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Atcom Technologies Ltd.

BSE: 527007 Sector: Engineering
NSE: ATCOM ISIN Code: INE834A01014
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Atcom Technologies Ltd. (ATCOM) - Auditors Report

Company auditors report

To the Members of Atcom Technologies Limited Report on the Standalone FinancialStatements Qualified Opinion

We have audited the standalone financial statements of ATCOM TECHNOLOGIES LIMITED("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss Statement of changes in Equity and Statement of Cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except as stated in the Basis of Qualified opinion paragraph below theaforesaid standalone financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2020 its loss changes in equity and its cash flows for the year ended on thatdate.

Basis for Qualified Opinion

1. All term loans & working capital facilities availed by the Company from variousbanks & financial institutions were classified as Non Performing Assets (NPAs) inearlier financial years. The Company has not made any provision for interest on theseloans over the years since no communication was received from the lenders regarding theamount of interest provision as the same were classified as NPAs.

2. The Company has accumulated losses and its net-worth has been substantially eroded.The Company is currently under liquidation in the High Court. Further the Company has alsofiled a scheme of rearrangement & compromise with the NCLT. These conditions statethat a material uncertainty exists that may cast significant doubt on the entity's abilityto continue as a going concern.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.The matters described under the Basis for Qualified Opinion section were determined to bekey audit matters to be communicated in our audit report. Information Other than theFinancial

Statements and Auditor's Report There on The Company's Board of Directors isresponsible for the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexures toBoard's Report Business

Responsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financial control relevant to the audit in order todesign 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 hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the 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 significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone 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 ourauditor's 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. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 auditor's 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.

Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) ofthe Act we report that: a. We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany in 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act read with relevantrules issued thereunder.

e. On the basis of the written representations received from the directors as on 31stMarch 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate

Report in "Annexure A"

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer Notes to the standalone IndAS financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2020.

2. With respect to the matter to be included in the Auditor's Report under section197(16) of the Act: In our opinion and according to the information and explanations givento us the the Company has not paid any remuneration to its directors during the currentyear. Therefore comment on whether the remuneration paid to any director is in excess ofthe limit laid down under said section of the Act has not been given.

3. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Gada Chheda & Co. LLP

Chartered Accountants Ronak Gada

Designated Partner Membership No. 146825

Firm's Registration

No. W100059

Place of Signature: Mumbai

Date: 31-07-2020

UDIN : 20146825AAAAEL9000

Annexure - A to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") referred to in paragraph 2 (f) onReport on Other Legal and Regulatory Requirements of our report.

We have audited the internal financial controls over financial reporting of AtcomTechnologies Limited ("the Company") as of 31st March 2020 inconjunction with our audit of the 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 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 Reporting issued by the Institute of Chartered Accountants of India(‘ICAI').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

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 materialrespects.

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 controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to 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 process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control 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 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 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 are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Disclaimer of Opinion

According to the information and explanation given to us the Company has notestablished its internal financial controls over financial reporting on criteria based onor considering the essential components of internal control stated in the

Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India.

Because of this reason we are unable to obtain sufficient appropriate audit evidenceto provide a basis for my / our opinion whether the Company had adequate internalfinancial controls over financial reporting and whether such internal financial controlswere operating effectively as at 31st March 2020.

For Gada Chheda & Co. LLP Chartered Accountants Ronak Gada Designated PartnerMembership No. 146825

Firm's Registration No. W100059 Place of Signature: Mumbai Date: 31-07-2020 UDIN :20146825AAAAEL9000

Annexure B to the Auditors' Report

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the Standalone IND-AS financial statements for the year ended 31st March2020 we report that:

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) A substantial portion of these fixed assets have been physically verified by themanagement at reasonable intervals and no material discrepancies were noticed on suchverification.

(c) The title deeds of immovable properties of the Company were mortgaged with Banks& the financial institutions. The confirmations for holding of the Title deeds fromthe banks & financial institutions were not made available to us.

(ii) As explained to us the inventories have been physically verified during the yearby the management at reasonable intervals. The Company is maintaining proper records ofinventory and no material discrepancies were noticed on physical verification.

(iii) As per the information & explanations given to us and based on ourexamination of the books of accounts during the year under audit the Company has notgranted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Therefore comments under clause (a) (b) & (c) are not given.

(iv) In our opinion & according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of loans given investments made guarantees and security given by theCompany.

(v) In our opinion & according to the information & explanation given to usthe Company has not accepted any deposits during the year from the public in terms ofSection 73 of the Companies Act 2013.

(vi) According to the information & explanation given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of section 148 ofthe Companies Act 2013.

(vii) (a) According to the information & explanations provided to us & on thebasis of our examination of the books of accounts & other relevant records theCompany is generally not regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues to theappropriate authorities. The extent of arrears of statutory dues which have remainedoutstanding as at the last day of the financial year under audit for a period of more thansix months is given in the table below:

Name of the Statute Nature of Dues Amount ( ) Period to which amount relates Date of Payment
Central Sales Tax 1956 Central Sales Tax 310523 2005-2006 Not paid till date
Central Excis e Act 1944 Educatio n Cess 2698 2008-2012 Not paid till date
Central Excis e Act 1944 Excise Duty 238505 2005-2006 Not paid till date
Customs Act Custo m Duty 4580710 2006-2007 Not paid till date

(b) According to the information and explanations given to us details of disputedstatutory dues which have not been deposited or partially deposited are as follows:

Name of the Statute Nature of Dues Amount disputed ( in lacs) Period to which the amount relates (F.Y.) Forum where dispute is pending
Maharashtra Value added Tax Tax & Interest 165.93 2005-06 Sales Tax tribunal
Central Excis e Act 1944 Tax Interest & Penalty 316.98 1997-98 to 2002-03 The Commission of Central Excise - Daman

(ii) In our opinion and according to the information & explanation given to us andbased on our examination of the records of the Company the company has defaulted inrepayment of loans or borrowings to banks & financial institutions. Details ofdefaults are as follows:

Name of the Lender Amount of default as at the Balance sheet date Period of default Remarks
State Bank of Patiala 974.32 Lacs 0 to 182 months State Bank of Patiala has assigned all its Financial assistance to InventAssets Securitization & Reconstruction Private Limited.
SICOM Limited 464.68 Lacs 0 to 182 months The Company is under the process of settling the dues through an OTS.
IFCI Limited 3542.95 Lacs 0 to 182 months IFCI Limited has assigned all its Financial assistance to CFM Assets Reconstruction Co. Private Limited
IDBI Limited 866.63 Lacs 0 to 182 months The Company is under the process of settling the dues through an OTS.
State Bank of India 1086.55 Lacs 0 to 182 months The Company is under the process of settling the dues through an OTS.
Dena Bank 1585.13 Lacs 0 to 182 months The Company is under the process of settling the dues through an OTS.
UTI Bank 732.11 Lacs 0 to 182 months The bank has begun the process of assigning its assistance to an Asset Reconstruction Company.
Non- Convertible Debentures 507.13 Lacs 0 to 182 months The Company is under the process of settling the dues through an OTS.

(i) The Company has not raised any money by way of initial public offer or furtherpublic offer {including debt instruments) and term loans during the year.

(ii) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

(iii) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid / provided for anymanagerial remuneration during the year. Therefore comment under this clause is notgiven.

(iv) In our opinion and according to the information & explanations given to usthe Company is not a Nidhi Company and therefore the compliance requirements relevant to aNidhi Company are not applicable.

(v) In our opinion and according to the information & explanations given to us andbased on our examination of the records of the Company all transactions with relatedparties are in compliance with section 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.

(i) In our opinion and according to the information & explanation given to us andbased on our examination of the records of the Company no preferential allotment orprivate placement of shares or fully or partly convertible debentures has been made by theCompany during the year under review.

(ii) According to the information & explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him/her as specified under theprovisions of section

192 of the Companies Act 2013.

(iii) The Company is not required to be registered under section 45-1(A) of the ReserveBank of India Act 1934 and therefore the provisions of paragraph 3(xvi) of the Order isnot applicable.

For Gada Chheda & Co. LLP

Chartered Accountants

Ronak Gada

Designated Partner

Membership No. 146825

Firm's Registration

No. W100059

Place of Signature: Mumbai

Date: 31-07-2020

UDIN : 20146825AAAAEL9000