We have audited the financial statements of VL E-Governance
& IT Solutions Limited (formerly known as Vakrangee
Logistics Private Limited) (hereinafter referred to as "the
Company"), which comprise the Balance sheet as at March
31,2025, the Statement of Profit and Loss (including Other
Comprehensive Income), Statement of Cash flows and
Statement of Changes in equity for the year then ended on
that date, and notes to the financial statements, including
a summary of material accounting policies and other
explanatory information (hereinafter referred to as "the
Financial Statements).
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 Companies
Act, 2013 ("the Act”) in the manner so required and give
a true and fair view in conformity with Indian Accounting
Standards prescribed 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, and its loss (including other comprehensive
income), its cash flows and changes in equity 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 Companies Act, 2013. Our responsibilities under
those Standards are further described in the Auditor's
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 ('ICAI') together with the ethical
requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013
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 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 the matters described below to be the key
audit matters to communicate in our report for the year ended
March 31,2025.
1. As described in Note 31 of the financial statements for
the year ended March 31,2025, the management has
determined the allowance for credit losses based on
historical loss experience adjusted to reflect the impact
of the economic conditions. The allowance for credit loss
model requires consideration of the customers' business
operations/ability to pay dues. Based on such analysis
the Company has recorded a significant allowance of
Expected Credit Loss aggregating to ' 2,51,841.28/- lakhs
for the year (compared to ' 37.42 lakhs in the previous
year), which are disclosed in Note 5, 8 and 11 of the
Standalone Financial Statements.
We identified allowance for credit losses as a key audit
matter because the Company exercises significant
judgment in calculating the expected credit losses.
Principal Audit Procedure
Our audit procedures included, but were not limited to, the
following
• Evaluated the design and implementation including
the operating effectiveness of the controls over:
• Basis of consideration of the impact of the economic
conditions;
• Completeness and accuracy of the data used in
estimation of probability of default;
• Computation of the expected credit loss allowance
• Tested the completeness and accuracy of the ageing
of accounts receivable data.
• Further in addition to the above process, a forward¬
looking expected loss impairment model as
prescribed in IND AS 109 "Financial Instruments”
was also applied by the Company. This involves
judgment as the expected credit losses must reflect
information about past events, current conditions,
and forecasts of future conditions.
• Selected a sample of the customers, and
• Verified publicly available information relating to the
Company's customers to test if the management
had correctly considered the adjustments to credit
risk.
• Obtained and verified the details of credit period
extension granted to the customers and developed
an expectation of similar extensions across other
customers of the Company.
2. The Company has incurred losses for the financial year
ended March 31,2025 due to the substantial provisioning
of expected credit loss. As detailed in Note No. 14 and
31 of the financial statements, the Company reported a
net loss of '2,51,841.28 lakhs for the year (compared to
'16,993.15 lakhs in the previous year). These losses have
significantly reduced the Company's net worth and raise
a material uncertainty that may cast significant doubt on
its ability to continue as a going concern.
Management has prepared the financial statements on a
going concern basis, based on its expectations regarding
future operational performance, availability of current
and future funding arrangements and with positive net
worth of ' 4,569.66/- Lakhs. The assessment of the
Company's ability to continue as a going concern involves
significant management judgment and is subject to
inherent uncertainties associated with future economic
and business conditions.
We considered this to be a key audit matter due to the
significance of the matter to the financial statements,
the material uncertainty relating to the going concern
assumption, and the considerable judgment involved in
management's assessment.
Principal Audit Procedure
Our audit procedures included, but were not limited to:
• Evaluating management's assessment of the going
concern assumption, including consideration of the
Company's cash flow projections, funding plans, and
their feasibility;
• Assessing the reasonableness of key assumptions
used in the cash flow forecasts and testing their
mathematical accuracy;
• Considering the terms and conditions of financial
support letters or other funding arrangements from
related parties, lenders, or shareholders;
• Evaluating the adequacy of the disclosures made in
the financial statements regarding the going concern
assumption and related material uncertainty
Based on the audit procedures performed, and
notwithstanding the significant losses incurred and the
substantial reduction of the Company's net worth—which
may raise doubts regarding the Company's ability to
continue as a going concern—management is of the view
that Despite this condition, the Company continues to
demonstrate financial resilience, maintaining positive net
worth amounting to ' 4,569.66/- Lakhs and the use of the
going concern basis of accounting remains appropriate
and , as detailed in Note 31 to the financial statements.
We concur with management's assessment considering
the net assets is more than the total liability of the
company with positive net worth and the use of the going
concern basis of accounting in the preparation of the
financial statements.
Our opinion is not modified in respect of this matter.
INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITORS' REPORT THEREON
The Company's management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Board's Report
including Annexures to Board's Report but does not include the
financial statements and our auditor's 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 during the course of our audit or otherwise appears
to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact. We
have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Companies Act, 2013
with respect to the preparation of these financial statements
that give a true and fair view of the financial position,
financial performance, cash flows and changes in equity
of the Company in accordance with the Ind AS and other
accounting principles generally accepted in India, including
the accounting Standards specified under section 133 of the
Act. 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 implementation
and maintenance of 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
statement 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 is
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 (refer Key Audit Matters and Note no 32 of
Financial Statements) 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 is also responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF 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 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 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 Companies Act, 2013, we are also responsible
for expressing our opinion on whether the company has
adequate internal financial controls system 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 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 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; and
• 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.
Materiality is the magnitude of misstatements in the 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 Financial Statements.
We believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion on the
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 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 the Companies (Auditor's Report) Order,
2020 ("the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the "Annexure A" a
statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and
explanations which 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), the
Statement of Cash Flows and Statement of Changes
in Equity, dealt with by this Report are in agreement
with the books of account.
d) In our opinion, the aforesaid financial statements
comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as
amended.
e) On the basis of the written representations received
from the directors as on March 31,2025 taken
on record by the Board of Directors, none of the
directors are disqualified as on March 31,2025 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 Company's
internal financial controls over financial reporting
g) In our opinion and according to the information
and explanations given to us, the managerial
remuneration for the year ended Mach 31,2025, has
been paid / provided by the Company to its directors
is in accordance with the provisions of Section 197
read with Schedule V to the Act.
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, in
our opinion and to the best of our information and
according to the explanations given to us:
i. The Company does not have any pending
litigations which would impact its financial
position.
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses.
iii. There were no amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company.
iv. (A) The Management has represented that,
to the best of its knowledge and belief,
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;
(B) The Management has represented, that,
to the best of its knowledge and belief, 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
(C) Based on such audit procedures that
we have 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. No dividend has been declared or paid during
the year by the company.
vi. 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. Further, during the
course of our audit we did not come across any
instance of audit trail feature being tampered
with.
For BKG & Associates
Chartered Accountants
Firm Registration No: 114852W
CA G.L. Gupta
Partner
Place : Mumbai Membership No. : 034914
Date : May 26, 2025 UDIN : 25034914BMULEP7144
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