To the Members of Aksh Optifibre Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements of Aksh Optifibre Limited (the ‘Company'), which comprise the Standalone Balance Sheet as at March 31, 2025, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended on that date and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the ‘Act') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS') specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended (Ind AS) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its loss (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
We draw your attention to Note 42 (i) of the standalone financial statements, which states that during the year, the Company has accounted for non-cenvatable duty liability amounting to Rs. 499.72 lakhs under the Advance Authorization and Export Promotion Capital Goods (EPCG) schemes, due to non-fulfilment of the export obligations. However, no provision has been considered for interest aggregating Rs. 1,552.48 lakhs and for cenvatable duty aggregating to Rs 648.36 lakhs under the said scheme.
Additionally, the Company has not accounted for duty liabilities under the Advance Authorization scheme in respect of cases where export obligations have been technically fulfilled but the corresponding export proceeds have remained unrealized over an extended period. Due to the non-realization of a substantial portion of these proceeds, the Company is exposed to a potential unrecognized liability amounting to Rs.632 lakhs, including duty and interest.
Management believes that these outstanding liabilities are expected to be resolved under the Government's amnesty scheme on a principal duty basis. Accordingly, these amounts have not been recognized in the financial statements but have been disclosed as contingent liabilities in the notes to accounts, pending resolution under the amnesty framework.
However, as per Ind AS 37, a provision should be recognized when there is a present obligation, an outflow of resources is probable, and the amount can be reliably estimated. However, no such provision has been recognized in the books of account.
Had these liabilities been recognized, the total liabilities would have increased by Rs. 2,832.85 lakhs, the total assets would have increased by Rs. 840.19 lakhs, and the loss for the year would have increased by Rs. 1,992.66 lakhs accordingly.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the standalone 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 (‘ICAI') together with the ethical requirements that are relevant to our audit of the consolidated 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 ICAI's Code of Ethics.
Emphasis of Matter
We draw your attention to the notes to the standalone financial statements;
a) Note 48 regarding, the Company has foreign currency payable and receivable balances which are outstanding for more than the period as prescribed in Foreign Exchange Management Act. As on the date of signing of financial statement, the Company has applied for necessary extension in consultation with RBI Consultant. Management does not expect any material implication on account of delays under the existing regulations.
The total amount of foreign currency payable aggregating to Rs 26.42 lakhs and Rs 1,650.79 lakhs which are outstanding for more than six months and three years respectively, and foreign currency receivable balances aggregating to Rs 4,438.26 lakhs which are outstanding for more than nine months, as of March 31, 2025.
b) Note 49B regarding, pursuant to the Notice received by the Company under section 13(4) of SARFAESI Act, 2002, the company has filed Securitization Application (SA) before Debt Recovery Tribunal (DRT), Jaipur. The Hon'ble Tribunal has granted Interim stay to the company and has listed the matter for further adjudication.
c) Note 49C regarding, HDFC Bank Limited, vide its letter dated October 16, 2024, has approved the One-Time Settlement (‘OTS') offer made by the Company, under which the company is required to pay Rs. 2,559.78 lakhs as full and final settlement against the outstanding dues on or before January 7, 2025. In compliance with the above said OTS, the Company has part complied with the terms and has sought extension which is under consideration by the HDFC Bank.
Our opinion is not modified in respect of above-mentioned points.
Key Audit Matters
Key audit matters (‘KAM') are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Opinion we have determined below to be the Key audit matters to be communicated in our report
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S.No.
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Key Audit Matter
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Auditor’s Response
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1.
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Litigations - Contingencies
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As described in Note 42 (ii) Pursuant to an order passed by the Collector of Stamps, Jaipur dated October 4, 2023, a demand of Rs. 3,068.85 lakhs, along with surcharge, interest, and penalty, was raised in connection with the amalgamation of APAksh Broadband Limited against which the Company had paid Rs 120 lakhs in protest. Pursuant to recent amendments to the provisions of the Rajasthan Stamp Act, the stamp duty was duly recalculated to be Rs 0.13 lakhs, which the Company has since paid. The protest money of Rs. 120.00 lakhs continue to be carried as a recoverable amount in the Company's books based on the legal opinion received from the consultant.
This matter has been considered a key audit matter due to the materiality of the amount involved and the significant judgment required in assessing the recoverability of the deposit.
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We identified the assessment of recoverability of the protest money amounting to Rs. 120 lakhs as a key audit matter due to the materiality of the amount involved and the significant judgment required in evaluating the likelihood of its recovery.
In view of the significance of the matter, our procedures included, but were not limited to, the following:
(i) We obtained and reviewed the original demand order dated October 4, 2023, issued by the Collector of Stamps, Jaipur, and the amended demand order subsequently issued by the Deputy Inspector General, Registration and Stamps, Jaipur.
(ii) We reviewed the petition filed by the Company before the Hon'ble High Court and examined related correspondence with the regulatory authorities.
(iii) We obtained a written representation from management confirming the current status of the legal proceedings and their view on the recoverability of the protest deposit.
(iv) We reviewed a legal opinion obtained by the Company from an external legal consultant, which supported management's position on the recoverability of the amount.
(v) We assessed the Company's accounting treatment of the Rs. 120 lakhs as a recoverable amount in light of the pending disposal of the matter and supporting documentation.
(vi) We evaluated the appropriateness and completeness of the disclosures made in the standalone financial statements with respect to this matter.
Based on the audit evidence obtained, including legal documentation and the legal expert's opinion, we found management's assessment of the recoverability of the protest deposit to be reasonable and the related disclosures to be adequate in the context of the applicable financial reporting framework.
As a result of the above audit procedures, the management's assessment of provision for contingencies was considered to be appropriate.
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2.
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Reassessment and Reclassification of Outstanding Liability Payable to Union Bank of India
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As described in Note 49A to the standalone financial statements, the Company has undertaken a reassessment of its outstanding liability payable to Union Bank of India (UBI) during the year, based on an independent evaluation carried out by an external professional firm. The reassessment followed the principle that repayments are first appropriated towards accrued interest and thereafter towards principal, giving priority to borrowings carrying higher interest rates.
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We identified the reassessment and reclassification of the outstanding liability to Union Bank of India as a key audit matter due to the material nature of the adjustment, the exercise of management judgment in applying the repayment appropriation principle, and the involvement of an external expert.
In view of the significance of the matter, our procedures included, but were not limited to, the following:
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S.No.
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Key Audit Matter
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Auditor’s Response
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Based on this evaluation, the Company has reclassified its borrowings and accrued interest liabilities effective from March 31, 2021, the date on which the account was classified as a NonPerforming Asset (NPA). As a result of this reclassification:
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(i)
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Evaluated the competence, capabilities, and objectivity of the external professional firm engaged by the Company to carry out the-reassessment;
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(i) A reduction in interest expense amounting to Rs 1,612.29 lakhs (up to March 31, 2024) has been recognized under Exceptional Income/(Expense); and
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(ii)
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Reviewed the methodology and assumptions used in the reassessment, particularly the principle of prioritizing interest repayment-over-principal;
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(ii) A reduction in interest expense of Rs. 487.17 lakhs for the year ended March 31, 2025 has been recognized under Finance-cost.
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(iii)
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Verified the mathematical accuracy of the reclassification workings and checked the consistency of application of the methodology-across-periods;
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Consequently, the outstanding balance payable to UBI as per the books of the Company differs from the balance as per the bank’s records.
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(iv)
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Compared the revised liability position with original loan agreements, repayment schedules, and relevant bank statements;
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This matter has been considered a key audit matter due to the materiality of the amount involved, the application of significant management judgment, the use of an external expert, and the resulting variance with the lender’s records.
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(v) Obtained and reviewed bank confirmations and correspondence to understand the nature and extent of the difference between the Company’s books and bank records;
(vi) Assessed the appropriateness of the accounting treatment and related disclosures made in the financial statements.
Based on the audit procedures performed and the evidence obtained, we found the reassessment and related disclosures to be reasonable and in line with the applicable financial reporting framework.
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Information other than the Standalone Financial Statements and Auditor’s Report thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Management’s Responsibility for the Standalone Financial Statements
The Company’s management and Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) . This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company’s 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. The Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 Standards on Auditing 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 standalone financial statements.
As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
i. Identify and assess the risks of material misstatement of the standalone 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.
ii. Obtain an understanding of internal financial 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 explaining our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
iv. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone 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 auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
v. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's 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 Section 197(16) of the Act, we report that the Company has not paid any remuneration to its director during the year, hence provisions and limits laid down under Section 197 read with Schedule V to the Act are not applicable.
2) 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 give in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
3) Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the 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 except for the matters stated in the paragraph 3(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Standalone Statement of Cash Flow and the Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Indian accounting standards (Ind AS) specified under Section 133 of the Act.
e) On the basis of the written representations received from the director as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act.
f) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 3(b) above on reporting under Section 143(3)(b) of the Act and paragraph 3h(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g) With respect to the adequacy of the internal financial controls 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 company's internal financial controls over financial reporting.
h) With respect to the other matters to be included in the Auditor's Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and 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 financial position in the standalone financial statements- Refer note no 42 of the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2025;
iv. (a) The Management has represented that,
to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity ("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;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. During the year the Company has not declared or paid dividend under section 123 of the Companies Act, 2013.
vi. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from April 1, 2023.
Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except, the audit trail (edit log) facility was not enabled in the software used for maintaining the books of account relating to payroll.
Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
For P. C. Bindal & Co.
Chartered Accountants Firm Registration Number :003824N
CA K. C. Gupta
Partner
Place: New Delhi Membership no.: 088638
Date: 22-05-2025 UDIN: 25088638BMJHXQ7624
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