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Vakrangee Ltd.

BSE: 511431 Sector: IT
NSE: VAKRANGEE ISIN Code: INE051B01021
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NSE 00:00 | 23 Sep 38.90 -1.35
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OPEN 40.30
PREVIOUS CLOSE 40.20
VOLUME 810632
52-Week high 47.00
52-Week low 23.60
P/E 48.63
Mkt Cap.(Rs cr) 4,121
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 40.30
CLOSE 40.20
VOLUME 810632
52-Week high 47.00
52-Week low 23.60
P/E 48.63
Mkt Cap.(Rs cr) 4,121
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vakrangee Ltd. (VAKRANGEE) - Auditors Report

Company auditors report

To the Members of Vakrangee Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of VAKRANGEELIMITED ("the Company") which comprise the Balance Sheet as at March 312021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics 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 Companies Act 2013 and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our reports.

1. Estimates Involving in Capitalisation of Capital Expenditureand determining their useful lives

(Refer Note 1" Significant Accounting Policies" CriticalAccounting Estimates and Note 4 "Property Plant and Equipment" for details)Company has capitalised additions to Property Plant and Equipment (PPE) mainly relatedto the Automated Teller Machine (ATM) purchased newly from the OEM. Expenditure such asfreight cost and cost to bring the asset to the location and new acquisition cost arecapitalised. Identification and allocation of the related expenditures involves judgementand estimation of future economic benefit. The useful lives of PPE items are based onmanagement's estimates regarding the period during which the asset or its significantcomponents will be used. The estimates are based on historical experiences marketpractice and group decision on technical evaluation of useful lives of the ATM. Capitalexpenditure and new acquisition is not considered to be an area of significant risk forour audit but as it requires considerable time and resource to audit due to its magnitudeit is considered to be a key audit matter.

Principal Audit Procedure

We assessed whether the Company's accounting policy in relation tothe capitalisation of expenditures are in sync and in compliance with IND AS and foundthem to be consistent. We obtained a listing of capital expenditures and major acquisitionduring the year and on a sample basis checked whether the assets were undertaken basedon internal purchase order that had been properly approved by the key person with suchauthority with no material exceptions noted. We inspected a sample of contracts andunderlying invoices to determine whether the classification between capital and operatingexpenditure was appropriate. We noted no material exceptions.

We evaluated whether the useful lives of the component determined andapplied by the management were in line with historical experience group assessment andthe market practice.

We checked whether the depreciation of PPE items was commenced timelyby comparing the date of the reclassification from work in progress to asset in use withthe date of the act of completion of the work. We noted no material exceptions.

Reference to related disclosures

The Company has provided information on the disclosure of the additiondeletion of PPE and depreciation for the year on such addition and existing asset in Note4 of the standalone financial statement.

2. Information Technology environment

We identified the information technology environment as an area offocus in our audit since Vakrangee Limited are dependent on their technology structureboth for the processing of their operations as well as for the reasonable preparation andpresentation of their standalone financial statements.

The Company has technological infrastructure for its businessactivities as well as ongoing plans for the improvement and maintenance of the access ofthe management and change in the pertinent systems and applications the development ofnew programs and automated controls and automated components in the relevant businessprocesses. The Control to authorise control restrict and cancel accesses to technologyenvironment and programme changes are fundamental for mitigating the potential risk offraud or error based on the misuse or improper change in the systems of the Company thusensuring the integrity of the financial information and accounting records.

The Company has an information technology structure which comprisesmore than one technology environment with different processes and segregated controls. Thelack of suitability of the general technology control environment and its dependentcontrols could trigger incorrect processing of critical information for the preparation ofthe standalone financial statements.

Principal Audit Procedure

We evaluated and tested the design and operational effectiveness of thegeneral controls of information system i.e. VKMS of the Company. Although our audit is notfor the purpose of giving an opinion on effectiveness of the information technologycontrols we reviewed the group's framework of governance of IT and the controls onthe management of access to the data the development of and changes in programsgeneration of financial information and other useful data for review of analytical data.

The IT environment and the controls established by management combinedwith the testing of controls including compensating controls which we have appliedprovide us reasonable basis for our reliance in the integrity and reliability of theinformation generated for the preparation of the Company's financial Statements.

3. Expected Credit Loss

As described in Note 2 (B) (xi) (d) of the Standalone financialstatements for the year ended March 31 2021. The management has determined the allowancefor credit losses based on historical loss experience adjusted to reflect the impact ofthe economic conditions. The allowance for credit loss model requires consideration of theeffect of COVID-19 pandemic event on the customers' business operations/ ability topay dues. Based on such analysis the Company has recorded an allowance aggregating to Rs.597.47 lacs as at March 31 2021 considered in Note 7 & 13 of the standalonefinancial statements. We identified allowance for credit losses as a key audit matterbecause the Company exercises significant judgment in calculating the expected creditlosses.

Principal Audit Procedure

We have performed the following procedures:

i. Evaluated the design and implementation including the operatingeffectiveness of the controls over:

• Basis of consideration of the impact of the economic conditions

• Completeness and accuracy of the data used in estimation ofprobability of default

• Computation of the expected credit loss allowance

ii. Carried out inquiries with the management to understand the impactof COVID-19 in terms of identification of distressed customers and evaluation ofrecoverability of dues extension in contractual terms for collections.

iii. Tested the completeness and accuracy of the ageing of accountsreceivable data.

iv. Further in addition to the above process a forward-lookingexpected loss impairment model as prescribed in IND AS 109 "FinancialInstruments" was also applied by the Company. This involves judgment as the expectedcredit losses must reflect information about past events current conditions andforecasts of future conditions.

v. Selected a sample of the customers and

• Verified publicly available credit reports and other informationrelating to the Company's customers to test if the management had correctlyconsidered the adjustments to credit risk.

• Obtained and verified the details of credit period extensiongranted to the customers and developed an expectation of similar extensions across othercustomers of the Company.

vi. Recomputed the expected credit loss allowance considering the abovedetermined input data and compared the amounts so recomputed with the amounts recorded bythe management to determine if there were any material differences individually or in theaggregate.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of other information. The other information comprises the information includedin the Annual Report for example Management Discussion and Analysis Board's Reportincluding Annexures to Board's Report Business Responsibility Report CorporateGovernance and Shareholder's Information but does not include the standalonefinancial statements and our auditor's report thereon. The Annual report is expectedto be made available to us after the date of this our auditor's report.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charges withgovernance.

Management's Responsibilities for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance total comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Management either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the 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 conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of the misstatement in the standalone financialstatement that individually or in aggregate makes it probable that the economic decisionof the reasonably knowledgeable user of the of the financial statement may be influenced.We considered quantitative materiality and qualitative factor in

(i) planning the scope of our audit work and in evaluating the resultof our work and

(ii) evaluate the effects of any identified misstatement in thefinancial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matter communicated with those charge with governance wedetermine those matters that were of most significance in audit of standalone financialstatement of the current period and are therefore the key audit matters. We describe thesematters in our auditor's report unless law and regulation precludes public disclosureabout the matters or when in extremely rare circumstances we determine that the mattersshould 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

1. As required by the Companies (Auditor's Report) Order 2016("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" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. As required by Section 143(3) of the Act based on our audit wereport that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit. (b) In our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Ind AS specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164(2) of the Act.

(f ) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's InternalFinancial Controls over the financial reporting.

(g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of Section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the managerial remuneration paid or provided by the company toits directors during the year is in accordance with the provisions of Section 197 readwith Schedule V to the Act.

(h) With respect to the other matters to be included in theAuditor'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 theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements. Refer Note 39 to the standalonefinancial statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amount required to betransferred to the Investor Education and Protection Fund by the Company.

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of VAKRANGEE LIMITED)

i. FIXED ASSET

a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. b. The Company has a programof verification to cover all the item of fixed assets in a phased manner which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.Pursuant to program certain fixed assets were physically verified by the managementduring the year. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

c. According to the information and explanations given to us therecords examined by us and based on the examination of the conveyance deeds / registeredsale deed provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the Companyas at the balance sheet date. In respect of immovable properties of land and building thathave been taken on lease and disclosed as fixed assets in the standalone financialstatements the lease agreements are in the name of the Company.

ii. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals and no material discrepancies werenoticed on physical verification.

iii. The Company has not granted any loans secured or unsecured tocompanies firm limited liability Partnership or other parties covered in the registermaintained under section 189 of the Companies Act 2013 ("the Act").

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of the Section 185 and 186 ofthe Act in respect to the loans making investment and providing guarantees andsecurities as applicable.

v. According to the information and explanations given to us theCompany has not accepted any deposit during the year. The Company does not have anyunclaimed deposits and therefore the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 are not applicable.

vi. The maintenance of cost records has not been specified by theCentral Government under section 148(1) of the Companies Act 2013 for the businessactivities carried out by the Company. Thus reporting under clause 3(vi) of the order isnot applicable to the Company.

vii. STATUTORY DUES

a. According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted/ accrued in thebooks of account in respect of undisputed statutory dues including provident fundincome-tax sales tax employees' state insurance value added tax goods and servicetax duty of customs service tax cess and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of provident fund income tax sales taxemployees' state insurance value added tax duty of customs service tax goods andservice tax cess and other material statutory dues were in arrears as at March 31 2021for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us there areno dues of duty of customs goods and service tax and Income tax which have not beendeposited with the appropriate authorities on account of any dispute.

viii. In our opinion and according to the information and explanationprovided by the management the Company has not defaulted in repayment of loans orborrowing to the bank Company has not taken any loans and borrowings from financialinstitutions and government or has not issued any debentures. Hence reporting under clause3 (viii) of the Order is not applicable to the Company.

ix. The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) or term loans and hencereporting under clause 3 (ix) of the Order is not applicable to the Company.

x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or no material fraud on the Company byits officers or employees has been noticed or reported during the year.

VAKRANGEE LIMITED

xi. In our opinion and according to the information and explanationsgive to us the managerial remuneration for the year ended March 31 2021 has been paid /provided by the Company to its directors in accordance with the provisions of Section 197read with Schedule V to the Act. xii. In our opinion and according to the information andexplanations given to us the Company is not a Nidhi Company. Accordingly Clause 3(xii)of the Order is not applicable.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with the Section 177 and 188 of the Companies Act 2013 whereapplicable and the details of transactions with the related parties have been disclosed inthe standalone financial statements as required by applicable Indian Accounting Standard.

xiv. According the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year and hence reporting under clause 3 (xiv) of the Order is notapplicable to the Company.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly clause3(xv) of the Order is not applicable. xvi. The Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of VAKRANGEE LIMITED ofeven date)

Report on the Internal Financial Controls over Financial Reporting withreference to the aforesaid Standalone Financial Statements under Clause (i) of Sub-section3 of Section 143 of the Companies Act 2013

We have audited the internal financial controls over financialreporting of VAKRANGEE LIMITED ("the Company") as of March 31 2021 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Standalone Financial Statements whether due tofraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to best of our information and according to theexplanation given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For A.P.Sanzgiri & Co.
Chartered Accountants
FRN : 116293W
Anil Agrawal
Partner
Membership No. 041396
UDIN: 21041396AAAABK3105
Place: Mumbai
Date: : June 19 2021

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