TO
THE MEMBERS OF
XPRO INDIA LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
1. We have audited the accompanying standalone financial statements of Xpro IndiaLimited (‘the Company') which comprise the Balance Sheet as at 31 March 2022 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlow and the Statement of Changes in Equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information.
2. 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 true andfair view in conformity with the Indian Accounting Standards (‘Ind AS') specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 and other accounting principles generally accepted in India of the state of affairsof the Company as at 31 March 2022 and its profit (including other comprehensive loss)its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI')together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
4. 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.
5. We have determined the matter described below to be the key audit matter to becommunicated in our report.
| Key audit matter | How our audit addressed the key audit matter |
| Recognition and recoverability of deferred tax assets | |
| Refer note 4(n) of Summary of significant accounting policies and other explanatory information and the note 26 of the financial statements of the Company for the year ended 31 March 2022. | Our key audit procedures included but were not limited to the following procedures: |
| At the balance sheet date 31 March 2022 the Company has recognised deferred tax assets (net) of Rs. 454.52 lacs which includes deferred tax asset recognized for carried forward tax losses and unabsorbed depreciation amounting to Rs. 1020.98 lacs (31 March 2021: Rs. 384.00 lacs). | a) Evaluated the design and tested the operating effectiveness of key controls implemented by the Company over recognition of deferred tax assets. |
| The assessment of meeting the recognition criteria as well as assessment of recoverability of deferred tax assets created for unabsorbed losses including depreciation within the period prescribed under the relevant tax laws involves significant judgement regarding the likelihood of its realisation within the specified time period through estimation of future taxable profits of the Company and consequently there is a risk that such deferred tax assets may not be realised within the specified period if these future projections are not met. | b) Understood the process and tested the relevant key controls over preparation of future taxable profit projections based on reasonable and supportable assumptions. |
| Determining forecasts of future projections and taxable profits include key factors such as future growth rate market conditions expected reduction in fixed costs and finance costs and closure of loss making business lines. These assumptions and estimates are judgmental subjective and depend on the future market and economic conditions and materialization of the Company's expansion plans. | c) Reconciled the future taxable profit projections to future business plans of the Company as approved by the Board of Directors. |
| Owing to the significance of the balances and inherent uncertainty involved in judgements and estimates of future taxable profits as described above we have considered recognition and recoverability of deferred tax assets recognised during the current year as a key audit matter. | d) Tested the assumptions used in the aforesaid future projections such as growth rates expected savings etc considering our understanding of business actual historical results other relevant existing conditions |
| external data and market conditions and challenged management's judgements relating to the forecasts of future taxable profits to conclude on the reasonableness of the assumptions. |
| e) Compared the prior year expected tax profits with the actual results to determine the efficacy of the management's budgeting process. |
| f) Tested the arithmetical accuracy of the projections including those related to sensitivity analysis performed by management. |
| g) Performed independent sensitivity analysis to the key assumptions used in the future projections to determine impact of estimation uncertainty on future taxable profits. |
| h) Evaluated management's assessment of time period available for adjustment of such deferred tax assets as per provisions of the Income-tax Act 1961. |
| i) Re-computed the amount of deferred tax assets as appearing in the financial statements. |
| j) Assessed the appropriateness and adequacy of the disclosures included in the accompanying standalone financial statements in accordance with applicable accounting standards. |
Information other than the Standalone Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors are responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation and presentation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the Ind AS specified under section 133 ofthe Act and other accounting principles generally accepted in India. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
8. In preparing the standalone financial statements the Board of Directors of theCompany are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors of the Company either intend toliquidate the Company or to cease operations or has no realistic alternative but to doso.
9. Those Board of Directors of the Company are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.
11. As part of an audit in accordance with Standards on Auditing specified undersection 143(10) of the Act we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalonefinancial 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 hasadequate internal financial controls system with reference to financial statements inplace and the operating effectiveness 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 Board of Directors' use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern;
• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation;
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. 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.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone 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
15. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor's Report) Order 2020 (‘the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Orderto the extent applicable.
17. Further to our comments in Annexure 1 as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;
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 standalone financial statements dealt with by this report are in agreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;
e) On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2022 from being appointed as a director in terms of section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company as on 31 March 2022 and the operating effectiveness ofsuch controls refer to our separate Report in Annexure 2 wherein we have expressed anunmodified opinion; and
g) With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. the Company as detailed in note 41 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2022;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2022;
iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31 March 2022;
iv. a. The management has represented that to the best of its knowledge and belief asdisclosed in note 54(i) to the standalone financial statements no funds have beenadvanced or loaned or invested (either from borrowed funds or securities premium or anyother sources or kind of funds) by the Company to or in any persons or entities includingforeign entities (‘the intermediaries') with the understanding whether recorded inwriting or otherwise that the intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company (‘the Ultimate Beneficiaries') or provide any guarantee security or thelike on behalf the Ultimate Beneficiaries;
b. The management has represented that to the best of its knowledge and belief asdisclosed in note 54(j) to the standalone financial statements no funds have beenreceived by the Company from any persons or entities including foreign entities(‘the Funding Parties') with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the FundingParty (‘Ultimate Beneficiaries') or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures performed as considered reasonable and appropriate inthe circumstances nothing has come to our notice that has caused us to believe that themanagement representations under sub-clauses (iv)(a) and (iv)(b) above contain anymaterial misstatement.
v. As stated in note 53 to the accompanying standalone financial statements the Boardof Directors of the Company have proposed final dividend for the year ended 31 March 2022which is subject to the approval of the members at the ensuing Annual General Meeting. Thedividend declared during the year ended 31 March 2022 by the company is in accordance withsection 123 of the Act to the extent it applies to declaration of dividend.
Annexure 1 referred to in Paragraph 16 of the Independent Auditor's Report of even dateto the members of Xpro India Limited on the standalone financial statements for theyear ended 31 March 2022
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 report that:
(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment and right ofuse assets.
(B) The Company has maintained proper records showing full particulars of intangibleassets.
(b) The property plant and equipment and right of use assets have been physicallyverified by the management during the year and no material discrepancies were noticed onsuch verification. In our opinion the frequency of physical verification program adoptedby the Company is reasonable having regard to the size of the Company and the nature ofits assets.
(c) The title deeds of all the immovable properties held by the Company (other thanproperties where the Company is the lessee and the lease agreements are duly executed infavour of the lessee) are held in the name of the Company.
(d) The Company has not revalued its Property Plant and Equipment Right of Use assetsor intangible assets during the year.
(e) No proceedings have been initiated or are pending against the Company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder. Accordingly reporting under clause 3(i)(e) of the Order is notapplicable to the Company.
(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year. In our opinion the coverage and procedure of such verificationby the management is appropriate and no discrepancies of 10% or more in the aggregate foreach class of inventory were noticed.
(b) The Company has a working capital limit in excess of Rs 5 crore sanctioned by banksbased on the security of current assets. The quarterly returns/statements in respect ofthe working capital limits have been filed by the Company with such banks and suchreturns/statements are materially in agreement with the books of account of the Companyfor the respective periods which were not subject to audit.
(iii) (a) The Company has not made any investment in provided any guarantee orsecurity or granted any loans or advances in the nature of loans secured or unsecured tocompanies firms Limited Liability Partnerships (LLPs). However the Company has providedloans and advances in the nature of loans amounting to Rs. 22.60 lacs to others during theyear. The outstanding balances of such loans and advances in the nature of loans as at 31March 2022 is Rs. 22.86 lacs.
(b) In our opinion and according to the information and explanations given to us theterms and conditions of the grant of all loans and advances in the nature of loansprovided are prima facie not prejudicial to the interest of the Company.
(c) In respect of loans and advances in the nature of loans granted by the Company theschedule of repayment of principal and payment of interest has been stipulated and therepayments/receipts of principal and interest are regular.
(d) There is no overdue amount in respect of loans or advances in the nature of loansgranted other parties.
(e) The Company has not granted any loan or advance in the nature of loan which hasfallen due during the year. Further no fresh loans were granted to any party to settlethe overdue loans/advances in nature of loan.
(f) The Company has not granted any loans or advances in the nature of loans which arerepayable on demand or without specifying any terms or period of repayment.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 186 of the Act in respect ofinvestments as applicable. Further the Company has not entered into any transactioncovered under section 185 and section 186 of the Act in respect of loans guarantees andsecurity.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits or there is no amount which has been considered asdeemed deposit within the meaning of sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly reporting under clause3(v) of the Order is not applicable to the Company.
(vi) The Central Government has specified maintenance of cost records under sub-section(1) of section 148 of the Act in respect of the products of the Company. We have broadlyreviewed the books of account maintained by the Company pursuant to the Rules made by theCentral Government for the maintenance of cost records and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.
(vii) (a) In our opinion and according to the information and explanations given tous undisputed statutory dues including goods and services tax provident fund employees'state insurance income-tax sales-tax service tax duty of customs duty of excisevalue added tax cess and other material statutory dues as applicable have generallybeen regularly deposited with the appropriate authorities by the Company though therehave been slight delays in a few cases. Further no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us there are no statutorydues referred in sub-clause
(a) which have not been deposited with the appropriate authorities on account of anydispute except for the following:
| Name of the statute | Nature of dues | Amount (Rs in lacs) | Amount paid under Protest (Rs in lacs) | Period to which the amount relates | Forum where dispute is pending |
| Central Excise Act 1944 | Excise Duty | 19.92 | - | 2012-14 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 9.88 | 0.74 | 2016-18 | Superintendent Central Excise Kolkata |
| Central Excise Act 1944 | Excise Duty | 11.73 | - | 2010-11 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 10.59 | - | 2010-11 | Commissioner of Central Excise Appeals Kolkata |
| Sales Tax Act | UP Trade Tax | 4.26 | 3.41 | 2004-05 | Commissioner of Sales Tax |
| Sales Tax Act | Sales Tax Demand | 35.06 | 3.88 | 1996-2011 | Deputy Commissioner (Appeal) Durgapur |
| Sales Tax Act | Sales Tax Demand | 0.91 | 0.23 | 2013-14 | Office of appellate authority commercial tax department Madhya Pradesh |
| Central Excise Act 1944 | Excise Duty | 22.62 | - | 2013-15 | D irectorate General of Central Excise Intelligence |
| Central Excise Act 1944 | Excise Duty | 12.79 | - | 2013-15 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 6.64 | - | 2014-16 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 4.09 | - | 2015-16 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 15.53 | 1.86 | 2013-15 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 9.31 | - | 2014-16 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 26.93 | 2.29 | 2015-16 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 26.00 | 2.66 | 2016-17 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 1.32 | 0.40 | 2014-17 | Commissioner of Central Excise Appeals Kolkata |
| Sales Tax Act | Uttar Pradesh Entry Tax | 11.34 | | 2002-03 | Hon'ble Supreme Court of India |
| Central Excise Act 1944 | Excise Duty | 7.28 | - | 2014-17 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Excise Duty | 61.23 | - | 2018-19 | Assistant Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Service Tax | 0.82 | 0.25 | 2014-17 | Commissioner of Central Excise Appeals Kolkata |
| Central Excise Act 1944 | Service Tax | 53.11 | - | 2014-16 | Commissioner of Central Excise Appeals Kolkata |
| Central Goods & Service Tax Act 2017 | Excise Duty | 0.32 | | 2013-14 | Assistant Commissioner CGST & Central Excise Bankura |
| Central Goods & Service Tax Act 2017 | Excise Duty | 23.90 | | 2014-17 | Assistant Commissioner CGST & Central Excise Bankura |
| Central Goods & Service Tax Act 2017 | Excise Duty | 1.80 | | 2014-17 | Assistant Commissioner CGST & Central Excise Bankura |
| Central Goods & Service Tax Act 2017 | Excise Duty | 1.42 | | 2017-18 | Assistant Commissioner CGST & Central Excise Bankura |
| Goods & Service Tax Act 2017 | GST | 27.60 | | 2017-18 | Supreme Court |
(viii) According to the information and explanations given to us no transactions weresurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961) which have not been recorded in the books of accounts.
(ix) (a) According to the information and explanations given to us the Company has notdefaulted in repayment of its loans or borrowings or in the payment of interest thereon toany lender.
(b) According to the information and explanations given to us including confirmationsreceived from banks and representation received from the management of the Company and onthe basis of our audit procedures we report that the Company has not been declared awilful defaulter by any bank or financial institution or other lender.
(c) In our opinion and according to the information and explanations given to us moneyraised by way of term loans were applied for the purposes for which these were obtained.
(d) In our opinion and according to the information and explanations given to us andon an overall examination of the financial statements of the Company funds raised by theCompany on short term basis have not been utilised for long term purposes.
(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company the Company has not taken anyfunds from any entity or person on account of or to meet the obligations of itssubsidiary.
(f) According to the information and explanations given to us the Company has notraised any loans during the year on the pledge of securities held in its subsidiary.
(x) (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly reporting underclause 3(x)(a) of the Order is not applicable to the Company.
(b) During the year the Company has made preferential allotment of convertiblewarrants. In our opinion and according to the information and explanations given to usthe Company has complied with the requirements of section 42 and section 62 of the Act andthe rules framed thereunder with respect to the same. Further the amounts so raised wereused for the purposes for which the funds were raised though idle funds which were notrequired for immediate utilisation have been invested in readily realisable liquidinvestments. During the year the Company did not make preferential allotment/privateplacement of fully/partly or optionally convertible debentures.
(xi) (a) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or on the Company has been noticed or reported duringthe period covered by our audit.
(b) No report under section 143(12) of the Act has been filed with the CentralGovernment for the period covered by our audit.
(c) According to the information and explanations given to us including therepresentation made to us by the management of the Company there are no whistle-blowercomplaints received by the Company during the year.
(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it. Accordingly reporting under clause 3(xii) of the Order is not applicable to theCompany.
(xiii) In our opinion and according to the information and explanations given to usall transactions entered into by the Company with the related parties are in compliancewith sections 177 and 188 of the Act where applicable. Further the details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedin Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 ofthe Act.
(xiv) (a) In our opinion and according to the information and explanations given to usthe Company has an internal audit system as required under section 138 of the Act which iscommensurate with the size and nature of its business.
(b) We have considered the reports issued by the Internal Auditors of the Company tilldate for the period under audit.
(xv) According to the information and explanation given to us the Company has notentered into any non-cash transactions with its directors or persons connected with themand accordingly provisions of section 192 of the Act are not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly reporting under clause 3 (xvi) (a) (b) and (c) ofthe Order are not applicable to the Company. Based on the information and explanationsgiven to us and as represented by the management of the Company the Group (as defined inCore Investment Companies (Reserve Bank) Directions 2016) does not have any CoreInvestment Company.
(xvii) The Company has not incurred any cash loss in the current as well as theimmediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during the year.Accordingly reporting under clause 3(xviii) of the Order is not applicable to theCompany.
(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the standalone financialstatements our knowledge of the plans of the Board of Directors and management and basedon our examination of the evidence supporting the assumptions nothing has come to ourattention which causes us to believe that any material uncertainty exists as on the dateof the audit report that Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the company as and when they fall due.
(xx) According to the information and explanations given to us the Company does nothave any unspent amount in respect of any ongoing or other than ongoing project as at theexpiry of the financial year. Accordingly reporting under clause 3(xx) of the Order isnot applicable to the Company.
(xxi) The reporting under clause 3(xxi) of the Order is not applicable in respect ofaudit of standalone financial statements of the Company. Accordingly no comment has beenincluded in respect of said clause under this report.
Annexure 2 to the Independent Auditor's Report of even date to the members of XproIndia Limited on the standalone financial statements for the year ended 31 March2022
Annexure 2
Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (‘the Act')
1. In conjunction with our audit of the standalone financial statements of Xpro IndiaLimited (the ‘Company') as at and for the year ended 31 March 2022 we have auditedthe internal financial controls with reference to the standalone financial statements ofthe Company as at that date.
Responsibilities of Management and Those Charged with Governance for Internal FinancialControls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference to thestandalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (‘the Guidance Note') issued by theInstitute of Chartered Accountants of India ("ICAI"). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of theCompany's business including adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Act.
Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to the Standalone Financial Statements
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the standalone financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the ICAIprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements and theGuidance Note issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements were established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to the standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto the standalone financial statements includes obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.
5. 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 the standalone financial statements.
Meaning of Internal Financial Controls with Reference to the Standalone FinancialStatements
6. A company's internal financial controls with reference to the standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of the standalone financial statements forexternal purposes in accordance with generally accepted accounting principles.
A company's internal financial controls with reference to the standalone financialstatements include those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with Reference to the StandaloneFinancial Statements
7. Because of the inherent limitations of internal financial controls with reference tothe standalone 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 the standalone financial statements to future periods aresubject to the risk that the internal financial controls with reference to the standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to the standalone financial statements and such controlswere operating effectively as at 31 March 2022 based on internal financial controls withreference to the standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.
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| Chartered Accountants |
| Firm's Registration No. 001076N/N500013 |
| Nitin Toshniwal Partner |
| Membership No. 507568 |
| UDIN: 22507568AJOEWG6422 |
| Place: Faridabad |
| Date: 25 May 2022 |
