The Members of
Trident Tools Limited
Report on the Financial Statements
We have audited the accompanying financial statements of M/s Trident Tools Limitedwhich comprise the Balance Sheet as at March 31 2018 the Statement of Profit and Lossthe Cash Flow Statement for the year then ended and a summary of significant accountingpolicies and other explanatory information.
Management's Responsibility for the 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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion
(a) Material Uncertainty Relating to Going Concern
The Company has incurred loss in the current year as well as in the preceding year andthe accumulated losses has exceeded its entire net worth. The financial statements havehowever been prepared by the management on a going concern basis as explained in note1(A)(a). This being a technical matter and in view of uncertainty we are unable toexpress an opinion as to whether the Company can operate as a going concern and also as tothe extent of the effect of the resultant adjustments to the accumulated losses assetsand liabilities as at the year-end and losses for the year which is presently notascertainable.
(b) The Company has not carried out impairment test as required by Indian AccountingStandard ( Ind AS) 36 'Impairment of Assets' particularly in respect of Plant andEquipment . We are unable to express an opinion as to when and to what extent the carryingvalue of Plant & Equipment (WDV as on 31st March 2018 is Rs.5292.15 Lakhs) would berecovered. The impact of the same on the loss for the year accumulated losses assets andliabilities as at the year-end is presently not ascertainable. (as explained in Note No 29of the Financial Statement)
(c) The accounts of certain Banks Loans & Advances given Other non- currentassets Lenders' liability Trade payables and Other liabilities are subject toconfirmations reconciliations and adjustments if any having consequential impact on theloss for the year accumulated losses assets and liabilities as at the year- end theamounts whereof are presently not ascertainable.(as explained in Note No 30 of theFinancial Statement)
(d) Liability as may arise towards interest/compound interest/penalty ondelayed/non-payment to certain trade payables /statutory dues/ Promoter Contribution/Lenders is presently not ascertainable. so the Company is expecting relief and concessionand therefore not provided for. (as explained in Note No 31 of the Financial Statement)
We invite your attention to Note no. 4 Note No. 19 & Note No. 20 of the FinancialStatements regarding Inventory valuation which is stated to be valued at lower of cost ornet realizable value on basis of physical stock taking/consumption reconciliation. Thevalue of the inventory as on 31st March 2018 is accordingly is based on costor net realizable value whichever is lower. Such estimates have been made by theManagement on the basis of the past experiences and considering the global scenario of theindustry. However since we have not been provided with the details of such identification& valuation we are unable to comment on the consequential impact in respect of thesame on the results for the year ended March 31 2018.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid 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 March 31 2018 its loss and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to Note 3 of the notes forming part of the financial statements forthe year ended March 31 2018 the Company is carrying MAT Credit Entitlement amounting toRs. 84.28 lakhs utilization of which is uncertain in the near future in view of theaccumulated losses and financial performance of the Company. Our opinion is not qualifiedin respect of this matter.
We draw attention to Note 22 of the notes forming part of the financial results for theyear ended March 31 2018 the Company has provided the Interest on its NPA accounts till30th September 2017 on an estimated basis as per the terms and conditionsagreed with the Bank for the said facilities. Our opinion is not qualified in respect ofthis matter.
We draw attention to Note 1(A)(a) wherein in the opinion of the management despiteincurring substantial losses including during the year ended March 31 2018 and in view ofthe already existing negative net worth as at March 31 2018 the audited financialresults have been prepared on a going concern basis in view of matters more fullyexplained in the said note. Our opinion is not qualified in respect of this 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 G overnment 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 said Order.
2. As required by section 143(3) of the Act we report that:
a) We have sought & obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) Except for the possible effects of the matter described in the Basis forQualified Opinion paragraph above in our opinion proper books of account as requiredby law have been kept by the Company so far as it appears from our examination of thosebooks.
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) Except for the possible effects of the matter described in the Basis forQualified Opinion paragraph above in our opinion the aforesaid financial statementscomply with the Accounting Standards specified under section 133 of the Act read withrule 7 of the Companies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director 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 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 details of its pending litigations which would impactits financial position in its financial statements - Refer Note 24.
(ii) The Company does not have any long term contracts including derivative contractsfor which there were any material foreseeable losses; and
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Bagaria & Co. LLP
Firm's Registration No. - 113447W/W-100019
Membership No.: 143503
June 20th 2018
"Annexure A" to the Independent Auditor's Report - 31.03.2018
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) As explained to us all fixed assets have not been physically verified by themanagement during the year. For the fixed assets verified no material discrepancies werenoticed on such verification. However we have not been provided with any report/workingpapers on 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 physically verified the inventory during the year; discrepanciesfound on such verification have been accounted as consumption in the books. Howeverdetails/records of such physical verification and consumption reconciliation are not beenprovided to us for our verification. Accordingly we 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 of ourexamination 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 us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in 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 required tomaintain cost records pursuant to the rules issued by the Central Government for themaintenance of cost records under Section 148(1) of the Act and accordingly paragraph3(vi) of the Order is not applicable to the Company.
7. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account and records the Company has delayed indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Sales-tax Wealth Tax Service Tax duty of customs duty of excise valueadded tax cess to the extent applicable and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the above were outstanding as at March 31 2018 for a periodof more than six months from the date they became payable except for the following:
|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 |
|Income Tax Act ||Tax deducted at Source ||178767 ||April 2016 to August 2017 ||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 |
|Period to which amount relates ||Forum where dispute is pending |
|The Central Excise Act1944 ||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 ||49412450 ||FY 2012-13 ||Dy. Commissioner |
8. In our opinion and according to the information and explanations given to us theCompany has not taken any loan either from financial institutions or from the governmentand has not issued any debentures. The Company has availed various loan facilities fromBank. The Company has in the past defaulted in repayment of due instalments and hasaccordingly entered into re-schedulement/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-a-vis Rs.444525335 as reflected in the books of accounts of the Company as on 31stMarch 2018. 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. The Based on our audit procedures and the information & explanationsgiven by the management we report that the Company has applied the moneys raised fromterm loans 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 paid and or provided the managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act.
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 explanations givento us all transactions with the related parties are in compliance with section 177 and 188of the Companies Act 2013 and the details have been disclosed in the Financial Statementsas required by the applicable accounting standards.
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 45IA ofthe Reserve Bank of India Act 1934 and accordingly the paragraph 3 (xvi) of the Orderare not applicable to the Company.
For Bagaria & Co. LLP
Firm's Registration No. - 113447W/W-100019
Membership No.: 143503
June 20th 2018
"Annexure B" to the Independent Auditor's Report - 31.03.2018
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("IFCoFR") of Trident Tools Limited ("the Company") as of March31 2018 in conjunction with our audit of the financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. 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.
Our responsibility is to express an opinion on the Company's IFCoFR based on our audit.We conducted our audit in accordance with the Guidance Note on Audit of IFCoFR (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate IFCoFR wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
A company's IFCoFR is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR 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 IFCoFR including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that the IFCoFR may become inadequate because of changesin conditions or that the degree of compliance with the policies or procedures maydeteriorate.
Basis for Qualified Opinion
In our opinion according to the information and explanations given to us and based onour audit procedure performed the following material weakness has been identified in theoperating effectiveness of the Company's IFCoFR as at March 31 2018:
The Company's internal financial controls in respect of supervisory and review controlsover process of determining of (a) carrying value and quantitative records of theInventories and its adequate documentation/records were not operating effectively. Absenceof aforesaid assessment in accordance with the accounting principles generally accepted inIndia could potentially result in a material misstatement in the carrying value ofInventory and consequently could also impact the financial statements.
A 'material weakness' is a deficiency or a combination of deficiencies in IFCoFRsuch that there is a reasonable possibility that a material misstatement of the company'sannual or interim financial statements will not be prevented or detected on a timelybasis.
In our opinion except for the possible effects of the material weakness describedabove in the Basis for Qualified Opinion paragraph the Company has in all materialrespects maintained adequate IFCoFR as at 31 March 2018 based on internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI and theCompany's IFCoFR were operating effectively as at 31 March 2018.
We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the financialstatements of the Company as at and for the year ended 31 March 2018 and the materialweakness has affected our opinion on the financial statements of the Company and we haveissued a qualified opinion on the financial statements.
For Bagaria & Co. LLP
Firm's Registration No. - 113447W/W-100019
Membership No.: 143503
June 20th 2018.