
OPEN 28.00
CLOSE 28.50
VOLUME 1459
52-Week high 49.50
52-Week low 25.15
P/E 104.23
Mkt Cap.(Rs cr) 27
Buy Price 27.10
Buy Qty 1370.00
Sell Price 29.00
Sell Qty 100.00

Trident Texofab Ltd. (TRIDENTTEXOFAB) - Auditors Report

Company auditors report

To the Members of TRIDENT TEXOFAB LIMITED

Report on the Audit of Financial Statements

We have audited the accompanying financial statements of TRIDENT TEXOFAB LIMITED (theCompany) which comprise the Balance sheet as at March 31 2019 the Statement of Profit& Loss and the Statement of Cash flow for the year then ended and a summary ofsignificant 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act.

Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto out audit of the financial statements under the provisions of the Act and Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the current period. These matters were addressed in thecontext of our audit of the financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.

Revenue Recognition
The key audit matter How the matter was addressed in our audit
Revenue from sale of goods is recognized when control of the products being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The performance obligations in the contracts are fulfilled at the time of dispatch delivery or upon formal customer acceptance depending on customer terms. Revenue is measure at fair value of the consideration received or receivable after deduction of any trade discounts volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax etc. accumulated experience is used to estimate the provision for discounts and rebates. Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur. Rebates and discounts are material and have arrangements with varying terms which are based on annual contracts or shorter term arrangements. In addition the value and timing of promotions for products varies from period to period and the activity can span over a year end. There is a risk of revenue being overstated due to fraud including through manipulation of rebates and discounts resulting from pressure the management may feel to achieve performance targets at the reporting. Our audit procedures included:
• We assessed the appropriateness of the revenue recognition accounting policies including those relating to rebates and discounts by comparing with applicable accounting standards.
• We tested the design implementation and operating effectiveness of management's general IT controls and key application controls over the Company's IT systems which govern revenue recognition including access controls controls controls over program changes interfaces between different systems and key manual interval controls over revenue recognition to assess the completeness of the revenue entries being recorded in the general ledger accounting system.
• We tested the design implementation and operating effectiveness of controls over the calculation of discounts and rebates.
• We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents which included goods dispatch notes and shipping documents.
• We inspected on a sample basis key customer contracts to identify terms and conditions relating to goods acceptance and rebates and assessing the Company's revenue recognition policies with reference to the requirements of the applicable accounting standards.
• We performed substantive testing by selecting samples of rebate and discount transactions recorded during the year and comparing the parameters used in the calculation of the rebate and discounts with the relevant sources documents (including invoices schemes and contracts) to assess whether the methodology adopted in the calculation of the rebates and discounts was in accordance with the terms and conditions defined in the schemes and corresponding customer contract.
• We performed cut-off testing for samples of revenue transactions recorded before and after the financial year end dated by comparing with relevant underlying documentation which included goods dispatch notes and shipping documents to assess whether the revenue was recognized in the correct period.
• We assessed manual journals posted to revenue to identify unusual items.

Provisions for taxation litigation and other significant provisions

See note 9 to the financial statements

The key audit matter How the matter was addressed in our audit
Accrual for tax and other contingencies requires the Management to make judgments and estimates in relation to the issues and exposures arising from a range of matters relating to direct tax indirect tax claims general legal proceedings and other eventualities arising in the regular course of business. Our audit procedures included:
• We tested the effectiveness of controls around the recognition of provisions.
• We used our subject matter experts to assess the value of material provisions in light of the nature of the exposures applicable regulations and related correspondence with the authorities.
The key judgment lies in the estimation of provisions where they may differ from the future obligations. By nature provision is difficult to estimate and includes many variables. Additionally depending on timing there is a risk that costs could be provided inappropriately that are not yet committed. • We challenged the assumptions and critical judgments made by management which impacted their estimate of the provisions required considering judgments previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Company's advisors and assessing whether there was an indication of management bias.
• We discussed the status in respect of significant provisions with the Company's legal team.
• We performed retrospective review of management judgments relating to accounting estimate included in the financial statement of prior year and compared with the outcome.

Assessment to contingent liabilities relating to litigations and claims

See note 1(j)(iii) to the financial statements

The key audit matter How the matter was addressed in our audit
The Company is periodically subject to challenges/ scrutiny on range of matters relating to direct tax indirect tax further potential exposures may also arise from general legal proceedings etc. in the normal course of business. Our audit procedures included:
Assessment of contingent liabilities disclosure requires Management to make judgments and estimates in relation to the issues and exposures. Whether the liability is inherently uncertain the amounts involved are potentially significant and the application of accounting standards to determine the amount if any to be provided as liability is inherently subjective. • We tested the effectiveness of controls around the recording and re-assessment of contingent liabilities.
• We used our subject matter experts to assess the value of material contingent liabilities in light of the nature of exposures applicable regulations and related correspondence with the authorities.
• We discussed the status and potential exposures in respect of significant litigation and claim with the Company's internal legal team including their views on the likely outcome of each litigation and claim and the magnitude of potential exposure and sighted any relevant opinions given by the Company's advisors.
• We assessed the adequacy of disclosures made.
• We discussed the status in respect of significant provisions with the Company's legal team.
• We performed retrospective review of management judgments relating to accounting estimate included in the financial statement of prior year and compared with the outcome.

Other Information

The company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with out audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If bases on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management's Responsibility for Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromerror as fraud may involve collusion forgery intentional omissions misrepresentationsor the override of internal control.

• 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 with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting polices used and reasonableness ofaccounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and bases 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 financial statement or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charges 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 relationship and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charges with governance we determine thosematters that were of mostsignificance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in outauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a mater should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 Section 143(11) of the Act we givein the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Orderto the extent applicable.

2. 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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 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 terms of Section164 (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 2" to this report;

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 information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigation on its financialposition in its financial statements. Refer Note 1.(j).(iii) & (iv) to the financialstatements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) The company has declared and paid Equity dividend to its shareholders.

Place: Surat Date: 29th May 2019

For Bipinchandra J Modi & Co.

Chartered Accountants Dency Kabrawala

Partner

Membership No: 162050 FRN No. 101521W

TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date

To the Members of Trident Texofab Limited

(i) In respect of its fixed assets:

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

(b) As explained to us physical verification of fixed assets was conducted by themanagement at reasonable intervals. Having regard to the size of the operation of thecompany and on the basis of explanation received in our opinion no materialdiscrepancies were observed during such verification.

(c) As explained and information provided to us the title deeds of immovableproperties included in property plant and equipments are held in the name of the companyexcept one property where legal proceedings for transfer in the name of the company is inprogress.

(ii) In respect of its inventories:

(a) As explained and information provided to us the company has maintained properrecords of inventory. Inventory defined in categories of finished goods and raw materialsin the company's custody have been physically verified by the management as at the end ofthe financial year or after the year end. There is a perpetual inventory system and asubstantial portion of the stock has been verified during the year. In our opinion thefrequency of verification is reasonable the procedure of physical verification of stocksfollowed by the management is adequate in relation to size of the company and the natureof its business.

(iii) The Company has granted unsecured loans to parties covered in the Registermaintained under section 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to theCompany's interest

(b) The repayments or receipts are regular and repayment of principal and payment ofinterest has been stipulated and repayment and receipts are regular.

(c) There is no overdue of amount.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 186 of the Companies Act 2013 in respect of investments made havebeen complied with by the company and the company has also complied with provisions of thesection 185 of the Companies Act 2013.

(v) The Company has not accepted any deposits from public within the meaning ofSections 73 and 74 of the Act and the rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of the company'sproducts and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.

(vii) According to the information and explanation given to us the company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund investor education and protection fund employees' stateinsurance income tax wealth tax customs duty excise duty cess and other material duesapplicable to it.

(a) According to the information and explanation given to us no undisputed amountpayable in respect of income tax sales tax customs duty cess excise duty were inarrears as at 31st March 2019 for a period of more than six month from the date theybecome payable.

(b) According to the information and explanations given to us there are no dues ofincome tax or sales tax or duty of customs or duty of excise or value added tax which havenot been deposited with the appropriate authorities on account of any dispute.

(viii) According to the records of the Company examined by us and explanation given tous the Company has not defaulted in repayment of dues to any financial institution andbanks.

(ix) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management the company has raised ' 2.02 crores through preferentialallotment on private placement basis 200000 preference shares @ ' 101.48 per share forthe purpose of funding of working capital requirements of the company for business growthand expansion plans and strategies set out by the management. The company has fullyutilized the said full amount till 31st March 2019 for the said stated purpose.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanation given to us we have neither come across anyinstance of material fraud on or by the Company noticed or reported during the year norwe have been informed of any such case by the Management.

(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationgiven by the management we report that the company has paid / provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause (xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information and explanationgiven by the management transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 wherever applicable and wherever applicableand the details have been disclosed in the notes to the financial statements as requiredin the notes to the financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanation given to us and on an overallexamination of the balance sheet the company has made preferential allotment on privateplacement of 200000 preference shares during the year but not issued any partlyconvertible debentures during the year under review.

(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationgiven by the management the Company has not entered into any no-cash transaction withdirectors or persons connected with them.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For Bipinchandra J Modi & Co.

Chartered Accountants

Firm Registration No.:101521W

Sd/-

Dency Kabrawala

Partner

Membership No: 162050

Place: Surat

Date: 29th May 2019

TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF TRIDENTTEXOFAB LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143(3)(i) of the Companies Act 2013 ('the Act")

To the Members of Trident Texofab Limited

We have audited the financial controls over financial reporting of TRIDENT TEXOFABLIMITED (" the Company") as of March 31 2019 in conjunction with our audit ofthe financial 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 issued by lCAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

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 March 31 2019 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 Bipinchandra J Modi & Co.

Chartered Accountants

Firm Registration No.:101521W

Sd/-

Dency Kabrawala

Partner

Membership No: 162050

Place: Surat Date: 29th May 2019

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