The members of
VXL Instruments Limited
Report on the Audit of the Standalone Financial Statements:
We have audited the accompanying standalone financial statements of M/s. VXLInstruments Limited ("the Company") which comprise the balance sheet as atMarch 31 2022 the statement of Profit and Loss statement of changes in equity andstatement of cash flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of a airs of the Company as at March 31 2022 and its loss changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of thestandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
a) We draw your attention to Note No. 9 of the Financial Statement wherein tradereceivables reported by the company includes Rs.4.11 Crore is receivable from one of theforeign customers which is outstanding for more than 1 year and the management of thecompany is con dent of recovering the same.
Our opinion on the financial Statement is not modified in respect of above matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|1. Revenue Recognition ||Principal Audit Procedures |
|Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer which is mainly upon delivery. ||Our audit approach was a combination of test of internal controls and substantive procedures including |
| ||Assessing the appropriateness of the Company's revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof. |
|The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance ||Evaluating the design and implementation of Company's controls in respect of revenue recognition. |
| ||Testing the effectiveness of such controls over revenue cut o at year-end. |
| ||Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end including examination of credit notes issued after the year end to determine whether revenue was recognised in the correct period. |
| ||Performing analytical procedures on current year revenue based on monthly trends and where appropriate conducting further enquiries and testing. |
Information Other than the Ind AS 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 Company's annual report but does notinclude the standalone financial statements and our auditor's report thereon. Such otherinformation is expected to be made available to us after the date of this auditor'sreport.
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 when it becomes available and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take appropriate action accordingly.
Responsibility of Management for the standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone 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.
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Ind AS 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 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 financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosure are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone ` financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be in uenced. 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.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit ndings 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.
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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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 tothe best of 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.
The Balance Sheet the Statement of Profit and Loss statement of changes in equity andthe Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount.
(d)In our opinion the aforesaid standalone financial statements comply with thespecified under Section 133 of the Act.
(e) On the basis of written representations received from the directors as onMarch 31 2022 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of section164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
(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 standalone financial statements
ii. The Company did not have any long-term contracts including derivative contracts forwhich there are material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person orentity including foreign entity ("Intermediary") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the company ("Ultimate Bene ciaries") or provideany guarantee security or the like on behalf of the Ultimate Bene ciaries;
(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the company from any person or entity including foreignentity ("Funding Party") with the understanding whether recorded in writing orotherwise that the company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Bene ciaries") or provide any guarantee security orthe like on behalf of the Ultimate Bene ciaries
Based on the audit procedures that have been considered reasonable and appropriate inthe circumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b)above contain any material mis-statement.
v. The company has not declared or paid any dividend during the year incontravention of the provisions of section 123 of the Companies Act 2013
3) With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act.
"Annexure A" to the Independent Auditors Report
(Referred to in paragraph 2(f) under the heading 'Report on Other Legal &Regulatory Requirements' of our report of even date to the standalone financial statementsof the company for the year ended 31st March 2022)
As per the books and records produced before us and as per the information andexplanations given to us and based on such audit checks that we considered necessary andappropriate we con rm that:
In respect of the Company's Property Plant and Equipment and Intangible Assets:
(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment and relevant detailsof right-of-use assets. (B) The Company has maintained proper records showing fullparticulars of intangible assets.
(b) As per the information and explanation given to us all Property Plant andEquipment right-of-use assets and other Intangible assets have been physically veri ed bythe management during the year which in our opinion is reasonable having regard to sizeof the company and the nature of its assets. As explained to us no material discrepancieswere noticed on such veri cation.
As per the information and explanation given to us and based on the examination of therecords of the Company there are no immovable properties held by the company. Hencereporting under clause 3(i)(c) of the Order is not applicable.
(d) As per the information and explanation given to us the Company has not revalued anyof its Property Plant and Equipment (including right of-use assets).
(e) As per the information and explanation given to us no proceedings have beeninitiated during the year or are pending against the Company as at March 31 2022 forholding any benami property under the Benami Transactions (Prohibition) Act 1988 (asamended in 2016) and rules made there under.
(ii) (a) The management has conducted physical veri cation of inventory at reasonableintervals during the year in our opinion the coverage and procedure of such veri cationby the management is appropriate. As informed to us any discrepancies of 10% or more inthe aggregate for each class of inventory were not noticed on such veri cation.
(b) The Company has not been sanctioned working capital limits in excess of 5 crore inaggregate at any points of time during the year from banks or financial institutions onthe basis of security of current assets and hence reporting under clause 3(ii)(b) of theOrder is not applicable.
(iii) As per the information and explanation given to us the company has not madeinvestments in provided any guarantee or security or granted any loans secured oradvances in the nature of loans secured or unsecured to companies rms LimitedLiability Partnerships or other parties. Hence reporting under clause 3(iii) of paragraph3 of the Order are not applicable.
(iv) As per the information provided and explanation given to us there are no loansinvestments guarantees and security under section 185 and 186 of the Companies Act 2013.Hence the provisions of clause 3(iv) of paragraph 3 of the Order are not applicable.
(v) As per the information provided and explanation given to us the Company has notaccepted any deposit or amounts which are deemed to be deposits. Hence reporting underclause 3(v) of the Order is not applicable
(vi) We have been informed that maintenance of cost records under sub section (1) ofsection 148 of the companies Act 2013 and the rules made there under are not applicablerelating to the operations of the company and hence the requirements of clause 3(vi) ofthe Order is not applicable .
(vii) (a)As per the information and explanations given to us the company has generallybeen regular in depositing undisputed statutory dues including Goods and service taxprovident fund income-tax cess and other statutory dues to the appropriate authorities.As explained to us the company did not have any dues on account of employee's stateinsurance duty of customs and duty of excise.
As per the information and explanations given to us no undisputed amounts payable inrespect of aforesaid dues were outstanding as on March 31 2022 for a period of more than6 months from the date they became payable.
(b)As per the information and explanations given to us the following statutory dueshave not been deposited on account of dispute:
|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 |
(viii) As per the information and explanations given to us there were no transactionsrelating to previously unrecorded income that have been surrendered or disclosed as incomeduring the year in the tax assessments under the Income Tax Act 1961(43 of 1961). Hencereporting under clause 3(viii) of the Order is not applicable.
(ix) As per the information and explanations given to us the company does not have anyloans or borrowings from a financial institution bank Government or issued anydebenture. Hence reporting under clause 3(ix) of the Order is not applicable.
(x) As per the information and explanations given to us the company has not raised anymoney by way of initial public offer or further public offer (including debt instruments)during the year. Hence reporting under clause 3(x) of the Order is not applicable.
(xi) (a) No fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
(b)No report under sub-section (12) of section 143 of the Companies Act has been led inForm ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014 withthe Central Government during the year and up to the date of this report.
As per the information and explanation given to us the Company has not received anywhistle blower complaints during the year.
(xii) The company is not a Nidhi Company. Hence reporting under clause 3(xii) of theOrder is not applicable.
(xiii) As per the information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of the Companies Act 2013where applicable and details of such transactions have been disclosed in the standalonefinancial statements as required by the applicable accounting standards.
(xiv) (a) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
(xv) As per the information and explanations given to us the Company has not enteredinto any non-cash transactions with its directors or persons connected with its directorsand hence provisions of section 192 of the Companies Act 2013 are not applicable to theCompany.
(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and also is not a core investment company (asdefined in the Core Investment Companies (Reserve Bank) Directions 2016). Hencereporting under clause 3(xvi)(a) (b) (c) and (d) of the Order is not applicable.
(xvii)The Company has incurred cash losses during the financial year covered by ouraudit and the immediately preceding financial year and below are the details of the same.
|Financial Year ||Amount of Cash loss (Rs. In Lakhs) |
|2020 -21 ||229.06 |
|2021 -22 ||0.66 |
(xviii) There has been no resignation of the statutory auditors of the Company duringthe year and hence clause 3(xviii) is not applicable to the company.
On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors' and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
(xix) (a) As per the information and explanations given to us there are no unspentamounts towards Corporate Social Responsibility (CSR) on other than ongoing projectsrequiring a transfer to a Fund specified in Schedule VII to the Companies Act incompliance with second proviso to sub-section (5) of Section 135 of the said Act.Accordingly reporting under clause 3(xx)(a) of the Order is not applicable for the year.
(b) As per the information and explanations given to us there are no ongoing projectswhere the Company has any unspent Corporate Social Responsibility (CSR) amount as at theend of the previous financial year to a Special account within a period of 30 days fromthe end of the said financial year as per the provision of section 135(6) of the Act.Accordingly reporting under clause 3(xx)(b) of the Order is not applicable for the year.
Annexure - B to the Auditors' Report
(Referred to in paragraph 2(f) under the heading 'Report on Other Legal &Regulatory Requirements' of our report of even date to the standalone financial statementsof the company for the year ended 31st March 2022)
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 over financial reporting of M/s. VXLInstruments Limited ("the Company") as of 31st March 2022 in conjunction withour audit 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 is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 over financial reporting was established and maintained and if suchcontrols operated effectively 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat 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 judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the company has in all material respects an adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2022 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.
| ||For YCRJ & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm's Registration No: 006927S |
|Place: Bengaluru ||Vijayendra R Nayak |
|Date: 26.05.2022 || |
| ||Partner |
| ||M. No. 203184 |
| ||ICAI:UDIN:22203184AJQJCK9559 |