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Vakrangee Ltd.

BSE: 511431 Sector: IT
NSE: VAKRANGEE ISIN Code: INE051B01021
BSE 14:58 | 19 Feb 45.85 0.30
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OPEN 45.50
PREVIOUS CLOSE 45.55
VOLUME 50847
52-Week high 70.95
52-Week low 22.75
P/E 120.66
Mkt Cap.(Rs cr) 4,857
Buy Price 45.75
Buy Qty 3270.00
Sell Price 45.85
Sell Qty 200.00
OPEN 45.50
CLOSE 45.55
VOLUME 50847
52-Week high 70.95
52-Week low 22.75
P/E 120.66
Mkt Cap.(Rs cr) 4,857
Buy Price 45.75
Buy Qty 3270.00
Sell Price 45.85
Sell Qty 200.00

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 VAKRANGEE LIMITED ("theCompany") which comprise the Balance Sheet as at March 312019 and the Statement ofProfit and Loss (including Other Comprehensive Income) Statement of Changes in Equity andStatement of Cash Flows for the year then ended on that date and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") 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 312019 profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the Independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

1. Estimates Involving in Capitalisation of Capital Expenditure and determining theiruseful lives

(Refer Note 1" Significant Accounting Policies" Critical Accounting Estimatesand Note 4 "Property Plant and Equipment" for details)

Company has capitalized items of Property Plant and Equipment (PPE) mainly related tothe Automated Teller Machine (ATM) purchased newly from the OEM. Expenditure such asfreight cost and acquisition cost are capitalized. Identification and allocation of therelated expenditures involves judgement and estimation of future economic benefit.

The useful lives of PPE items are based on management's estimates regarding the periodduring which the asset or its significant components will be used. The estimates are basedon historical experiences market practices and Company's decision on technical evaluationof useful lives of the ATM.

Capital expenditure and new acquisition is not considered to be an area of significantrisk for our audit but as it requires considerable time and resource to audit due to itsmagnitude it is considered to be a key audit matter.

Principal Audit Procedure

We assessed whether the Company's accounting policy in relation to the capitalisationof expenditures are in sync and in compliance with IND AS and found them to be consistent.

We obtained a listing of capital expenditures and major acquisition during the yearand on a sample basis checked whether the assets were undertaken based on internalpurchase order that had been properly approved by the key person with such authority withno material exceptions noted. We inspected a sample of contracts and underlying invoicesto determine whether the classification between capital and operating expenditure wasappropriate. We noted no material exceptions.

We evaluated whether the useful lives of the component determined and applied by themanagement were in line with historical experience Company's assessment and the marketpractice.

We checked whether the depreciation of PPE items was commenced timely by comparing thedate of the reclassification from work in progress to asset in use with the date of theact of completion of the work. We noted no material exceptions.

Reference to related disclosures

The Company has provided information on the disclosure of the addition deletion of PPEand depreciation for the year on such addition and existing asset in Note 4 of theStandalone financial statement.

2. Cash Cash Equivalent Bank Balance and Bank Deposit (Including Margin Money)

Cash cash equivalent Bank Balance and fixed deposit consist of cash in hand Balancewith bank in current accounts and term deposit (current and non-current). The nature andcontractual terms of the financial assets determined the presentation on the balancesheet. We focused on this area as it is material to the standalone financial statementsand area of significant risk for our audit as it requires considerable time and resourceto audit due to its magnitude it is considered to be a key audit matter.

The Company's disclosure about cash cash equivalent and other financial assets areincluded in Note 9 and Note 15 of the Standalone financial statements.

Principal Audit Procedure Balance with Bank in Current Account

We have obtained list of various bank accounts maintained by Company along with theirusages type and closing balance as appearing in the books as of the reporting date. Wereconciled the Bank balances to bank confirmations and items of reconciliation asappearing in the books of accounts. We have independently sought Bank Balance confirmationfrom the respective bank.

Cash in Hand and cash lying in the ATM owned and Operated by Company

We have conducted physical verification on the reporting date and have obtained thedetails of denomination of cash in hand verified. For cash lying in ATM machines owned andoperated by Company we have sought physical cash verification report conducted bymanagement. We have also independently verified on sample basis during our audit periodand the reconciliation has been carried out.

Bank Deposit (Non-current and current)

We have obtained list of Fixed deposit opened by Company and lying in the Bank as onthe reporting date. We have verified Balance appearing in the Books to the Bank Balanceconfirmation provided by management to us. We have also independently sought Fixed DepositBank Balance confirmation on the reporting date from the respective Banks. We have alsoverified interest income against these Fixed deposit booked by the Company with thestatement of fixed deposit provided to us during the audit period.

We have independently sought from the Bank for the Fixed deposit which are lien againstBank guarantee and letter of credit provided to various government departments andvendors.

Our audit procedures included review of the classification of the cash cash equivalentand other financial assets and any restriction on the use of the cash and cash equivalent.

3. Information Technology environment

We identified the information technology environment as an area of focus in our auditsince Vakrangee Limited is dependent on their technology structure both for theprocessing of their operations as well as for the reasonable preparation and presentationof their standalone financial statements.

The Company has technological infrastructure for its business activities as well asongoing plans for the improvement and maintenance of the access of the management andchange in the pertinent systems and applications the development of new programs andautomated controls and automated components in the relevant business processes. TheControl to authorise control restrict and cancel accesses to technology environment andprogramme changes are fundamental for mitigating the potential risk of fraud or errorbased on the misuse or improper change in the systems of the Company thus ensuring theintegrity of the financial information and accounting records.

The Company has an information technology structure which comprises more than onetechnology environment with different processes and segregated controls. The lack ofsuitability of the general technology control environment and its dependent controls couldtrigger incorrect processing of critical information for the preparation of the standalonefinancial statements

Principal Audit Procedure

We evaluated and tested the design and operational effectiveness of the generalcontrols of information system i.e. VKMS of the Company. Although our audit is not for thepurpose of giving an opinion on effectiveness of the information technology controls wereviewed the Company's framework of governance of IT and the controls on the management ofaccess to the data the development of and changes in programs generation of financialinformation and other useful data for review of analytical data.

The IT environment and the controls established by management combined with the testingof controls including compensating controls which we have applied provide us reasonablebasis for our reliance in the integrity and reliability of the information generated forthe preparation of the Company's standalone financial Statements.

4. Assessment of Credit Impairment loss of Financial Assets

The assessment of credit impairment loss is a Key Audit Matter as the Company appliesExpected Credit Loss (ECL) model on the financial assets as defined in the significantaccounting policies given under Note 2 (B) (xi) (d). The value of financial assets on thebalance sheet is significant and there is a high degree of complexity and judgementinvolved for the Company in estimating individual and collective credit impairmentprovisions against these assets.

The Company's models to calculate ECLs are the weighted average of credit losses withthe respective risks of default occurring as the weights being inherently complex andjudgement is applied in determining the correct construct of the models.

There are also a number of key assumptions made by the Company in applying theaccounting standard requirements to the models including the selection and input offorward-looking information.

The ECL model adopted by the management is based on their specific recoverabilityassessment on individual item with reference to the ageing profile historical paymentpattern and the past record of default.

For the purpose of impairment assessment significant judgements and assumptionsincluding the credit risks of customers the timing and amount of realisation of theseassets are required for the identification of impairment events and the determination ofthe impairment charge.

Principal Audit Procedure

We have performed the following procedures in relation to assessment of CreditImpairment loss of Financial Assets:

• Tested the accuracy of ageing of financial assets at year end based on theagreed terms of contract with respective party;

• Assessed the recoverability of the unsettled financial assets on a sample basisthrough our evaluation of management's assessment and latest correspondence withcustomers; and

• Evaluated the assumption used in ECL calculations under various stress scenariosand the process used by management for classification of trade receivables as given inNote 7 & 14 of the standalone financial statements.

We found the key judgements and assumptions used by management in the Credit Impairmentloss assessment of financial assets to be supportable based on the available evidence.

5. Recognition and Measurement of Deferred Tax

The recognition and measurement of deferred tax items requires at the level of the taxentity the complete determination of all differences between the recognition and themeasurement of assets and liabilities in accordance with the respective local taxprovisions and financial reporting in accordance with IND AS as well as the calculation oftax loss carry forward. This requires the significant calculation on account of carryforward of losses Mat Credit entitlement and identification of temporary and deductibledifferences. Furthermore the assessment of the ability to use deferred tax assets isbased on the expectations of the management regarding the Company's economic developmentwhich is influenced by the current market environment and the assessment of future marketdevelopment (Domestic and Overseas) and thus requires the use of judgment.

Deferred Tax disclosed in Note 10 of the Standalone Financial Statement of Company foryear ended include Deferred tax asset created on temporary deductible difference of Rs520.74 lacs. In light of this the recognition and measurement of deferred taxes was a keyaudit matter.

Principal Audit Procedure

In assessing the recognition and measurement of deferred taxes for the Company amongother procedures we analyzed the underlying processes for the complete capture andmeasurement of deferred taxes and examined the controls implemented to prevent or detectand correct errors.

Current tax laws allow to carry forward unused tax loss and unused tax credit for 8assessment years and 15 assessment years respectively from the assessment year in whichsuch tax loss/tax credit was incurred.

We examined on a sample basis the identification and quantification of differencesbetween the recognition and measurement of assets and liabilities according to taxregulations and financial reporting pursuant to IND AS. We also reperformed thecalculation of deferred taxes checking that the correct tax rate was applied (EnactedIncome Tax Rate-for FY 19-20 since the asset going to be realised in future period: Para47 of IND AS 12). We compared the tax plans with the Company's budget on a sample basis interms of the recoverability of deferred tax assets from temporary differences and fromunused tax credit. We have also assessed critically whether the sales and taxable profitbefore tax loss adjustment forecast are reasonable in relation to historical trendscurrent year performance and plans. We have also focused on adequacy of the Company'sdisclosures on deferred income tax positions and assumption used.

Our audit procedures did not lead to any reservations regarding the recognition andmeasurement of deferred taxes.

Reference to related disclosures

The Company has provided information on the recognition and measurement of deferredtaxes in the Note 10 and under Note 47(c) of the standalone financial statements.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Annualreport for example Management Discussion and Analysis

Board's Report including Annexures to Board's Report

Business Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon. TheAnnual report is expected to be made available to us after the date of this our auditor'sreport.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Management's Responsibilities for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Management either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of the misstatement in the standalone financial statementthat individually or in aggregate makes it probable that the economic decision of thereasonably knowledgeable user of the financial statement may be influenced. We consideredquantitative materiality and qualitative factor in (i) planning the scope of our auditwork and in evaluating the result of our work and (ii) evaluate the effects of anyidentified misstatement in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matter communicated with those charge with governance we determine thosematters that were of most significance in audit of standalone financial statement of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law and regulation precludes public disclosure about the mattersor when in extremely rare circumstances we determine that the matters should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order

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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

(e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's Internal Financial Controls overthe financial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended:

According to the information and explanations given to us the Company paidremuneration amounting of Rs 470.53 lacs to its Executive Directors. As the Company didnot have adequate profits in the financial year ended March 31 2019 the remunerationpaid in excess of limits specified under section 197 of Act read with Schedule V theretothe Company is in the process of complying with statutory requirement prescribed toregularize such excess payments including seeking approval of shareholders as necessary.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

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

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amount required to be transferred to theInvestor Education and Protection Fund by the Company.

For A.P.Sanzgiri & Co.
Chartered Accountants
FRN : 116293W
Ankush Goyal
Partner
Membership No.146017
Place: Mumbai
Date: May 10 2019

Annexure "A" to the Independent Auditor's Report

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

i. FIXED ASSET

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The Company has a program of verification to cover all the item of fixed assets in aphased manner which in our opinion is reasonable having regard to the size of theCompany and nature of its assets. Pursuant to program certain fixed assets werephysically verified by the management during the year. According to the information andexplanation given to us no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as fixed assets in the standalone financial statements the leaseagreements are in the name of the Company.

ii. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

iii. The Company has not granted any loans secured or unsecured to companies firmlimited liability Partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013 ("the Act")

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of the Section 185 and 186 of the Act in respectto the loans making investment and providing guarantees and securities as applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposit during the year. The Company does not have any unclaimed deposits andtherefore the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 are not applicable.

vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.

vii. STATUTORY DUES

a. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxsales tax employees' state insurance value added tax goods and service tax duty ofcustoms service tax cess and other material statutory dues have been regularly depositedduring the year by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax employees' state insurancevalue added tax duty of customs service tax goods and service tax cess and othermaterial statutory dues were in arrears as at March 31 2019 for a period of more than sixmonths from the date they became payable.

b. According to the information and explanations given to us there are no dues of dutyof customs goods and service tax and Income tax which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of Service Tax and Value added Tax have notbeen deposited by the Company on account of disputes:

Name of the statute F.Y. to which the matter pertains Amount in (Rs lakhs*(1) Forum where the dispute is pending
The Finance Act 1994 2009-2013 144.47 Customs Excise and Service Tax Appellate Tribunal
Maharashtra Value Added Tax Act 2002 2011-12 444.47 Joint Commissioner of Sales Tax (Appeals)

* (1) Net of Amount paid under Protest.

viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting 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 and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations give to us theCompany paid remuneration amounting of ' 470.53 lacs to its Executive Directors. As theCompany did not have adequate profits in the financial year ended March 312019 theremuneration paid in excess of limits specified under section 197 of Act read withSchedule V thereto the Company is in the process of complying with statutory requirementprescribed to regularize such excess payments including seeking approval of shareholdersas necessary.

xii. In our opinion and according to the information and explanations given to us theCompany 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 and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the Section 177 and 188 of the Companies Act 2013 where applicable andthe details of transactions with the related parties have been disclosed in the standalonefinancial statements as required by applicable Indian Accounting Standard.

xiv. According the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year and hence reporting under clause 3 (xiv) of the Order is not applicable to theCompany.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For A.P.Sanzgiri & Co.
Chartered Accountants
FRN : 116293W
Ankush Goyal
Partner
Membership No.146017
Place: Mumbai
Date: May 10 2019

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of VAKRANGEE LIMITED of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VAKRANGEELIMITED ("the Company") as of March 312019 in conjunction with our audit of theStandalone Financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India ('ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to best of our information and according to the explanation given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For A.P.Sanzgiri & Co.
Chartered Accountants
FRN : 116293W
Ankush Goyal
Partner
Membership No.146017
Place: Mumbai
Date: May 10 2019