To The Members of Trident Tools Limited
Report on the Audit of Financial Statements
We have audited the accompanying financial statements of Trident Tools Limited("the Company") which comprises of Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flow for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2019 its losses (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the financial statements.
Basis for Qualified Opinion:
a. The Company has not carried out impairment test as required by Ind AS 36Impairment of Assets' particularly in respect of Plant & Equipment. We areunable to comment as to when and to what extent the carrying value of Plant &Equipment (WDV as on 31st March 2019 is Rs.4556.05 Lakhs) would be recovered. The impactof the same on the loss for the year accumulated losses and total assets as at theyear-end is presently not ascertainable.
b. The Company has claimed some portion of the Interest charged by the bank as beingexcess charged and thus recoverable which the Company has continued to classify under"Other Current Financial Assets". In the absence of relevant informationconfirmation / reconciliation from the Bank we are unable to comment upon itsrecoverability and corresponding impact on the loss of the year if any.
c. The Company has continued to carry its Investments at fair value however it couldnot produce before us the evidence of Investments held by the Company in equity shareseither in physical form (Share certificate) or in dematerialized form. In view of the samewe are unable to comment on its recoverability / realization and its consequential impacton the loss for the year and carrying value of the investments.
d. The Company has continued to value its inventories of raw materials work inprogress and finished goods for the year ended March 31 2019 at the same value asconsidered in the financial statements as on March 31 2018 in view of no furtheroperations during the year ended March 31 2019. The Bank has valued such inventories atreserve price/ bid increment in its notice for Sale of Secured assets dated January 252018 at Rs. 49.56 lakhs as compared to the carrying value of Rs.191.75 lakhs (incl. ofexcise duty) in the books of accounts as of March 31 2019. We are unable to comment onthe consequential impact on the loss of the Company owing to absence of appropriatevaluation of cost / Net realizable value of such inventories for the year ended March31st 2019.
e. The accounts of certain Banks Loans & Advances given Trade Receivables OtherCurrent Assets Lenders' liability Trade Payables and Other liabilities are subject toconfirmations reconciliations and adjustments if any having consequential impact on theloss for the period accumulated losses assets and liabilities as at the period end theamounts whereof are presently not ascertainable.
f. Liability as may arise towards interest / compound interest / penalty on delayed /non-payment to certain statutory dues / Lenders as at the period end as explained in NoteNo 26(iii) to the financial statements the amounts whereof are presently notascertainable.
g. The Company has not considered re-measurement cost of net defined benefit liabilityfor the year ended March 31 2019 in accordance with IND AS 19. We are unable to commenton any consequential impact in respect of the same loss for the period accumulatedlosses liabilities as at the period end the amounts whereof are presently notascertainable.
h. There are various Legal Cases filed by / against the Company in absence ofappropriate details of such legal cases we are unable to comment on any consequentialimpact in respect of the same loss for the period accumulated losses liabilities as atthe period end the amounts whereof are presently not ascertainable.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Companies Act 2013 (the Act)in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 its profits (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.
Material Uncertainty Related to Going Concern:
We draw attention to Note No. 25(iii) to the Financial Statements which indicates thatthe Company having already eroded its networth and its continued incurrence of substantiallosses during the year ended March 31 2019 and despite of the events explained in note25(iii) to the financial statements continues to present the audited financial statementson a going concern basis. These events raise significant doubt on the ability of theCompany to continue as a "Going Concern". These events or conditions along withother matters indicate that a material uncertainty exists that may cast significant doubton the Company's ability to continue as a going concern. This being a technical matter weare unable to comment as to whether the Company can operate as a going concern and also asto the extent of the effect of the resultant adjustments to the accumulated losses assetsand liabilities as at the period end and losses for the period which are presently notascertainable.
Key Audit Matter
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Information Other than the Financial Statements and Auditor's report thereon
The Company's Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board report CorporateGovernance report and Shareholder's information but does not include the financialstatement and our auditor's report thereon.
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 our 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 during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and those charged with Governance for the FinancialStatements
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 financial statements that givea true and fair view of the financial position financial performance (including othercomprehensive income) changes in equity 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 (Account) Rules2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of 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 the 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 are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken 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 fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or 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 control 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 entity'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 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 auditor'sreport. However future events or conditions may cause the entity 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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of a reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work and (ii) to evaluate the effect of any identifiedmisstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter 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. Pursuant to 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.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and except for the possible effects of matters described in theBasis for Qualified Opinion paragraph obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our auditof the aforesaid Ind As Financial Statements.
(b) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion proper books of account as required by law relating topreparation of the aforesaid Ind As Financial Statements have been kept by the Company sofar as it appears from our examination of those books.
(c) The Balance sheet the Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) Except for the possible effects of matters described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of Companies Act 2013 read withrule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of the written representation received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a Directors in terms of Section 164(2) of theAct.
(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 "B".
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Sec 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
(h) With respect to the matters to be included in the Auditor's report in accordancewith the rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and tothe best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements. [Refer Note No. 24(b)]
ii. Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph the Company has made provision as required under the applicable law orInd AS for material foreseeable losses if any on long term contracts.
ii. There are no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
| ||For Bagaria & Co. LLP |
| ||Chartered Accountants |
| ||Firm Registration No: |
| ||113447W/W-100019 |
| ||Vinay Somani |
|Place : Mumbai ||Partner |
|Date : June 3 2019 ||Membership No: 143503 |
"Annexure A" to the Independent Auditor's Report - 31.03.2019
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The Management has not physically verified the Plant and Equipment's situated atits Palghar Factory as it is under the possession of the Bank. For other fixed assetsverified no material discrepancies were noticed on such verification. However we have notbeen provided with any report / working papers of such physical verification.
(c) The land appearing in the books of the Company is a leasehold land. The Buildingsappearing in the books of the Company are under the ownership of the Company.
2. The Management has not physically verified the inventory during the year sincethe same is under the possession of the bank. We are not provided with the details /records of physical verification and reconciliation done by the bank if any. Accordinglywe are unable to comment on para 3(ii) of the Order.
3. According to the information and explanations given to us and on the basis ofour examination of the books of account the Company has not granted any loans secured orunsecured to companies firms or other parties listed in the register maintained underSection 189 of the Companies Act. Accordingly the paragraph 3(iii)(a) 3(iii)(b) and3(iii)(c) of the order are not applicable to the Company.
4. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of loans investments guarantees and security.
5. According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under arenot applicable to the Company.
6. As per the information and explanation given to us the Company is not requiredto maintain cost records pursuant to the rules issued by the Central Government underSection 148(1) of the Act and accordingly paragraph 3(vi) of the Order is not applicableto the Company.
7. (a) According to the information and explanations given to us and on the basisof our examination of the books of account and records the Company has not been regularin depositing its undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Wealth Tax Service Tax duty of customs duty ofexcise value added tax cess to the extent applicable and any other statutory dues withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the above were outstanding as at March 31 2019for a period of more than six months from the date they became payable except for thefollowing:
|Name of the Statute ||Nature of the Dues ||Amount (Rs.) ||Period to which the amount relates ||Due Date ||Date of Payment |
| ||Tax collected at Source ||6324 ||FY 2015-16 & FY 2016-17 ||Various ||Not Paid |
| ||Tax deducted at Source ||14339 ||FY 2016-17 ||Various ||Not Paid |
|Income Tax Act ||Tax deducted at Source ||4045 ||FY 2017-18 ||Various ||Not Paid |
|1961 ||Income Tax ||5789871 ||FY 2013-14 ||Various ||Not Paid |
(b) According to the information and explanations given to us there are no dues ofincome tax wealth tax service tax sales tax duty of customs duty of excise valueadded tax cess which have not been deposited on account of any dispute except as statedbelow:
|Name of the Statute ||Nature of Dues ||Amount (Rs.) ||Period to which amount relates ||Forum where dispute is pending |
|The Central Excise Act 1944 ||Central Excise ||1000000 ||FY 2001-02 ||Add. Commissioner |
|The Customs Act 1962 ||Customs Duty ||6636125 ||- ||Asst. Commissioner |
|The Central Sales Tax Act 1956 ||Central Sales Tax ||24288494 ||FY 2012-13 ||Dy. Commissioner |
8. In our opinion and according to the information and explanations given to usthe Company has not taken any loan either from financial institutions or from thegovernment and has not issued any debentures. The Company has availed various loanfacilities from Bank. The Company has in the past defaulted in repayment of dueinstalments and has accordingly entered into reschedulement / restructuring with the Bank.The Company has also further defaulted in the repayment of rescheduled / restructuredrepayment terms with the Bank. The amount of default as per the possession notice of theBank is Rs. 756734531 plus interest thereon from 01.04.2016 until payment vis--visRs. 444525335 as reflected in the books of accounts of the Company as on 31stMarch 2019. However the Company has disputed the said amount and has not made any paymenttowards such dues. Due to the nature of dispute and unavailability of the data exactamount and period of default could not be ascertained.
9. The Company has not raised any moneys by way of initial public offer or furtherpublic offer. Based on our audit procedures and the information & explanations givenby the management we report that the Company has applied the moneys raised from termloans for the purpose for which they were raised.
10. Based upon the audit procedures performed and the information and explanationsgiven by the Management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
11. The Company has not paid / provided any managerial remuneration during the yearand accordingly paragraph 3 (xi) of the Order is not applicable to the Company.
12. In our opinion the Company is not a Nidhi Company. Therefore the paragraph 3(xii) of the Order are not applicable to the Company.
13. Based on the audit procedures performed and the information and explanationsgiven to us all transactions with the related parties are in compliance with section 177and 188 of the Companies Act 2013 and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards. Refer Note No. 24 to theFinancial Statements.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the paragraph 3 (xiv) of the Order are not applicable to the Company.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the paragraph 3 (xv) of the Orderare not applicable to the Company.
16. In our opinion the Company is not required to be registered under section 45IAof the Reserve Bank of India Act 1934 and accordingly the paragraph 3 (xvi) of the Orderare not applicable to the Company.
| ||For Bagaria & Co. LLP |
| ||Chartered Accountants |
| ||Firm Registration No: |
| ||113447W/W-100019 |
| ||Vinay Somani |
|Place : Mumbai ||Partner |
|Date : June 3 2019 ||Membership No: 143503 |