VXL Instruments Ltd Management Discussions

1. FINANCIAL RESULTS

2. PERFORMANCE OF THE COMPANY:

During the financial year 2016-17 world-wide thin client sales have dipped. Decline in exports was significant. This has affected the performance of your Company too. The dip is attributable to economic factors rather than loss of interest in thin clients or desktop virtualization. The Companys losses increased due to lower sales.

FUTURE PROSPECTS

Your Company can take solace from IDCs predictions of a future thin client uptick. Greatly reduced electricity cost and IT management and maintenance cost are key factors favouring thin clients. Thin clients continue to be attractive due to very low power consumption, heat generation and noise. Thin clients offer longer meantime between failures than PCs. Thin clients enjoy a high level of system security and stability. Your Company is optimistic about the prospect of thin client market as enterprises adapt their infrastructure to meet future needs. Export market continues to be a cause for concern. Increased demand in the domestic market, sustained economic expansion, virtualization technology etc, are expected to push the demand for thin clients in the domestic market during financial year 2017-18.

Merger of VXL Instruments Limited with Priya Limited was called off due to the lack of synergies between the two Companies.

3. RISK MANAGEMENT POLICY:

The Company has not yet formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and undertakes periodical review to ensure that executive management controls risk by means of a properly designed framework.

4. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established an effective Vigil Mechanism pursuant to the provisions of Sections 177(9) and (10) of the Companies Act, 2013 and as per Regulation 4(2)(d)(iv) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 which is available on website of the Company at url http:// www.vxl.net/percheditor/resources/vxlwhistleblowerpolicy and there were no cases reported during the last period.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company continued to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Companys management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation, inputs from the Statutory, Internal and Corporate Secretarial Auditors.

6. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNAL IMPACTING GOING CONCERN STATUS OF COMPANY:

No order was passed by any court or regulator or tribunal during the period under review which impacts going concern status of the Company.

7. RELATED PARTY TRANSACTIONS (RPTs):

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Companys website. Web link for the same is www.vxl.net.in/Investors/vxl-disclosures.aspx. Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC- 2 annexed to this Report as Annexure - III.

8. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Your Company recognizes the critical significance of competent and experienced employees. The team VXL Instruments continued to stand by the Company during tiring and tough times and your Board places its appreciation for these relentless efforts, untiring dedication and sense of belongingness exhibited by the employees at all levels. Your Company focuses on long term Human Resources planning aimed at managing change more efficiently, grooming internal talent for future roles and also driving efficiency within the Organization.

Industrial relations have been cordial and constructive, which have helped your Company to meet customers demands.

9. DETAILS OF HOLDING COMPANY/SUBSIDIARIES/JV:

VXL Instruments Limited (UK), ceased to be a Subsidiary Company pursuant to the winding up petition filed by one of the Creditors and upon the winding up Order passed by the Honble High Court of Justice, Chancery Division, Companies Court (Court) UK under the provisions of the Insolvency Act, 1986 on 7th November, 2016. Further, the Honble High Court has appointed Mr. Alan Simon as the Liquidator of VXL Instruments Limited (UK).

10. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

11. MANAGEMENT DISCUSSION AND ANALYSIS:

As requisite and appropriate Management Discussion and Analysis is covered under this Report itself, a separate note on the same is not being furnished.