To the members of Trigyn Technologies Limited
Report on the Standalone Indian Accounting Standard ("Ind AS") FinancialStatements for the year ended 31st March 2019
We have audited the standalone financial statements of Trigyn Technologies Limited ("theCompany") which comprise the Balance Sheet as at 31 March 2019 and the Statement ofProfit and Loss (including other comprehensive income) Statement of Changes in Equity andStatement of Cash Flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").In our opinion and to the best of our information and according to the explanations givento us the aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of profit(including other Companyasat31March2019and comprehensiveincome) changes in equity 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 Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor. our opinion
KEY AUDIT MATTERS
Key audit matters (KAM') are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
|Key Audit Matter ||Auditor's Response |
|1 Disputed Tax Matters ||Procedures performed by the Auditor : |
|a) In respect of contingent liability of Rs. 985.14 lakhs on account of Revenue filing an appeal the company's tax consultants views and discussions before the Honourable Bombay High Court for the quantum and penalty for Assessment Year 2007-08 (Refer Note No. 31) ||For tax matters our procedures included examining with Company's legal counsel and tax head; assessing management's conclusions; We also involved our internal tax specialists to gain an understanding and to determine the chances of verdict favouring the company. |
| ||In light of the above we assessed the adequacy of disclosures in Standalone financial statements. |
|b) In respect of certain disallowable expenses/ additions made by the Income Tax Department for Assessment Year 2003-04 estimated at Rs. 1.66 Crores for which no provision has been made in the accounts (Refer Note No. 50) ||For tax matters our procedures included examining the company's tax consultant and subject matter experts views; discussions with Company's legal counsel and tax head; assessing management's conclusions; We also involved our internal tax specialists to gain an understanding and to determine the chances of verdict favouring the company. We have relied upon the external consultants and subject matter experts opinion that the company holds good ground on merits against the disputed additions/disallowables. |
|c) In respect of interest levied by the income tax department amounting to Rs. 1.56 Crores for Assessment Year 2003-04 appearing on the Income Tax website (Refer Note No. 50) ||This being a technical matter we have relied upon the company's decision for non provision of interest. |
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 standalone financial statements and our auditors'report thereon. Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the standalone financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated. If based on the work wehave performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit / loss(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under
Section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error. In preparing thestandalone financial statements management and
Board of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. Board ofDirectors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalone 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 to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast the Company's ability to continue asa going concern. If we conclude that a material uncertainty significant exists we arerequired to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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.
Emphasis of matter
We draw attention to
1. Note No. 43 to the standalone Ind AS financial statements regarding balances ofwound up foreign subsidiaries carried forward in the books requiring approval andpermission from RBI under FEMA regulations.
2. Note No. 49 (b) pertaining to Special Civil Suit filed by the company for recoveryof advances.
3. Note No. 54 regarding search and seizure proceedings carried out by the Income TaxDepartment under Section 132 of the Income Tax Act 1961 where closure orders are notreceived.
(As fully described in the above referred Notes)
Our opinion is not qualified in the above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified paragraphs 3 and 4 of theOrder to the extent applicable.
(A) 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 (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial Standards specified underSection 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". (B) With respect to the othermatters to be included in the Auditors' Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed in their standalone IND AS financial statementsmatters relating to pending litigations as at 31 March 2019 - (Refer Note 31 48 and 49(b)to the standalone financial statements);
ii. As represented by the Company there are no long term contracts includingderivative contracts having material foreseeable losses - (Refer Note 56 to the standalonefinancial statements;
iii. There are no amounts required to be transferred to Investor Education andProtection Fund by the Company - (Refer Note No. 57 to Standalone financial Statement)
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us it isobserved that the remuneration paid to Chairman and Managing Director is in excess of thelimit laid down under Section 197 of the Act. However the company has obtainedshareholders approval through a special resolution dated 22nd March 2019.
For FORD RHODES PARKS & CO.LLP
ICAI FRNo. 102860W/W100089
A. D. Shenoy
Place: Mumbai Date: May 10 2019
Annexure A to the Independent Auditors' Report
[Referred to in paragraph pertaining to "Report on Other Legal and RegulatoryRequirement" of our Report of even date to the members of Trigyn Technologies Limitedon the standalone Ind AS financial statements for the year ended 31st March 2019]
i. a) The company is maintaining proper records showing full particularsincluding quantitative details and situation of fixed. assets
b) Fixed assets have been physically verified by the management at reasonableinterval and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the earlier name of company viz.Leading Edge Systems Limited and process to change to present name is in progress.
ii. The Company's inventory comprises of traded hardware and software.
Inventories have been physically verified by the management at reasonable interval andno material discrepancies were noticed on such verification.
iii. The Company has granted unsecured loans to companies firms or other partiescovered in the register maintained under Section 189 of the Companies Act 2013. Theseloans are interest free and there are no stipulations as to repayment of the loan. In ouropinion and according to the information and explanation given to us the terms andconditions of the loans given by the company are prima facie not prejudicial to theinterest of the company for the reasons fully explained in Note No. 39.
iv. In our opinion and according to information and explanation given to us thecompany has complied with the provision of Section 185 and 186 of the Companies Act withrespect of providing or granting of loans making investments and providing guarantees andsecurities.
v. The company has not accepted deposits from public within the meaning of Sections 73to 76 or any other relevant provisions of the Companies Act 2013.
vi. The Central Government has not prescribed maintenance of cost records under section(1) of Section 148 of the act in respect of any of company's products or activities assuch clause vi of the order is not applicable to the company. vii.
a) According to the information and explanation given to us and records of the companyexamined by us in our opinion the Company is regular in depositing undisputed statutorydues including Provident Fund employee state insurance income tax sales tax valueadded tax service tax custom duty excise duty cess and any other statutory dues withthe appropriate authorities. There are no undisputed statutory dues payable for a periodof more than six month from the date they become payable as at 31st March 2019.
b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of wealth tax service tax customs duty andcess as at 31st March 2019 which has not been deposited on account of dispute except theIncome tax dues which are disputed /pending rectification and not paid are as under:
| ||Period to which the amount relates ||Amount (`) ||Forum where the dispute is pending |
|1 ||A.Y. 2003-04 ||16635900 ||Deputy Commissioner of Income Tax |
|2 ||A.Y.2003-04 ||15635806 ||Deputy Commissioner of Income Tax |
|3 ||A.Y. 2007-08 ||98513683 ||Bombay High court |
|4 ||A.Y. 2011-12 ||200000 ||CIT (Appeal) |
|5 || || || |
| ||A.Y. 2012-13 ||300000 ||Rectification filed losses |
|6 ||A.Y. 2014-15 ||22040 ||The Company is in process of filing rectification |
|7 ||A.Y. 2015-16 ||898480 ||Assistant CIT / CPC Rectification u/s 154 |
|8 ||A.Y. 2017-18 ||2146500 ||CPC Rectification u/s 154 |
|9 ||Various Years ||347920 ||ITO TDS Rectification filed/ to be filed. |
viii. The Company has not raised any fund by way of debentures or through bankfinancial institution or Government.
Hence Clause viii of the Order is not applicable.
ix. The Company has not raised any Initial Public Offer or further public offer duringthe year. The company has obtained term Loan under Hire purchase arrangement and the samewas applied for the purpose for which they were raised.
x. Based upon the audit procedures performed and information and explanations given bythe management we report that we have not come across any instances of fraud by thecompany or any material fraud on the company by its officers or employees that have beennoticed or reported during the year nor have we been informed of such case by management.
xi. In our opinion and according to information and explanation given to us Managerialremuneration paid / provided to Chairman and Managing Director exceeded limits prescribedunder Section 197 read with schedule V to Companies Act 2013. However the company hastaken approval from shareholders through special resolution dated 22nd March 2019.
xii. The Company is not a Chit Fund Company/or nidhi/ mutual benefit fund/society. Assuch Clause xii of the order is not applicable to the Company.
xiii. All transactions with related parties are in compliance with Sections 177 and 188of Companies Act 2013 where applicable and the details have been disclosed in theStandalone Ind AS financial Statement as required by the applicable Accounting Standards.xiv. The Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. As such Clause xiv of the order isnot applicable to the Company. However during the year the company has issued shares onexercise of ESOP by Director /Employees of Company and its subsidiaries.
xv. The Company has not entered into non-cash transactions covered by Section 192 ofCompanies Act 2013 with directors or persons connected with them. xvi. The Company is notengaged in the business of non-banking financial institution (NBFI) and not required toobtain a Certificate of Registration (CoR) from Reserve Bank of India in terms of Section45-IA of the RBI Act 1934.
For FORD RHODES PARKS & CO.LLP
ICAI FRNo. 102860W/W100089
A. D. Shenoy
Date: May 102019
Annexure B to the Independent Auditors' Report
[Referred to in paragraph pertaining to "Report on Other Legal and RegulatoryRequirement" of our Report of even date to the Members of Trigyn Technologies Limitedon the Standalone Ind AS financial statements for the year ended 31st March 2019] Reporton the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial Trigyn TechnologiesLimited ("the Company")reportingof as of March 31 2019 in conjunction withour audit of the Standalone IND AS financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls internal control over financial reporting criteria established by theCompany considering the essential internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting (IFCOFR) issued by theInstitute of Chartered Accountants of India. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.
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 ICAI 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 weakness exists controls over financial and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgments 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 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 of financialregarding the reliability of financial statements for external purposes in accordance withgenerallyacceptedaccountingprinciples.Acompany'sinternalfinancialcontrol 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 authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 reporting may become inadequate because of are subject to therisk that the internal financial control over financial changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to explanation given to usthe Company has in all material reporting and such internal financial controls overrespects an adequate internal financial controls system over financial based on theinternal control over financial reporting financial criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For FORD RHODES PARKS & CO.LLP
ICAI FRNo. 102860W/W100089
A. D. Shenoy
Date: May 10 2019