We have audited the standalone Ind AS financial statements of Atlas Cycles (Haryana) Limited ("the
Company") which comprise Balance Sheet as at 31st March, 2024, the Statement of Profit and Loss,
(including other comprehensive income), the Cash Flow Statement and statement of changes in equity for
the year then ended, and a summary of the significant accounting policies and other explanatory information
(hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for
the possible effects of the matters described in the 'Basis of Qualified Opinion' section of our Report, the
aforesaid standalone Ind AS financial statements give the information required by the companies Act 2013
(the Act) in the manner so required and give a true and fair view in conformity with the Indian accounting
standards ("IND AS") prescribed under section 133 of the act read with the companies (Indian accounting
Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March 2024, of its Loss, total comprehensive income, changes in
equity and its cash flows for the year ended on that date.
Basis of Qualified Opinion
As explained in notes to standalone financial statements for the year ended 31st March 2024,
1. Refer Notes 8.1, 8.2 and 14.1 of the statement, we are unable to comment on the current status of suit
filed for earlier year by the Company for criminal and recovery proceedings filed for above referred
matters.
2. Refer Note 9 of the statement, the Physical Stock taking at Sonepat and Sahibabad units have not
been carried out as at the Balance Sheet date .Hence, we are unable to comment on the physical
stock position at Sonepat and Sahibabad units amounting to Rs. 1,92,00,000/- and Rs. 1,90,80,495/-
respectively.
3. Refer Note 9.1, Since the Company is not having its manufacturing activities operational as on the date
of report, the stock in trade is valued at cost instead of valued at cost or net realizable value whichever
is lower. Quantification of effect is not ascertainable in absence of Net realizable value, marketability
and usability of stock.
4. Refer Note 11 of the statement, in absence of reconciliation with individual debtors and in absence
of balance confirmations from debtors, we are unable to comment upon position of debtors of Rs
2,66,99,250/- considered as good.
5. Refer Note 23.1 and Note 40, The Company has not provided for the interest on overdue outstanding
payment of creditors including MSMEs and on suits filed by creditors in different courts. Exact quantum
of liability is not ascertainable in absence of reconciliations with suppliers and balance confirmations by
suppliers; however, the Company has disclosed in contingent liability regarding claims of interest filed
by creditors in different courts.
6. Refer Note 2 of the significant policies to the statement, we are unable to comment on certain current
accounts with banks as we have not been provided with certain bank statements for the year under
report claimed to be non- operative in books of the Company.
7. Refer Note 5.1 of the statement, Special attention is brought on unquoted investment In equity shares,
mutual fund and debentures.
8. Refer Note 20.1, we are unable to comment upon transaction relating Rs. 5,90,00,000/- as advance
received against sale of non- core asset in absence of Proper Agreement to sell/ Sale deed or explanation
provided to us.
9. Refer Note 7 of the statement, the Company has not provided for deferred tax Liability/ Deferred tax
asset during the year 2023-24 .
10. The Company has not provided reconciliation of books with AIS, TIS and 26AS "ANNUAL TAX STATEMENT"
as per Income Tax portal.
11. Refer note 22.1, the Company has defaulted in repayment of Inter corporate Loan within stipulated
time as per the agreed terms. Further, the Company has not recognized interest expense on the
borrowings of the Company. The accumulated interest not provided as on 31st March 2024 is Rs.
3,96,00,000/-(including Rs. 99,00,000/- for the financial years 2023-24, Rs. 99,00,000/- for the financial
years 2022-23, Rs. 99,00,000/- for the financial years 2021-22 and Rs. 99,00,000/- 2020-21, calculated
at simple interest rate) which is not in accordance with the requirement of Ind AS 23; Borrowing Cost.
The Company has understated losses to the tune of Rs. 99,00,000/- for FY 2023-24.
12. Refer Note 36.1 , the Company has not provided for Statutory Audit fee during the financial year 2023¬
24, hence understated losses to the tune of Rs. 29,00,000/- . The accumulated Statutory Audit fee not
provided as on 31st March 2024 is Rs. 1,16,00,000/- (including Rs. 29,00,000/- for the financial years
2023-24, Rs. 29,00,000/- for the financial years 2022-23, Rs. 29,00,000/- for the financial years 2021-22
and Rs. 29,00,000/- 2020-21).
13. Refer Note 25.2 and Note 11.1, The Company has neither exported goods nor disclosed advance against
export sales as per FEMA regulations amounting Rs.26,02,620/- in Sahibabad unit and Rs. 53,57,299/-
in Sonepat unit respectively.
14. The Company has not provided for Gratuity liability as per IND-AS 19 as on Balance Sheet date and
further we are unable to quantify the effect of the same due to unavailability of Actuarial valuations and
significant records.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by
the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the standalone financial statements are free from material misstatement. We are independent
of the Company in accordance with the code of ethics issued by The Institute of Chartered Accountants
of India and we have fulfilled our ethical responsibilities in accordance with the provisions of the act. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
Qualified opinion.
Emphasis on Matter
1. Special attention brought to the fact that the accounting record ERP System related to Sonepat and
Malanpur units were incomplete due to sealing by municipal committee of Sonepat and server problem
of Malanpur unit and management decided to shift all accounting from ERP to Tally software for the
year under reporting. We have relied upon the judgement of management for shifting of accounting
software from ERP to tally for sonepat and Malanpur unit for the FY 2023-24.
2. The Company has revalued its Land at Sonipat and Sahibabad Plants on 31st March 2024 to Rs. 204.50
Crores and 208.60 crores respectively from its original value of Rs. 25775620/- and Rs.7286196/-
respectively as per valuation report of Approved Valuer.
Our opinion is not modified in respect of this matter 1 and 2 .
Key Audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the matters described below are key audit matters
to be communicated in our report.
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KEY AUDIT MATTERS
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HOW OUR AUDIT ADDRESSED THE KEY AUDIT
MATTERS
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Refer Note 9.1 , read with point no. 3 of Basis of
Qualified opinion ,the valuation of stock in trade is
taken at cost as certified by the management.
Considering the significant judgement involved
, increased complexities due to closed down of
operations of Plant, uncertainty and materiality of the
amount involved, we have identified valuation of Stock
at cost as Key Audit Matter for current year Audit.
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Principal Audit Procedures performed:
- Obtained complete list of quantitative Stock
items and its current status of valuation.
- We held discussions with key personnel to
identify itemized stock which were valued at
cost and its justification.
- Verified related disclosures , its
appropriateness of judgement.
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Refer Note 11, read with point no. 4 of Basis of Qualified
opinion, the unsecured trade receivable exceeding 6
months amounting to Rs.2,66,99,250/- considered
as good have not been realized as on the date of the
report, however no provision has been created on the
same.
The Company has created a provision for doubtful
Trade Receivables amounting Rs. 15,49,04.468/-
during the year.
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Principal Audit Procedures performed:
- Understanding the trade receivables process
with regard to valuation and testing of
controls designed and implemented by the
management.
- Testing the accuracy of aging of trade
receivables at year end on sample basis.
- Obtained a list of outstanding receivables
and discussed plan of recovery with the
management.
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The Company has PAN India Dealer net work with
defined credit period for Trade receivables which has
now long outstanding receivable amount for which
appropriate loss allowance is required to be created
for expected credit losses using simplified approach
in accordance with the requirement of Ind AS 109
measuring the Loss allowance equal to credit losses.
Only Sahibabad unit has Circularized balance
confirmation directly to the address of the Statutory
Auditors. No parties has responded even their balances
were not reconciled.
Considering the significant judgement involved
, increased complexities due to closed down of
operations of Plant, uncertainty and materiality of the
amount involved, we have identified realization of the
Trade Receivables as Key Audit Matter for current year
Audit.
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- Circularized balance confirmation directly
to the address of the Statutory Auditors and
discussed any variation if any.
- Tested subsequent settlement of trade
receivable after the Balance Sheet date on a
sample basis.
- Verified the related disclosures made in notes
to financial statements in accordance with
IND AS 115 and IND AS 109.
- The Company has not followed IND-AS 109 for
impairment loss of Trade Receivables
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Refer Note 23.1 read with point no. 5 of Basis of
Qualified opinion on Litigations, claims and Contingent
Liabilities regarding interest liability totaling Rs.
5,15,57,933 on cases pending at MSME and district
courts amounting Rs. 3,93,45,237 and Rs. 1,22,12,696
respectively.
Considering the significant judgement involved
, increased complexities due to closed down of
operations of Plant, uncertainty and materiality of
the amount involved, we have identified Litigations ,
claims and Contingent Liabilities as Key Audit Matter
for current year Audit.
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Principal Audit Procedures performed:
- Understanding the process, evaluated the
design and implementation with regard
to recording of provisioning, claims and
contingent Liabilities.
- For those matters where Management
concluded that no provision should be
recorded, we also considered the adequacy
and completeness of disclosures made in
relation to contingent liabilities.
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Refer Note 25 read with point 7 of Annexure A of the
report, of Basis of Qualified opinion the Company has
significantly defaulted in payment of statutory dues as
on the Balance Sheet date and as on the date of the
report amounting to Rs. 66,05,201/- which included
EPF of Rs. 25,65,227/-, ESI of Rs. 28,89,818/-, TDS of
Rs. 1,16,894/-, and GST of Rs. 10,33,262/- .
Considering the significant judgement involved
, increased complexities due to closed down of
operations of Plant, uncertainty and
materiality of the amount involved, we have identified
defaulted in payment of statutory dues as Key Audit
Matter for current year Audit.
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Principal Audit Procedures performed:
- Understanding the process, evaluated the
design and implementation with regard to
recording of payment of statutory dues.
- The statutory dues regarding PF, ESI, Gratuity,
GST, TDS were outstanding as on Balance
Sheet date and as on the signing date.
- The management is of view that the statutory
dues shall be paid on preferential basis.
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Other Information
The Company's management and Board of Directors are responsible for the other information. The other
information comprises the information included in the Company's Annual Report, but does not include the
financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with
the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Management's Responsibilities for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the preparation and presentation of
these standalone financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter
referred to as "the Act") that give a true and fair view of the standalone financial position, standalone financial
performance, standalone cash flows and changes in equity of the Company in accordance with accounting
principles generally accepted in India including the Indian Accounting Standards specified in the Companies
(Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. The Company's Board
of Directors are also responsible for ensuring accuracy of records including financial information considered
necessary for the preparation of the standalone financial statements. The Board of Directors of the Company
are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
the selection and application of appropriate accounting policies; making judgements and estimates that are
reasonable and prudent; and the design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the management and Board of Directors of the Company
are responsible for assessing the ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management either intends
to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors of the Company is also responsible for overseeing the financial reporting process of
the Company.
Auditors' Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but not a guarantee
that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design 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 has adequate internal financial control
systems in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report
to the related disclosures in the standalone 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's report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements,
inducing the disclosures, and whether the standalone financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the standalone financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
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 give in "Annexure A" statement on the matters specified
in paragraphs 3 and 4 of the Order, to the extent applicable
A. As required by Section 143 (3) of the Act, we report, to the extent applicable, that:
(a) We have sought and obtained all the information and explanations which to the best of 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 the Company so
far as it appears from our examination of those books. Refer Para 3 of Emphasis of matter stated
above, however our opinion is not modified in this regard.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), Cash
Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement
with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the IND AS specified
under Section 133 of the Act read with companies (Indian Accounting Standard) Rules 2015 as
amended except for the matters described in Basis for Qualified opinion paragraph.
(e) The matters described in Basis of Qualified opinion and Emphasis of matter paragraph, in our
opinion may have adverse effect on the functioning, stability of the Company and which may lead
to change of controlling management.
(f) On the basis of the written representations received from the Directors as on 31st March, 2024
taken on record by the Board of Directors, none of the Directors disqualified as on 31st March
2024, from being appointed as a Director in terms of Section 164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controls with reference to financial statements
of the Company and the operating effectiveness of such controls, refer to our separate Report in
"Annexure B".
B. With respect to the other matters 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 and
according to the explanations given to us:
i. The Company, as explained by the management, has legal cases in MSMEs, NCLT and various District
courts to tune of Rs. 33,30,88,846/- which includes Rs.21,85,84,3750, NIL and Rs. 11,45,04,096
respectively as recovery claims by vendors and interest liability is likely to incur but is not provided
for in books of accounts however appropriate disclosures have been provided.
Further, according to the explanation and information given to us, there are Outstanding Income
tax pending with relevant tax department on account of disputes which are as follows:
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NAME OF
STATUE
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NATURE OF
LIABILITY
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AMOUNT (Rs.)
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PERIOD
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FORUM WHERE DISPUTE IS
PENDING
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Income tax Act,
1961
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Income tax
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9,75,130/-
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AY 2012-13
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Commissioner of income
tax appeals
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Income tax Act,
1961
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Addition to income
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1,96,23,551/-
(Income tax is NIL)
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AY 2017-18
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Commissioner of income
tax appeals
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Income tax Act,
1961
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Addition to income
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7,85,37,810/-
(Income tax is NIL)
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AY 2013-14
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Commissioner of income
tax appeals
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ii. The Company did not have any long-term contracts including derivatives for which there were any
material foreseeable losses.
iii. There were no amount which were required to be transferred to the Investor Education and
Protection Fund by the Company.
iv. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account
using accounting software which has a feature of recording audit trail (edit log) facility is applicable
to the Company with effect from April 1, 2023. Based on our examination, which included test
checks, the Company, have used an accounting software for maintaining its books of account which
has a feature of recording audit trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the software. Further, during the course of our audit,
we did not come across any instance of audit trail feature being tampered with.
C. With respect to the matter to be included in the Auditor's report under Section 197(16)
In our opinion and according to the information and explanation given to us, the remuneration paid
during the current year by the Company to its Directors during the current year is in accordance with
the provisions of Section 197 of the Act. The remuneration paid to any Director Company and it is not
in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not
prescribed other details under Section 197(16) which are required to be commented upon by us.
For Dinesh Nangru and Co
Chartered Accountants
Firm Registration No: 015003N
CA Dinesh Nangru
Partner
Membership No: 094779
UDIN:24094779BKEQSL4783
Place: Delhi
Date: 29-05-2024
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