To The Members of
VSF PROJECTS LIMITED
Report on Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of VSF PROJECTS LIMITED ("the
Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement
of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in
Equity and the Statement of Cash Flows for the year then ended and a summary of the
significant accounting policies and other explanatory information
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Company as at March
31, 2023, and its profit, total comprehensive income, the changes in equity and 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) specified
under Section 143(10) of the act. Our responsibilities under those SAs are further
described in the Auditors Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters (‘KAM) are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We have determined that there are no key audit matters to be communicated
in our report.
Other Information
The Companys management and Board of Directors are responsible for the other
information. The other information comprises the information included in the Companys
annual report, but does not include the financial statements and our auditors report
thereon. Our opinion on the financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude
that there are no material misstatements of this other information, we are required to
report that fact. We have nothing to report in this regard.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position,
financial performance including other comprehensive income, cash flows and changes in
equity of the Company in accordance with the Indian Accounting Standards (Ind AS)
prescribed under section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, and other accounting principles generally accepted in
India.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management and Board of Directors are
responsible for assessing the Companys ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companys financial reporting
process
Auditors Responsibility for the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the 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 control 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 with reference to financial statements 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 managements 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 Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
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 financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020, issued by the
department of company affairs, in terms of section 143 (11) of the companies Act, 2013,
and on the basis of our examination of the books and records as we considered appropriate
and according to the information and explanation given to us, we give in the "Annexure
A" a statement on the matters specified in paragraph 3 and 4 of the Order, to the
extent applicable.
2. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the 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 the
Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this
Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the
Company as on March 31, 2023 taken on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2023 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 over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B" Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting. With respect to the other matters to be included in the
Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,
2020, as amended, in our opinion and to the best of our information and according to the
explanations given to us:
i. The Company has no pending litigations as on balance sheet date.
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
iv. The management has represented, to the best of their knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the
company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
v. The management has represented, to the best of their knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been received by the company
from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
vi. Based on the audit procedures performed by us, which has considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under subclause (iv) and (v) contain any material
mis-statement.
vii. The company hasnt declared any Dividend for the current year.
g) With respect to the matter to be included in the Auditors Report under section
197(16) of the Act, as amended, in our opinion and to the best of our information and
according to the explanations given to us, the remuneration paid/provided by the company
to its directors during the year is in accordance with the provisions of the section197 of
the Act.
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of VSF
PROJECTS LIMITED ("the Company") as of March 31, 2023 in conjunction with
our audit of the financial statements of the Company for the year ended on that date.
Opinion
In our opinion, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2023, based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining
internal financial controls based on the internal control over financial reporting
criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the internal financial controls over
financial reporting of the Company based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants
of India and the Standards on Auditing prescribed under Section 143(10) of the Companies
Act, 2013, to the extent applicable to an audit of internal financial controls. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of VSF Projects Limited of even date)
To the best of our information and according to the explanations provided to us by the
Company and the books of account and records examined by us in the normal course of audit,
we state that
i. In respect of the Companys Property, Plant and Equipment:
a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipment including leased
assets.
b) The Company has maintained proper records showing full particulars of intangible
assets.
c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has a regular programme of physical
verification of its Property, Plant and Equipment. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the Company and the
nature of its assets. No discrepancies were noticed on such verification.
d) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties (other
than immovable properties where the Company is the lessee and the leases agreements are
duly executed in favour of the lessee) disclosed in the financial statements are held in
the name of the Company.
e) The Company has not revalued any of its Property, Plant and Equipment including
right of use assets during the year.
f) No proceedings have been initiated during the year or are pending against the
Company as at March 31, 2023 for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
ii. a) The Company does not have any inventory at the year end. Accordingly, clause
3(ii)(a) of the Order is not applicable.
b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not been sanctioned any working
capital limits in excess of five crore rupees in aggregate from banks and financial
institutions on the basis of security of current assets at any point of time of the year.
Accordingly, clause 3(ii)(b) of the Order is not applicable to the Company.
iii. According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not made any investments,
provided guarantee or security or granted any loans or advances in the nature of loans,
secured or unsecured, to companies, firms, limited liability partnerships or any other
parties during the year. Accordingly, provisions of clauses 3(iii)(a) to 3(iii)(f) of the
Order are not applicable to the Company.
iv. According to the information and explanations given to us and on the basis of our
examination of records of the Company, the Company has neither made any investments nor
has it given loans or provided guarantee or security and therefore the relevant provisions
of Sections 185 and 186 of the Companies Act, 2013 ("the Act") are not
applicable to the Company. Accordingly, clause 3(iv) of the Order is not applicable.
v. The Company has not accepted any deposits or amounts which are deemed to be deposits
from the public. Accordingly, clause 3(v) of the Order is not applicable.
vi. According to the information and explanations given to us, the Central Government
has not prescribed the maintenance of cost records under Section 148(1) of the Act for the
products manufactured by it (and/or services provided by it). Accordingly, clause 3(vi) of
the Order is not applicable.
vii. a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company, no undisputed amounts payable in respect of
Goods and Services Tax (‘GST), Provident fund, Employees State Insurance,
Income-Tax, Duty of Customs, Cess and other statutory dues were in arrears as at 31 March
2023 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, there are no statutory dues relating to Goods
and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or
Cess or other statutory dues, which have not been deposited with the appropriate
authorities on account of any dispute.
viii. According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not surrendered or disclosed
any transactions, previously unrecorded as income in the books of account, in the tax
assessments under the Income Tax Act, 1961 as income during the year
ix. a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company, the Company has not defaulted in repayment
of loans and borrowing or in the payment of interest thereon to any lender.
b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not been declared a wilful
defaulter by any bank or financial institution or government or government authority.
c) According to the information and explanations given to us by the management, the
Company has not obtained any term loans during the year. Accordingly, clause 3(ix)(c) of
the Order is not applicable.
d) The Company does not hold any investment in any subsidiary, associate or joint
venture (as defined under the Act) during the year ended 31 March 2023. Accordingly,
clause 3(ix)(e) is not applicable.
x. a) The Company has not raised any moneys by way of initial public offer or further
public offer (including debt instruments) Accordingly, clause 3(x)(a) of the Order is not
applicable.
b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not made any private placement
of shares or fully or partly convertible debentures during the year. In our opinion, in
respect of preferential allotment of equity shares made during the year, the Company has
duly complied with the requirements of Section 42 and Section 62 of the Act. The Company
has issued 577797 shares for non-cash consideration. The proceeds from issue of 130000
equity shares have been used for the purposes for which the funds were raised.
xi. a) Based on examination of the books and records of the Company and according to
the information and explanations given to us, no fraud by the Company or on the Company
has been noticed or reported during the course of the audit.
b) According to point stated above no report under sub-section (12) of Section 143 of
the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the
Companies (Audit and Auditors) Rules, 2014 with the Central Government.
c) As represented to us by the management, there are no whistle blower complaints
received by the Company during the year.
xii. According to the information and explanations given to us, the Company is not a
Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.
xii. In our opinion and according to the information and explanations given to us, the
transactions with related parties, if any, are in compliance with Section 177 and 188 of
the Act, where applicable, and the details of the related party transactions have been
disclosed in the financial statements as required by the applicable accounting standards.
xiv. Based on information and explanations provided to us and our audit procedures, in
our opinion, the Company has an internal audit system commensurate with the size and
nature of its business.
xv. In our opinion and according to the information and explanations given to us, the
Company has entered into a non-cash transaction with two directors/ persons connected with
the directors. In our opinion, the transaction, which is of issue of shares against
unsecured loans given by directors, is covered under the provisions of section 192 of the
Act for which prior approval has been obtained in general meeting of the company.
xvi. a) The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934. Accordingly, clause 3(xvi)(a) and Clause 3(xvi)(b) of the Order
is not applicable.
b) The Company is not a Core Investment Company (CIC) as defined in the regulations
made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Order is not
applicable.
c) The Company is not part of any group (as per the provisions of the Core Investment
Companies (Reserve Bank) Directions, 2016 as amended).Accordingly, the requirements of
clause 3(xvi)(d) are not applicable.
xvii. The Company has not incurred cash losses in the current and in the immediately
preceding financial year.
xviii. There has been no resignation of the statutory auditors during the year.
Accordingly, clause 3(xviii) of the Order is not applicable.
xix. According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realisation of financial assets and payment
of financial liabilities, other information accompanying the [standalone] financial
statements, our knowledge of the Board of Directors and management plans and based on our
examination of the evidence supporting the assumptions, nothing has come to our attention,
which causes us to believe that any material uncertainty exists as on the date of the
audit report that the Company is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period of one year from the
balance sheet date. We, however, state that this is not an assurance as to the future
viability of the Company. We further state that our reporting is based on the facts up to
the date of the audit report and we neither give any guarantee nor any assurance that all
liabilities falling due within a period of one year from the balance sheet date, will get
discharged by the Company as and when they fall due.
xx. The requirements as stipulated by the provisions of Section 135 are not applicable
to the Company. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not
applicable.
xxi. There are no qualifications or adverse remarks given by the respective auditors in
the Companies (Auditors Report) Order (CARO) reports, hence this clause is not applicable
to the company
For NSVR &ASSOCIATES LLP.,
Chartered Accountants
FRN No.008801S/S200060
P.Venkata Ratnam
Partner
M.no:230675
UDIN: 23230675BGW GLZ8751
Place: Hyderabad
Date:30-05-2023
CIN: L05005AP1992PLC014326
+91-9892691696
