To the Members of Aksh Optifibre Limited
Report on the Audit of the Standalone Financial Statements Qualified Opinion
We have audited the accompanying standalone financial statements of Aksh OptifibreLimited (the Company') which comprise the Balance Sheet as at 31 March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and
Statement of Cash Flow for the year then ended and a summary of the significantaccounting 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 explanationsgiven to us except for possible effects of the matters described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 (the Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS')specified under Section 133 of the Act of the state of affairs of the Company as at 31March 2021 its profit for the year ended on that income)changesin equity and its cashflows date.
Basis for Qualified Opinion a) We draw your attention to note 50 to the standalonefinancial statement which states the Subsidiary Company namely AOL Technologies FZEDubai has Capital work in progress as on 31st March 2021 amounting to Rs. 9294.38 lakhsin respect of Optical Fibre Manufacturing Plant. Presently the project has been suspendeddue to paucity of funds and no impairment testing has been carried out by the SubsidiaryCompany. In the absence of assessment of impairment we are unable to comment on therecoverable amount with regard to said investment. b) We draw your attention to note 51 tothe standalone financial statement which states the Subsidiary Company namely AOL FZEDubai has been incurring losses from last few years resulting in erosion of net worth.The Company is also in default with the Banks towards repayment of its borrowingobligation. Presently operations of subsidiary are suspended due to various reasonshowever all value in financial statement have been taken at cost and impairment testinghas not been carried out by the management. In the absence of assessment of impairment weare unable to comment on the recoverable amount with regard to said investment.
We are unable to ascertain the Impact of the above qualifications on the standalonefinancial statement.
We conducted our audit of the standalone financial statement in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Our responsibilitiesunder those standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI') together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of the
Companies Act 2013 and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Emphasis of Matter
We draw your attention to the Notes to the standalone financial statements;
a) Note 37(d) which explains the uncertainties and the management's assessment of thefinancial impact related to COVID-19 pandemic situation for which a definitive assessmentof the impact in subsequent period is highly dependent on future economic developments andcircumstances as they evolve?
b) Note 45 regarding balance confirmations of Receivable / Payables
/ Advances paid / Advances received. The Company has sent e-mail to parties withrequest to confirm their balances out of which only few have responded. Pending receipt ofsuch confirmations the balances have been considered as per books and the management doesnot forsee any impact arising on account of it.
c) Note 46 regarding that the Company has foreign currency payable aggregating to Rs2553.61 lakhs and Rs 354.18 lakhs which are outstanding for more than six months(extended to twelve months) and three years respectively as of March 312021. The Companyalso has foreign currency receivable balances aggregating to Rs 3722.39 lakhs which areoutstanding for more than nine months
(extended to fifteen months) as of March 312021. As on the date of signing offinancial statement the Company is in the process of applying for necessary extension inconsultation with RBI consultant. Management does not expect any material implication onaccount of delays under the existing regulations.
d) Note 47 regarding Invocation of Stand by Letter of Credit (SBLC) of USD 44.57 lakhs(equivalent to Rs. 3271.44 Lakhs) given by the Company's banker namely Union Bank ofIndia (Indian Bank) for the company's wholly owned subsidiary namely AOL
Technologies FZE Dubai due to which the Investment in non-cumulative optionallyconvertible preference share stands increased by the said amount.
e) Note 48 regarding all secured lenders have classified bank account of the Companywith them as Non-Performing Assets
(NPA) as per prescribed norms issued by Reserve Bank of India (RBI) although provisionof interest in respect of such borrowings has been properly accounted for in books ofaccounts.
Our opinion is not modified in respect of point no (a) & (e) mentioned above.
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. In addition to the matter described in the Basis forQualified Opinion we have determined below to be the Key audit matters to be communicatedin our report.
|S.No. Key Audit Matter ||Auditor's Response |
|1. Assessing Impairment of the carrying value of Trade receivable and loan receivable from subsidiary companies ||Our audit procedures included the following: |
|(Refer Note No 52 of the accompanying standalone financial statement) ||(i)(i) Obtained an understanding of management's process and evaluated design and tested operating effectiveness of controls around identification and determining the provision for Impairment of receivable. |
|As on 31st March 2021 The Company has exposure in Trade receivable and loan receivable (Including Interest) amounting to Rs 3687.60 lakhs & 2801.23 lakhs respectively in subsidiary companies. As on 31st March 2021 net worth of subsidiary companies is Negative. ||(ii) Obtained trade receivable external confirmation and testing the subsequent payment received. |
|As above mentioned Trade Receivables and loan receivable are significant to the Company's standalone financial statements. The Collectability of receivables is a key element of the company's working capital management which is managed on an ongoing basis by its management. Further Company has also applied to RBI for extension of period for realisation of unrealised export proceeds from foreign subsidiaries within the prescribed time and the same is currently under process. ||(iii) Assessed the competence objectivity and capabilities of the management staff for the purpose of this assessment. |
|Given the magnitude and inherent uncertainty involved in the judgement involved in estimating impairment assessment of receivables we have identified this as a key audit matter ||Furthermore we assessed the adequacy and appropriateness of the disclosures in the standalone financial statements. |
|2. Trade Receivables from a Central Government Entity ||Our procedures included but were not limited to the following: |
|The Company has outstanding trade receivables of Rs. 2723.69 lakhs from a Public Sector Entity owned by the Government of India in the telecommunications sector. The Company has taken necessary steps for the recovery of the amount due. ||Evaluated various correspondences made by the Company with the Central Government Entity and other follow up actions taken by the Company including but not limited to legal process meetings notices etc. |
|Considering that the amount is due from a Central Government Entity and based on experience of realisation and steps taken by the Company for recovery it is confident of recovering the balance amount in due course however part of outstanding receivables received in April 2021. ||Evaluated the underlying documents against which these amounts are accrued as per eligibility criteria. |
|The management of the Company has assessed that a provision for impairment is not required as the amount recoverable from the Central Government Entity. ||Obtained representation from the management regarding recoverability of these amounts. |
|This matter has been considered as a key audit matter considering the significant outstanding tradereceivable ||As a result of the above audit procedures the management's assessment of impairment in the amount recoverable from the Central Government Entity was considered as appropriate. |
|3. Assessment of Impairment testing of Ophthalmic Lens Plant in line with Ind AS 36 (Impairment of Assets) ||Our procedures included but were not limited to the following: |
|(Refer Note No 53 of the accompanying standalone financial statement) ||We have obtained an understanding of management process with regard to identifying existence and testing the Impairment in the value of Property Plant and equipment and Intangible Assets. |
|Company has started lens plant in financial year 2017-18 for production of lens but the Company has not achieved desired production capacity due to technical constraint and pandemic of COVID-19 situation in current year as well as in previous year resulting fixed low contribution hence cash loss incurred in lens plant in current year as well as in previous years. As on 31st March 2021 WDV (including capital work in progress) of Ophthalmic Lens Plant is Rs 3559.39 lakhs. ||We have reviewed the Company's costincreasewith impairment assessment process including technical assessment of the management key assumptions and judgement used to determine the impairment and future cash flows discount rates applied etc. |
|The management also assesses whether an impairment indication exists and performs impairment test in respect of Property Plant & Equipment's and Intangible Assets wherever such indications exist which involve management's judgment of various factors including future growth rate etc. ||Obtained representation from the management regarding non-recognition of Impairment. |
|The management of the Company has assessed that a provision for impairment is not required in respect of the Property Plant and Equipment and Intangible Assets of lens plant as cash loss incurred due to low demand in market considering COVID 19 pandemic situation hence desired production capacity not achieved so based on calculated projection recoverable amount determined is higher than the book value. ||As a result of the above audit procedures the management's assessment of impairment was considered as appropriate |
|This matter has been considered as a key audit matter considering the significance of WDV value of Property Plant and Equipment and Intangible Assets to the standalone financial statements. || |
|4. Litigations Contingencies ||In view of the significance of the matter our procedures included but were not limited to the following: |
|As described in Note 54 to the standalone financial statements SEBI vide its Order dated 28 February 2020 levied penalty of Rs. 1000 lakhs u/s 15HA and Rs. 15 lakhs u/s 23E of Securities Contracts Regulation Act (SCRA) 1956 for alleged irregularities in the issuance of GDRs allotted by the Company in the year 2010. ||(i)(i) Assessing the appropriateness of the design and implementation of the Company's controls over the assessment of litigations. Necessary meetings are conducted with in-house legal counsel and/or legal team. |
|appeal in Securities Appellate Tribunal (SAT) TheCompanyhasfilled against such order which is pending for disposal. ||(ii) Discussions with management in respect of appeal filled by Company with Hon'ble Securities Appellate Tribunal against this order. |
|This matter has been considered as a key audit matter considering that The Company has ongoing litigation with relevant authorities which could have a significant impact on the financial statement of the Company if the potential exposure were to materialise. The amounts involved are significant and the application of Indian Accounting Standards to determine the amount if any to be provided as a liability or disclosed as a contingent liability is inherently subjective. ||(iii) We assessed the value of provision / contingent liability in light of position taken by the company nature of exposure applicable regulations and related correspondence with the authorities. |
| ||As a result of the above audit procedures the management's assessment of provision for contingencies was considered to be appropriate. |
Information other than the Standalone Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe standalone financial statements and our auditor's report thereon. The annual report isexpected 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 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
Management's Responsibility for the Standalone Financial Statements
The Company's management and Board of Directors is 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 (financial position)profit or loss (financial performance including other comprehensive income) changes inequity and cashflowsof the Company in accordance with accounting principles generallyaccepted in India including the Indian
Accounting Standards (Ind AS) . This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone 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. The Board of
Directors are also responsible for overseeing the Company's financial reportingprocess.
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 Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: i. Identifyand assess the risks of material misstatement of the standalone financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control. ii. Obtainan understanding of internal financial control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. iii. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
iv. 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's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern. v. Evaluate the overallpresentation structure and content of the standalone financial statements including thedisclosures and whether the standalone financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the standalone financial statements.
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 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 197(16) of the Act we report that the
Company has not paid remuneration to its director during the year hence provisions andlimits laid down under Section 197 read with Schedule V to the Act are not applicable.
2) 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 givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
3) Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that: a) We have sought and except for the matter described in the basis forQualified Opinion paragraph obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit. b) Exceptfor the possible effects of the matter described in the Basis of Qualified Opinion sectionabove 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 Sheetthe Statement of Profit and Loss including Other Comprehensive Income Statement of
Changes in Equity and the Statement of Cash Flow dealt with by this Report are inagreement with the relevant books of account. d) Except for the effects of matterdescribed in point (a) & (b) of Basis for Qualified Opinion section above in ouropinion the aforesaid standalone financial statements comply with the Indian accountingstandards (Ind AS) specified under
Section 133 of the Act. e) On the basis of the written representations received fromthe directors as on March 31 2021 taken on record by the
Board of Directors none of the directors is disqualified as on March 31 2021 frombeing appointed as a director in terms of Section 164 (2) of the Act. f) With respect tothe adequacy of the internal financial controls of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe company's internal financial controls over financial reporting. g) with respect to theother matters to be included in the
Auditor's Report in accordance with rule 11 of the Companies
(Audit and Auditors) Rules 2014 (as amended) in our opinion and to the best of ourinformation and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in the standalone financial statements- Refer note no 39 of the standalonefinancial statement; (ii) The Company did not have any long-term contracts includingderivative contracts for 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 31 March2021;
"Annexure A" to the Independent Auditor's Report
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the Member of Aksh Optifibre Limited of even date)Based on the audit procedures performed for the purpose of reporting a true and fair viewon the standalone financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(b) According to the information and explanation given to us fixed assets except theassets installed at customer premises have been physically verified by the managementduring the year. No material discrepancies were noticed on such verification. In ouropinion frequency of physical verification of fixed assets is reasonable. The fixedassets have been physically verified by the management during the year. No materialdiscrepancies were noticed on such verification.
(c) According to the Information and explanation given to us and on the basis ofexamination of books of account and other documents the title deeds of immovableproperties owned by the Company are held in the name of the Company. In respect ofimmovable properties in the nature of buildings that have been taken on leaseanddisclosedunderright-of-useassets financialstatement thestandalone the leaseagreements are in the name of Company where the Company is the lessee as per the leaseagreement.
ii. According to the information & explanation given to us physical verificationof inventory has been conducted at reasonable intervals by the management during the yearexcept for goods in transit. The discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly dealt within the book of accounts.
iii. According to the information and explanation given to us the Company had grantedunsecured loan to companies covered in the register maintained under Section 189 ofCompanies Act 2013.
(a) In our opinion the rate of interest and other terms and conditions on which theloan has been granted to companies covered in the register maintained under Section 189of the Act were not prima facie prejudicial to the interests of the Company.
(b) In respect of loans granted to companies covered under section 189 of the Act theterms of arrangement for payment of principal and interest are not due. Accordingly theprovisions of paragraph 3 (iii) (b) of the Order are not applicable to the Company.
(c) In respect of the aforesaid loan as per the information made available to usthere is no overdue amount as at year end.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 of the Companies Act 2013 withrespect to the loan guarantee and investments made (to the extent applicable).
v. According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of section 73 to 76 of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules2014 (as amended). Accordingly theprovision of clause 3(v) of the Order is not applicable.
vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under sub section (1) of section 148 of theCompanies 2013 and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.
vii. (a) The Company is generally regular in depositing undisputed statutory duesincluding goods and service tax duty of customs and other material statutory dues asapplicable with the appropriate authorities except in case of provident fund andemployees' state insurance. According to the information and explanations given to us noundisputed amounts payable in respect of income tax Goods & Service Tax Service Taxsales tax custom duty excise duty and Cess were in arrears as at 31st March 2021 for aperiod of more than six months from the date they became payable except Service tax ofRs.6.06 lakhs and Income Tax of Rs 109.66 lakhs.
(b) According to the information and explanations given to us there are no dues ofincome tax Goods & Service Tax service tax duty of customs duty of excise whichhave not been deposited on account of any dispute except of the following amounts: -(Income Tax Demand appearing on Portal not disputed to be discuss)
|Name of Statute ||Nature of Dues ||Disputed Amount in Lakhs ||Period to which amount relates ||Forum where disputeis pending |
|Central Excise Act 1944 ||Excise Duty ||22.35 ||2007-09 ||Asst. Commissioner Bhiwadi |
|Central Excise Act 1944 ||Excise duty ||32.79 ||2007-09 ||Asst. Commissioner Bhiwadi |
|Central Excise Act 1944 ||Excise duty ||4.02 ||2013-14 ||CESTAT Delhi |
|Finance Act 1994 ||Service Tax ||0.91 ||January 2011 to November 2011 ||Assistant Commissioner Bhiwadi |
|Income Tax Act 1961 ||Income tax ||91.01 ||A.Y 2010-11 ||CIT (Appeals) Alwar (Rajasthan) |
|Provident Fund Act ||Provident Fund ||7.60 ||2004-05 ||Hon'ble High Court Jaipur |
viii. (a) According to the information available with us The Company has outstandingdefault as on balance sheet date in repayment of dues to the banks and financialinstitution during the year. Detail as under:
|Name of Lender ||Rs. in Lakhs (Principal) ||Rs. in Lakhs (Interest) ||Period of Default -in range (Interest) |
|Punjab National Bank ||65.50 ||24.28 ||0-45 Days |
|HDFC Bank ||229.67 ||- ||91 Days and above |
|Union Bank of India ||110.00 ||31.05 ||0-45 Days |
|Union Bank of India ||126.25 ||- ||46-90 Days |
|Union Bank Stand by letter of Credit ||630.49 ||- ||0-45 Days |
(b) The Company has also defaulted in repayment of following dues to the financialinstitution and banks which were paid on or before the
Balance Sheet date:
|Name of Lender ||Rs. in Lakhs (Principal) ||Rs. in Lakhs (Interest) ||Period of Default -in range (Interest) |
|Punjab National Bank ||32.75 ||4.35 ||0-45 Days |
|HDFC Bank ||65.18 ||54.24 ||0-45 Days |
|HDFC Bank ||288.24 ||57.47 ||46-90 Days |
|HDFC Bank ||377.71 ||230.19 ||91 Days and above |
|Union Bank of India ||110.25 ||83.59 ||0-45 Days |
|Union Bank of India ||220.25 ||46.98 ||46-90 Days |
|Union Bank of India ||- ||46.92 ||91 Days and above |
|Union Bank Stand by letter of Credit ||2640.94 ||- ||0-45 Days |
ix. In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and fresh term loans during the year. Accordingly paragraph3(ix) of the Order is not applicable to the Company
x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
xi. In our opinion and according to the information and explanations given to us theCompany has not paid managerial remuneration during the year hence provisions of section197 read with Schedule V to the Act are not applicable. xii. The Company is not a NidhiCompany and hence reporting under clause 3 (xii) of the Order is not applicable to theCompany.
xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and section 188 of the Companies Act 2013 whereapplicable for all transaction with the related parties and the details of related partytransactions have been properly disclosed in the standalone financial statements asrequired by the applicable Indian accounting standards.
xiv. According to the information & explanation provided to us the Company has notmade any preferential allotment or private placement of shares or fully or partly paidconvertible debentures during the year hence reporting under clause 3 (xiv) of the Orderis not applicable to the Company.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors. Accordingly the provision of paragraph3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause (xvi) of the Order are notapplicable to the Company.
"Annexure B" to the Independent Auditor's Report
(Referred to in paragraph 3(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Member of Aksh
Optifibre Limited of even date)
Report on the Internal Financial Controls under clause (i) of Sub-section 3 of section143 of Companies Act2013
We have audited the internal financial controls over financial reporting of AkshOptifibre Limited ("the Company") as of 31 March 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management and Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting 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. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements 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 internal financial controls system overfinancial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide financial reporting and the preparation of standalone financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial financialreporting includes those policies and procedures that (1)pertain to the maintenance of controlover records that in reasonable detail accuratelyand fairly 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) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 overfinancialreporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2021 based on internal control overfinancial reporting criteria established by the Company considering internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.
| ||For B G G & Associates |
| ||Chartered Accountants |
| ||Firm Registration Number: 016874N |
|Place: New Delhi ||CA Alok Kumar Bansal |
|Date: 11-06-2021 ||Partner |
| ||Membership no.: 092854 |
| ||UDIN :21092854AAAACU7599 |