We were engaged to audit the accompanying standalone financial statements of Harig Crankshafts Limited
('the Company'), which comprise the 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.
We do not express an opinion on the accompanying financial statements of Harig Crankshafts Limited.
Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report,
we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion as to
whether these standalone financial statements give the information required by the Companies Act, 2013 ('the
Act) in the manner so required and gives a true and fair view in conformity with the Indian Accounting Standards
('Ind AS') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st
March 2024, and its profit (including other comprehensive income), its cash flows and the changes in equity for
the year ended on that date.
Basis for Disclaimer of Opinion
The NCLT, vide its order dated 31st March, 2023 (“Insolvency Commencement Date”) initiated the Corporate
Insolvency Resolution Process (“CIRP”) of the Company under the Insolvency & Bankruptcy Code, 2016
(hereinafter referred to as code). The said NCLT Order also records the appointment of Mr. Saurabh Chawla as
the Interim Resolution Professional (“IRP”) in accordance with Section 16 of the Code. The NCLT vide its Order
dated 17th April, 2024 approved the resolution plan submitted by M/s Palika Towns LLP (successful resolution
applicant) for insolvency resolution of Harig Crankshafts Limited. In line with the said order of NCLT and as per
the terms of resolution plan the new board of directors has been constituted on 17th May 2024 by the successful
resolution applicant.
As explained to us, the company was not in operation since the beginning of FY 2011-2012 and the company
was not having any employee on its payroll who can take care the financial records of the company. As
explained to us, the newly constituted board of directors of the company have made all practical and reasonable
efforts to gather details to prepare these financial statements, despite various challenges and complex
circumstances. It has been further explained that the accompanying financial statements have been prepared by
the accounting professionals engaged by the newly constituted board of the company. The financial statement
for the FY 2023-24, have been prepared on the basis of the trial balance for the period ended March 31, 2024
which is on the basis of the carrying balance of assets and liabilities of the company as at March 31, 2023 and
further changes made in it in accordance with CIRP separate bank account maintained by the IRP during the
year.
Prior to the commencement of CIRP, the Board of Directors, whose executive powers were subsequently
suspended during the CIRP, had oversight on the management of the affairs of the Company together with the
KMPs. Thus, the new board does not assure accuracy and reliability of the opening balances as at 1st April
2023. The primary purpose of preparing the financial statements is for the compliance with the provisions of the
Companies Act, 2013, the rules and regulations framed thereunder (“Act”).
In view of above, we draw attention to:
a. The company has not filed Income Tax Return from Assessment Year 2012-13 onwards. Further,
the company has not deducted TDS (Tax Deductible at Source) required to be deducted on various
payment to consultants made by the company during the current financial year in relation to CIRP
which was substantially reimbursed by the Financial creditors, as required by section 194J of the
Income Tax Act, 1961. Thus, we are unable to obtain sufficient appropriate audit evidence regarding
the company's compliance with tax regulations, and any related financial impacts thereof on the
financial statements.
b. The company has not filed its quarterly financial results with the stock exchanges for the current
financial year as well as for previous financial years as required under regulation 33 of SEBI
(Listing Obligation and Disclosure Requirements) Regulations, 2015. Further, we are unable to
obtain sufficient appropriate audit evidence regarding the financial impact on account of non¬
compliance with the relevant rules and regulations of Securities and Exchange Board of India
(SEBI) and Bombay Stock Exchange (BSE).
c. The company has not filed Annual Financial Statements for previous years with registrar of
companies. Further, we are unable to obtain sufficient appropriate audit evidence regarding the
financial impact on account of non-compliance with the other relevant corporate laws.
d. The reconstituted Board of Directors of the company has appointed Statutory Auditors for the
FY2011-12 to FY2025-26 in its Board meeting held on 15th Oct 2024. However, the said
appointment is yet to be approved by shareholders in the Annual General Meeting (AGM) of the
Company as the AGM was not convened up to the date of signing of the financial statements.
e. We have not been provided sufficient information and proofs regarding the existence and valuation
of Plant, Property and Equipment's (PPE) as disclosed in note 3 of the accompanying financial
statements amounting to Rs. 3161934.72 Hundreds as on 31st March 2024 except for the leasehold
land having carrying value of Rs. 24735.26 Hundreds as on 31st March 2024. Further, we have
been unable to perform alternate audit procedures to obtain sufficient appropriate audit evidence.
f. Also, the company has not made the assessment for impairment of assets as required by Ind AS 36
“Impairment of Assets”.
g. We have not been provided Property, Plant & Equipment register showing item wise details of
assets, its location, quantities, cost of acquisition, date of acquisition, useful life, depreciation rate
etc. The company has computed depreciation on the existing rate of depreciation on the WDV of
the full block taken together the individual assets in the Block. Hence, we are unable to comment
on the same.
h. We are unable to satisfy ourselves by performing alternative procedures regarding the inventory
quantities held and valuation as at 31st march 2024, as per SA 501 'Audit Evidence - Specific
Consideration for Selected items'. Therefore, we are unable to conclude whether inventories of Rs.
76430.55 Hundreds as disclosed in note 5 of the accompanying financial statements as on 31st
March, 2024 exists.
i. As referred to in note 9 of the accompanying financial statements, We have not been provided with
the bank statements for bank accounts maintained by the Company having a carrying amount of
Rs. 13134.84 Hundreds as disclosed in the accompanying financial statements as on 31st March,
2024. Further, regarding the balance of Rs. 49.14 Hundreds held in the bank account maintained
with Central bank of India, the reconstituted Board of Directors of the company is not the authorized
signatory.
j. As referred to in note 9 of the accompanying financial statements, the company has disclosed cash
balance of Rs. 31096.39 Hundreds. However, the reconstituted board has stated that, based on
their review, no such cash balance is in existence. The amount has been carried forward solely due
to its appearance in the preceding year's financial statements, without substantiating evidence for
the current year. The same will be written-off in the the succeeding financial years. Hence, we are
unable to express any opinion regarding the same.
k. We have been unable to obtain confirmations from suppliers as regarding the balances outstanding
in respect of Advances given to them amounting to Rs. 10641.29 Hundreds as disclosed in note 5
of the accompanying financial statements as on 31st March, 2024.
l. With regards to the amount deposited with statutory authorities amounting to Rs. 71581.56
Hundreds in aggregate as disclosed in note 5 of the accompanying financial statements as on 31st
March, 2024, no satisfactory evidence has been provided to us.
m. With regards to the other deposits and advances as disclosed in the accompanying financial
statements amounting to Rs. 78967.20 Hundreds as disclosed in note 5 of the accompanying
financial statements as on 31st March, 2024, no explanation and satisfactory audit evidence have
been provided to us.
n. The Company does not have details regarding balances of related parties and transactions
between related parties. Due to the unavailability of required details, we are unable to ascertain the
compliance with Ind AS 24 and other disclosure requirements of Schedule III of the Companies Act,
2013 ('the Act').
o. The company has not complied with the relevant reporting requirements of schedule III of the
Companies Act, 2013 and various Indian Accounting Standards (Ind AS). For example, the
company has not provided the disclosure regarding the default made by the company in repayment
of loan and payment of interest thereon, relevant disclosures as require by Ind AS 10 “Employee
Benefits”, Ind AS 24 “Related Party Disclosures”, etc.
p. We have not been provided loan statement and other supporting documents with regards to the
Borrowings taken by the company amounting to Rs. 4318376.15 Hundreds in aggregate as
disclosed in the note 17 of the accompanying financial statements as on 31st March, 2024. Further,
no interest has been provided for in the Books of accounts on these loans. Also, We are unable to
perform further alternate audit procedures to obtain sufficient and appropriate audit evidence.
q. The details with respect to Trade payables amounting to Rs. 451239.54 Hundreds, Security
deposits - Distributions amounting to Rs. 12611.58 Hundreds and other non-current liabilities
amounting to Rs. 345471.48 Hundreds as appearing in the Note No. 14 of the financial statements
are not available with the company. Hence, we are unable to comment on the same as no evidence
are available with the company.
r. As regards to the Provisions for gratuity and Leave Encashments amounting to Rs. 87371.18
Hundreds in aggregate, referred in note 15 of the accompanying financial statements, the balances
are brought forwarded from preceding year. The company is not in operation since many years and
details of employees are not available. Relevant claims for the said amount are not expected to be
lodged against the company. Hence, we are not able to comment on the same.
s. Classification of assets and liabilities as current or noncurrent as per the Company's normal
operating cycle and other criteria set out in the Schedule III to the Act has not been done. All
assets and liabilities have been carried on in the financial statement as they were appearing in the
financial statement of the preceding year.
Information other than the Financial Statements and Auditor’s Report thereon
The Company's Board of Directors are responsible for the other information. The other information comprises the
information included in the Annual Report, but does not include the standalone financial statements and our
auditor's report thereon. The Annual Report is expected to be made available to us after the date of this auditor's
report.
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 identified above when it becomes available 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.
When we read the Annual Report, if we concluded that there is a materially misstatement therein, we are
required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the
Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that gives a true
and fair view of the financial position including other comprehensive income, cash flows and changes in equity of
the Company in accordance with the accounting principles generally accepted in India, including the Indian
Accounting Standards (Ind As) prescribed under section 133 of the Act.
This responsibility also includes 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; selection and application of appropriate accounting policies; making judgements and estimates that
are reasonable and prudent; and 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 of the standalone Ind AS financial statements that gives a true and fair view and are
free from material misstatements, whether due to fraud or error.
The Company's Board of Directors is also responsible for assessing the company's ability to continue as a going
concern and whether the use of the going concern basis of accounting is appropriate as well as disclosing, if
applicable, matters relating to going concern.
Auditor’s responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the standalone financial statements in accordance with the Standards
on Auditing and to issue an auditor's report thereon.
However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we were
not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these
Standalone Financial Statements.
We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act and the Rules made thereunder and we have
fulfilled our ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020 (“the Order”) issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act, we give in the annexure a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
As required by Section 143(3) of the Act, we report that:
a. As described in the Basis for Disclaimer of Opinion paragraph, we sought but were unable to obtain all
the information and explanations which to the best of our knowledge and belief were necessary for the
purpose of our audit.
b. The Company has maintained books of account however, due to conditions and the possible effects of
the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether
proper books of account (i.e. correctness/completeness etc. of the books) as required by law have been
kept by the company.
c. Due to conditions and the possible effects of the matter described in the Basis for Disclaimer of Opinion
paragraph, We are unable to state whether the Balance Sheet, Statement of Profit and Loss, Statement
of change in equity and Cash Flow Statement dealt with by this report are in agreement with the books
of account;
d. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we
are unable to state whether the aforesaid Ind AS financial statements comply with the Accounting
Standards under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2014 as amended.
e. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we
are unable to state whether any of the directors is disqualified as on 31st March, 2024 from Being
appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the Internal Financial Control with reference to Financial Statements of
the Company and the operating effectiveness of such controls, refer to our separate Report in
“Annexure B”.
g. With respect to the matter to be included in the Auditor's Report under section 197(16), due to the
possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable
to state whether any remuneration has been paid by the Company to its directors during the current
year.
h. With respect to the other matters to be included in the Auditor's Report in accordance with the 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) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion
paragraph, we are unable to state whether the Company has no pending litigations which
would impact its financial position.
ii) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion
paragraph, we are unable to state whether the Company did not have material foreseeable
losses on long term contracts including derivative contracts.
iii) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion
paragraph, we are unable to state whether there are any amounts required to be transferred to
the Investors Education and Protection fund.
iv) a) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion
paragraph, we are unable to state whether, any funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”)
or provide any guarantee, security or the like on behalf of the Ultimate beneficiaries;
b) ) Due to the possible effects of the matters described in the Basis for Disclaimer of
Opinion paragraph, we are unable to state whether, any funds have been received by the
company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with
the understanding, whether in writing or otherwise, that the company shall, whether, directly or
indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries; and
c) Due to the possible effects of the matter described in the Basis of Disclaimer of Opinion
paragraph, we are unable to state that the representations under sub-clause (i) and (ii) of rule
11(e), as provided under (a) and (b), contain any material misstatement or not.
v) No dividend has been declared and paid during the year by the company.
vi) Based on our examination which included test checks and information given to us, the
Company has used accounting softwares for maintaining its books of account, which did not
have a feature of recording audit trail (edit log) facility throughout the year for all relevant
transactions recorded in the respective softwares, hence we are unable to comment on audit
trail feature of the said software.
For M B Gupta & co.
Chartered Accountants
Firm Reg. No: 006928N
Sd/-
Mahesh Baboo Gupta
Partner
Membership No: 085469
Place:Noida
Date: 06-12-2024
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