The members of
VXL Instruments Limited
Report on the Audit of Ind AS Financial Statements:
1. We have audited the accompanying Ind AS financial statements of VXL InstrumentsLimited ("the company") which comprise the Balance Sheet as at 31st March2020 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "Ind AS financial statements").
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS)" and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and its Loss includingOther Comprehensive Income the changes in equity and its cash flows for the year endedon that date.
Basis for Opinion
3. We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the Ethical requirements thatare relevant to our audit of the Ind AS financial statements under the provisions of theCompanies Act 2013 and the Rules there under 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 opinion on the Ind AS financial statements.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the Ind AS financial statements of the current period.These matters were addressed in the context of our audit of Ind AS financial statements asa whole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.
|Sr.No. Key Audit Matter ||Auditor s Response |
|Our audit procedures included the following || |
|? We have understood and tested on sample basis the design and operating effectiveness of management control over the recognition of revenue from contracts with customers ||Revenue from operations includes Rs.987.24 lakh export sales which represents approximately 51% of the total revenue from operations reported by the company. |
|? We have read and understood the contracts with customers ||In assessing the transaction price of the aforesaid sales Management s estimation is required in measuring the provision requires for warranty against the aforesaid export sales. |
|1 We have obtained and read management's assessment of the provision for warranty. ||We considered this as key audit matter due to the materiality of the amounts and significant estimates as stated above. |
Information Other than the Ind AS Financial Statements and Auditor's Report Thereon
5. The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the Ind AS financialstatements and our auditor's report thereon.
6. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
7. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
8. 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 Responsibilities for the Ind AS Financial Statements
9. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 with respect to the preparation of these Ind ASfinancial statements that give a true and fair view of the financial position andfinancial performance of the Company in accordance with the Accounting Principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
10. In preparing the 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.
11. The Board of Directors are responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
12. Our objectives are to obtain reasonable assurance about whether the 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 Ind AS financial statements.
13. As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:
|* ||Identify and assess the risks of material misstatement of the Ind AS financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control. |
|* ||Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. |
|* ||Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. |
|* ||Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the Ind AS financial statements or if such disclosure is inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern. |
|* ||Evaluate the overall presentation structure and content of the Ind AS financial statements including the disclosures and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
14. Materiality is the magnitude of misstatements in the Ind AS 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 financial statements.
15. We also communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findings that weidentify during our audit.
16. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
17. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
18. 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 the paragraph 3 and4 of the order.
19. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
20. 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 Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisreport are in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;
(e) On the basis of written representations received from the directors as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of section 164 (2) ofthe 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 B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
(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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements. Refer clause 15 of note No.38 of the Ind ASfinancial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||For YCRJ & Associates Chartered Accountants Firm Registration No. 0006927S |
|Place: Bangalore ||(Vijayendra R Nayak) |
|Date: 30.06.2020 ||Partner Membership No. 203184 |
"Annexure A" to the Independent Auditors Report
(referred to in paragraph 18 under the heading Report on Other Legal &Regulatory Requirements' of our report of even date to the Ind AS financial statements ofthe Company for the year ended 31st March 2020.) As per the books and records producedbefore us and as per the information and explanations given to us and based on such auditchecks that we considered necessary and appropriate we confirm that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Company has a planned program of verifying all the fixed assets once a yearaccording to which all the fixed assets were physically verified by the management in theyear 2018-19. We understand that no material discrepancies were noticed on suchverification. In our opinion such physical verification program is reasonable havingregard to the size of the Company and the nature of its assets.
(c) The title deeds of immovable properties are held in the name of the Company.
According to the information and explanations given to us the records examined by usand based on the examination of the conveyance deeds provided to us we report that thetitle deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.
(ii) The inventories of the Company have been physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable. No materialdiscrepancies were noticed on such physical verification;
(iii) According to the information and explanation given to us 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. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.
(v) The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2020 and therefore the provisions of the clause 3 (v)of the Order are 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 Companies Act 2013 related to the manufacture of Company'sproducts and we are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.
(vii) (a) The Company has been generally regular in depositing undisputed statutorydues including Provident Fund Employees State Insurance GST Income tax Sales TaxWealth tax Service tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues with the appropriate authorities.
(b) According to the information and explanations given to us there are no dues ofincome tax GST sales tax service tax Excise duty cess and other material statutorydues in arrears as at March 31 2020 for a period of more than six months from the datethey became payable except as mentioned below:
|Statute ||Nature of Dues ||Amount (Rs. In lakhs) ||Period to which amount relates ||Forum where dispute is pending |
|EPF Act 1952 ||Employee Provident Fund Damages Interest under appeal ||3.37 ||2001-2004 ||Commissioner of EPFO |
|CST Act 1956 ||Central Sales Tax ||59.73 ||2001-02 to 2004-05 and 2011-12 ||Deputy Commissioner of Commercial Taxes |
|Finance Act 1994 ||Service Tax ||1278.92 ||2008-09 to 2013-14 ||Central Excise & Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Cenvat Credit ||4.32 ||2010-11 to 2016-17 ||Commissioner Appeals Central Tax |
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to banks anddebenture holders. The Company did not have any outstanding dues in respect of a financialinstitution or to Government during the year.
(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer or further public offer or debtinstruments. Further term loans were applied for the purpose for which the loans wereobtained.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the provisions ofsection 197 read with Schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withthem as referred to in section 192 of Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
| ||For YCRJ & Associates |
| ||Chartered Accountants |
| ||Firm Registration No. 0006927S |
|Place: Bangalore ||Vijayendra R Nayak |
|Date: 30.05.2020 ||Partner |
| ||Membership No. 203184 |
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the
Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of VXLInstruments Limited as of 31st March 2020 in conjunction with our audit of the Ind ASfinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 company's policies the safeguarding ofits 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.
3. 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 material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness.
5. Our audit of internal financial controls over financial reporting included obtainingan understanding of internal financial controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error.
6. 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.