Trident Tools Ltd. - Quarterly/Annual Result Disclosures and Notes dated 30 Jun 2019

1. The above audited Financial Results were reviewed by the Audit Committee and approved by the Board of Directors at the meeting held on August 19, 2019.

2. This result has been prepared in accordance with Regulation 33 of the SEBI (Listing Obligations and Disclosures Requirement) Regulation, 2015.

3. The company's business operates on single segment and there are no multiple segments for reporting.

4. Events leading to Shutdown of Operations and Factory lock out:
The Company has defaulted in repayment of its various credit facilities obtained from the Punjab National Bank. As a result, the Punjab National Bank ("the Bank") has initiated recovery proceedings under the SARFAESI Act, 2002 to realize the outstanding amount from the Company to the tune of Rs. 75.67 crores as on 31.03.2016 and interest and expenses thereon. Consequently, the Bank has taken possession of the Company's Property, Plant & Equipment and Inventories ("Secured Assets") lying at its Palghar Factory on November 25th, 2017.
The Bank has further issued a notice dated January 25th, 2018 to the Company for Sale of Secured Assets giving the Company an opportunity to repay the outstanding facilities within 30 days of receipt of such notice for sale of secured assets failing which the Bank shall auction the secured assets.

5. Material Events/Litigations having a consequential impact on the financial results:

a. As per the auction notice of the Bank dated 25.01.2018 published in the Free Press Journal newspaper, the bank has not specifically described the land to be a leased land. Consequently, the lessor Metal Extruders (India) Private Limited ("the lessor") took objection to this and filed a case against the Bank under S.A. No. 37 of 2018 in DRT II Vashi, Navi Mumbai and argued the same before Hon'ble DRT. Consequently, the Bank has given an undertaking in the DRT that they will inform the intending buyer that the land is leasehold. The lessor has also filed a case against the Company vide Suit No.127 of 2017 in the Court of Civil Judge, Palghar. As a result, the court granted a stay for status-co position till the case is decided.

b. Cupral Global Trading FZE ("Cupral"), the foreign supplier of imported equipments and technology has an outstanding payment for USD 5,00,000 toward the machinery supplied by them. As per the contract signed between the Company and Cupral all machines supplied them are their property until they receive full payment. Cupral has filed a case in DRT-I Mumbai vide S.A. No. 159 of 2017 both against the Bank and the Company to recover its dues.

c. The employees' representatives through their union have approached Industrial Labour Court at Thane and filed a case against the Company. They have obtained stay order from court for the removal of the Plant & Equipment of the company unless the workmen claims are settled.

The Employees Union have vide their letter Ref. No. AKS/PNB/0026/2019 dated 23.02.2019 have sent their claims updated till January 2019, to the bank with a copy to us claiming Rs. 8,85,68,037 as against total liability provided in the Company's books towards workmen dues Rs. 24,58,803.

d. One of the employee of the Company, Mr Rajendra Lad had filed a case against the Company vide Suit No.180 of 2017 in the Court of Civil Judge, Sr. Division - Palghar for violation of its lease rights as per the lease agreement entered with the Company. Mr. Lad has obtained a stay order from the Court and will continue to occupy the premises till next hearing.

e. The Bank has initiated Corporate Insolvency resolution process under section 7 of Insolvency and Bankruptcy Code, 2016 against the Company and copy of petition bearing CP no. CP(IB)-82(MB)/2019 is served by them on the company. There were 2 hearings with Hon'ble NCLT Mumbai Bench on 08.03.2019 and 16.04.2019 which could not be attended by the Directors or their representatives as the notice was not served to the directors at their residential address as informed by Directors to the Bank vide their letter dated 17.12.2018. The next hearing which was scheduled for 03.06.2019 had been attended by the director and the order is awaited in this respect.

6. The Auditors have stated in their Independent Audit report dated August 19, 2019 that they are unable to comment whether the Company can operate as a going concern and its consequential impact on the financial statements is presently not ascertainable. The auditors have further stated that no provisions / adjustments have been made in the financial statements as may arise towards

i. Impairment loss in respect of Plant & Equipment as a result of the events explained under note 5 - presently not ascertainable.

ii. Adjustments to the carrying value of Inventories arising as a result of the events explained under note 5 - presently not ascertainable

iii. Adjustments arising on receipt of pending confirmations / reconciliations of certain Banks, Loans & Advances given, Other current assets, Lenders' liability, Trade Payables and Other liabilities - presently not ascertainable.

iv. Adjustments arising as a result of non-tracing of the investment documents - presently not ascertainable.

v. Interest / Compound Interest / penalty on delayed / non-payment in respect of certain statutory dues / Loan from secured and unsecured lenders - presently not ascertainable.

vi. Impact of the Re-measurement cost of net defined liability not being considered by the Company for various periods - presently not ascertainable.

7. Management Comments on above:

Pending revival of the Company; these accounts have been prepared on a going concern basis without giving effect to any provisions / adjustments in relation to below matters:
i. In view of the events explained in note 5 regarding factory lockout, the Management is unable to assess the condition of the Plant & Equipment more particularly in view of no maintenance and servicing of the same in past 2 years post the factory lockout initiated by the Bank under the SARFAESI proceedings and accordingly cannot assess / evaluate its realizable value. Accordingly, the Company has not carried out impairment testing of its Plant & Equipment as required by Ind

AS 36 'Impairment of Assets'. The Company will be able to account for the same as and when such proceedings are completed and the Management will have a clear picture of the realizable value of the remaining assets, if any, after the conclusion of such proceedings.
ii. In view of the events explained in note 6 regarding factory lockout, the Management is unable to assess the condition of the Inventories lying at the factory and thus cannot assess / evaluate its realizable value.

iii. Confirmation/ Provision / Reconciliation of certain Banks, Loans & Advances given, Other Current Financial Assets, Other current assets, Details of Investments, Lenders' liability, Trade Payables Other Financial liabilities and Other Current liabilities are not available. However, on receipt, the same will be reviewed by the Company. Consequential adjustments arising thereon, which are presently not ascertainable, will be made.

iv. With the exit of all employees, and almost shut down of all business activities, the management could not trace all the investment documents / evidence and would try to trace the same.

v. Interest / Compound Interest / penalty on delayed / non-payment in respect of certain statutory dues / Loan from secured and unsecured lenders are presently not available with the Company and the same will be provided for as and when the information is available with the Company. However, Interest expenses on its outstanding credit facilities have been provided by the Company @ interest rates as per the available sanction letters with the Company upto September 30, 2017 in its books of accounts. The Company expects that the Bank will either waive the Interest component or not charge Interest for the period post September 30, 2017.

vi. Re-measurement cost of net defined benefit liability has not been provided by the Company for the quarters ended June 30 2019, March 31 2019, June 30, 2018, and for the year ended March 31, 2019 in view of lockdown of the factory, no workers on payroll and already incurred losses. Liability, if any arising on settlement of workmen claims as highlighted in point 6.c above shall be provided on crystallization of the final claim amount.

8. The previous period's figures have been re-grouped/ re-classified wherever required to conform to current period's classification. All figures of financials has been rounded off to nearest Lakhs rupees.

Ravi N Gupta
Managing Director