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V-Guard Industries Ltd.

BSE: 532953 Sector: Engineering
NSE: VGUARD ISIN Code: INE951I01027
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VOLUME 20211
52-Week high 274.80
52-Week low 181.90
P/E 41.51
Mkt Cap.(Rs cr) 10,626
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 245.80
CLOSE 247.15
VOLUME 20211
52-Week high 274.80
52-Week low 181.90
P/E 41.51
Mkt Cap.(Rs cr) 10,626
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

V-Guard Industries Ltd. (VGUARD) - Auditors Report

Company auditors report

To the Members of V-Guard Industries Limited

Report on the Audit of the Standalone Ind

AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of V-GuardIndustries Limited ("the Company") which comprise the Balance sheet as at March31 2022 the Statement of Profit and Loss including the Statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the standalone Ind AS 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 the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the 'Code of Ethics'issued by the

Institute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the standalone Ind AS financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2022. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matter described below to be the key audit matter to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to this matter. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matter below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matter How our audit addressed the key audit matter
Revenue from sale of products (as described in note 2.2(d) and 48 of the standalone Ind AS financial statements)
Revenue is measured at the fair value of consideration received / receivable from its customers and in determining the transaction price for the sale of products the Company considers the effects of various factors such as volume based discounts rebates and other promotion incentives schemes ('trade schemes') provided to the customers. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
• Assessed the Company's accounting policy for revenue recognition including the policy for recording trade schemes in accordance with Ind AS 115.
At year end amounts for trade schemes that have been incurred and not yet provided to the customers are estimated and accrued. We have considered this as a key audit matter on account of significant judgement and estimate involved in calculation of provision for such trade schemes as at the Balance Sheet date. • Obtained an understanding of the revenue process the assumptions used by the management in calculation of accrual of trade schemes and design and implementation of controls.
• Evaluated management's methodology and assumptions used in the calculations of such accruals for trade schemes.
• Tested on sample basis management's calculation of the provisions for trade schemes at year end with approved trade schemes and underlying sales data including testing of completeness and arithmetical accuracy of the data used.
• Tested on sample basis credit notes issued to customer / payments for incentives as per the approved trade schemes.
• Performed analytical procedures to identify any unusual trends and items.

Other Information

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 Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. 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 the 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 standalone Ind AS financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS 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 Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal 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 has adequate internal financial controlswith reference to standalone Ind AS financial statements in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 Ind AS financialstatements for the financial year ended March 31 2022 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. 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 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls with reference tothese standalone Ind AS financial statements and the operating effectiveness of suchcontrols refer

to our separate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) 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 Note 40(B)(i) to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. As detailed in Note 56 to the standalone Ind AS financial statements except for4080 equity shares required to be transferred to the Investor Education and ProtectionFund there has been no other delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company. Out of the above 800 equityshares remain pending to be transferred to the Investor Education and Protection Fund asat March 31 2022.

iv. a) The management has represented that

to the best of its knowledge and belief no funds have been advanced or loaned orinvested (either from borrowed funds or share premium or any other sources or kind offunds) by the Company to or in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

b) The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any persons or entities including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the Company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.

v. The final dividend paid by the Company during the year in respect of the samedeclared for the previous year is in accordance with section 123 of the Act to the extentit applies to payment of dividend.

As stated in note 20 to the standalone Ind AS financial statements the Board ofDirectors of the Company have proposed final dividend for the year which is subject to theapproval of the members at the ensuing Annual General Meeting. The dividend declared is inaccordance with section 123 of the Act to the extent it applies to declaration ofdividend.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W / E300004
Sd / -
per Sandeep Karnani
Partner
Place of Signature: Bengaluru Membership Number: 061207
Date: May 19 2022 UDIN:22061207AJFVSG8807

Annexure 1 referred to in clause 1 of paragraph on the ‘Report on Other Legal andRegulatory Requirements' of our report of even date

Re: V-Guard Industries Limited ("the Company")

In terms of the information and explanations sought by us and given by the Company andthe books of account and records examined by us in the normal course of audit and to thebest of our knowledge and belief we state that:

(i) (a) (A) The Company has maintained proper

records showing full particulars including quantitative details and situation ofproperty plant and equipment.

(B) The Company has maintained proper records showing full particulars of intangiblesassets.

(b) Property plant and equipment have been physically verified by the managementduring the year and no material discrepancies were identified on such verification.

(c) The title deeds of all the immovable properties (other than properties where theCompany is the lessee and the lease agreements are duly executed in favour of the lessee)are held in the name of the Company.

(d) The Company has not revalued its property plant and equipment (including right ofuse assets) or intangible assets during the year ended March 31 2022.

(e) There are no proceedings initiated or are pending against the Company for holdingany benami property under the Prohibition of Benami Property Transactions Act 1988 andrules made thereunder.

(ii) (a) The inventory has been physically verified by the management during the yearexcept for inventories lying with third parties. In our opinion the frequency ofverification by the management is reasonable and the coverage and procedure for suchverification is appropriate. Inventories lying with third parties have been confirmed bythem as at March 31 2022. Discrepancies of 10% or more in aggregate for each class ofinventory were not noticed on such physical verification and confirmation.

(b) As disclosed in Note 24 to the accompanying standalone Ind AS financial statementsthe Company has been sanctioned working capital limits in excess of ' five crores inaggregate from banks during the year on the basis of security of current assets of theCompany. Based on the records examined by us in the normal course of audit of thestandalone Ind AS financial statements the quarterly returns/statements filed by theCompany with such banks are in agreement with the books of accounts of the Company.

(iii) (a) The Company has made investments in one subsidiary during the year. TheCompany has not granted secured/ unsecured loans/advances in nature of loans or stoodguarantee or provided security to any parties. Therefore the reporting under clauses3(iii)(a) (iii)(c) (iii)(d) (iii)(e) and (iii)(f) of the Order are not applicable tothe Company.

(b) In respect of the investments the terms and conditions under which investmentswere made are not prejudicial to the Company's interest.

(iv) Loans investments guarantees and security in respect of which provisions ofsections 185 and 186 of the Companies Act 2013 are applicable have been complied with bythe Company.

(v) The Company has neither accepted any deposits from the public nor accepted anyamounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Actand the rules made thereunder to the extent applicable. Accordingly the requirement toreport on clause 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act related to the products manufactured by the Company and are ofthe opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including goods and services tax provident fundemployees' state insurance income-tax duty of customs cess and other statutory dues asapplicable to the Company have generally been regularly deposited with the appropriateauthorities. According to the information and explanations given to us and based on theaudit procedures performed by us undisputed dues in respect of goods and services taxprovident fund employees' state insurance income-tax duty of customs cess and otherstatutory dues as applicable to the Company which were outstanding at the year end for aperiod of more than six months from the date they became payable are as follows:

Statement of Arrears of Statutory Dues Outstanding for More than Six Months as at March31 2022:

Name of the Statute Nature of the Dues Amount (Rs in lakhs) Period to which the amount relates Due Date Date of Payment
The Jharkhand Tax on Professions Trades Callings and Employments Act 2011 Professional Tax 0.95 October 2018 to June 2021 January 2019 to July 2021 May 11 2022

(b) The dues of goods and services tax provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added taxcess and other statutory dues which have not been deposited on account of any disputeare as follows:

Name of the statute Nature of dues Amount (Rs in lakhs) Period to which the amount relates Amount paid under protest (Rs in lakhs) Forum where dispute is pending
Central Sales Tax Act Central Sales tax 8.38 2011-12 & 2012-13 0.56 Sales Tax Tribunal
Orissa Entry Tax Act Entry Tax 155.37 2011-12 & 2012-13 10.36 Sales Tax Tribunal
Orissa Value Added Tax Act Value added tax 520.13 2007-08 to 2012-13 57.38 Sales Tax Tribunal
Orissa Value Added Tax Act Value added tax 16.65 2014- 15 & 2015- 16 0.70 Sales Tax Tribunal
Bihar Entry Tax Act Entry Tax 39.08 2013-14 & 2015-16 6.04 Joint Commissioner of Commercial Taxes (Appeals)
Bihar Value Added Tax Act Value added tax 85.50 2015-16 & 2017-18 Joint Commissioner of Commercial Taxes (Appeals)
Andhra Pradesh Value Added Tax Act Value added tax 12.82 April 2006 to June 2010 3.20 Appellate Tribunal (Commercial Taxes) Telangana
Uttarakhand Value Added Tax Act Value added tax 3.78 2014-15 0.76 Joint Commissioner Commercial Taxes (Appeals)
Income Tax Act 1961 Income tax 4543.27 AY 2008-09; AY 2010-11 to AY 2014-15 & AY 2016-17 to AY 2018-19 837.08 Commissioner of Income Tax (Appeals)
Finance Act 1994 Service tax 42.38 2014-15 201516 & 2016-17 1.17 Commissioner (Appeals) GST & Central Excise
Central Goods and Services taxes Act 2017 Goods and Services tax 31.62 2017-18 1.83 Commissioner of Customs and Central Excise (Appeals)
Central Goods and Services taxes Act 2017 Goods and Services tax 5.51 2020-21 5.51 Joint Commissioner (Appeals)
Central Excise Act 1944 Central Excise duty 35.89 2016- 17 & 2017- 18 1.17 Commissioner of GST & Central Excise (Appeals)
Andhra Pradesh Value Added Tax Act Value added tax 80.54 2016- 17 & 2017- 18 30.20 Appellate Joint Commissioner (Commercial Taxes)

(viii) The Company has not surrendered or disclosed any transaction previouslyunrecorded in the books of account in the tax assessments under the Income Tax Act 1961as income during the year. Accordingly the requirement to report on clause 3(viii) of theOrder is not applicable to the Company.

(ix) (a) The Company has not defaulted in repayment of

loans or other borrowings or in the payment of interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.

(c) The Company did not have any term loans outstanding during the year hence therequirement to report on clause (ix)(c) of the Order is not applicable to the Company.

(d) On an overall examination of the accompanying standalone Ind AS financialstatements of the Company no funds raised on short-term basis have been used forlong-term purposes by the Company.

(e) On an overall examination of the accompanying standalone Ind AS financialstatements of the Company the Company has not taken any funds from any entity or personon account of or to meet the obligations of its subsidiaries. Further the Company doesnot have any associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiaries. Further the Company does not have any associates or joint ventures.

(x) (a) The Company has not raised any money during

the year by way of initial public offer / further public offer (including debtinstruments) hence the requirement to report on clause 3(x)(a) of the Order is notapplicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares/fully or partially or optionally convertible debentures during the year under audit andhence the requirement to report on clause 3(x)(b) of the Order is not applicable to theCompany.

(xi) (a) No fraud by the Company or no material fraud

on the Company has been noticed or reported during the year.

(b) During the year no report under sub-section (12) of section 143 of the Act hasbeen filed by cost auditor secretarial auditor or by us in Form ADT - 4 as prescribedunder Rule 13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.

(c) As represented to us by the management there are no whistle blower complaintsreceived by the Company during the year.

(xii) The Company is not a Nidhi Company as per the provisions of the Act. Thereforethe requirement to report on clause 3(xii)(a) to (c) of the Order is not applicable to theCompany.

(xiii) Transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and the details have been disclosed in the notes to theaccompanying standalone Ind AS financial statements as required by the applicableaccounting standards.

(xiv) (a) The Company has an internal audit system

commensurate with the size and nature of its business.

(b) The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions with its directors orpersons connected with its directors and hence requirement to report on clause 3(xv) ofthe Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve

Bank of India Act 1934 (2 of 1934) are not applicable to the Company. Accordingly therequirement to report on clause (xvi)(a) of the Order is not applicable to the Company.

(b) The Company is not engaged in any NonBanking Financial or Housing Financeactivities. Accordingly the requirement to report on clause (xvi)(b) of the Order is notapplicable to the Company.

(c) The Company is not a Core Investment Company as defined in the regulations made byReserve Bank of India. Accordingly the requirement to report on clause 3(xvi)(c) of theOrder is not applicable to the Company.

(d) There is no Core Investment Company as a part of the Group hence the requirementto report on clause 3(xvi)(d) of the Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses in the current year and in theimmediately preceding financial year respectively.

(xviii) There has been no resignation of the statutory auditors during the year andaccordingly requirement to report on Clause 3(xviii) of the Order is not applicable to theCompany.

(xix) On the basis of the financial ratios disclosed in Note 53 to the accompanyingstandalone Ind AS financial statements ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thestandalone Ind AS financial statements our knowledge of the Board of Directors andmanagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report that Company is not capable ofmeeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date. We however state that this isnot an assurance as to the future viability of the Company. We further state that ourreporting is based on the facts up to the date of the audit report and we neither give anyguarantee nor any assurance that all liabilities falling due within a period of one yearfrom the balance sheet date will get discharged by the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects there

are no unspent amounts that are required to be transferred to a fund specified inSchedule VII of the Act in compliance with second proviso to sub section 5 of section 135of the Act. This matter has been disclosed in Note 37 to the accompanying standalone IndAS financial statements.

(b) There are no unspent amounts in respect of ongoing projects that are required tobe transferred to a special account in compliance of provision of sub section (6) ofsection 135 of the Act. This matter has been disclosed in note 37 to the accompanyingstandalone Ind AS financial statements.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W / E300004
Sd / -
per Sandeep Karnani
Partner
Place of Signature: Bengaluru Membership Number: 061207
Date: May 19 2022 UDIN:22061207AJFVSG8807

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF V-GUARD INDUSTRIES LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to standalone Ind ASfinancial statements of V-Guard Industries Limited ("the Company") as of March31 2022 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended on 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 Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone Ind AS financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to these standalone Ind AS financial statements wasestablished and maintained 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 with reference to these standalone Ind AS financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone Ind AS financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone Ind ASfinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone Ind AS 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 Company's internal financial controls withreference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls with reference to these Standalone Ind ASFinancial Statements

A company's internal financial controls with reference to standalone Ind AS financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with Generally Accepted Accounting Principles. A company's internalfinancial controls with reference to standalone Ind AS financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone Ind AS financial statements in accordance withGenerally Accepted Accounting Principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls with reference to Standalone Ind ASFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone Ind AS financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial control with reference to standalone IndAS financial statements may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone Ind AS financial statements and such internalfinancial controls with reference to standalone Ind AS financial statements were operatingeffectively as at March 31 2022 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W / E300004
Sd / -
per Sandeep Karnani
Partner
Place of Signature: Bengaluru Membership Number: 061207
Date: May 19 2022 UDIN:22061207AJFVSG8807

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