We have audited the attached Balance Sheet of Vakrangee Softwares
Limited as at March 31, 2012, the Profit and Loss Account and the Cash
Flow Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Company''s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
1. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are prepared, in all material respects, in
accordance with an identified financial reporting framework and are
free of material misstatement. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditor''s Report) Order, 2003 and
amendments thereto issued by the Central Government of India in terms
of Section 227(4A) of the Companies Act, 1956, we annex hereto a
statement on the matters specified in the paragraphs 4 and 5 of the
3. Further to our comments in the Annexure referred to in paragraph 2
above, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion, proper books of accounts as required by law have
been kept by the Company as it appears from our examination of those
c) The said Balance Sheet, the Profit & Loss Account and the Cash Flow
statement dealt with by this report are in agreement with the books of
d) In our opinion and to the best of our information and according to
the explanations given to us, the said Balance Sheet and Profit and
Loss Account comply with the Accounting Standards referred to in
Section 211(3C) of the Companies Act, 1956.
e) On the basis of written representations received from the directors
as on March 31, 2012 and taken on record by the Board, we report that
none of the directors is disqualified as on March 31, 2012 from being
appointed as a director in terms of clause (g) of subsection (1) of
section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with
notes appearing thereon, give the information required by the Companies
Act, 1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012,
ii) In the case of the Profit and Loss Account, of the profit for the
year ended on that date.
iii) In the case of Cash Flow Statement, of the Cash Flows of the
company for the year ended on that date.
Annexure referred to in Paragraph 2 of the Auditor''s Report to the
members of Vakrangee Softwares Limited for the year ended March 31,
As required by the Companies (Auditor''s Report) Order, 2003 and
amendments thereto and according to the information and explanations
given to us during the course of the audit and on the basis of such
checks of the books and records as were considered appropriate we
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situations of fixed
b) All the assets have been physically verified by the management in
accordance with a phased programme of verification, which in our
opinion is reasonable, considering the size of the company and the
nature of business. The frequency of verification is reasonable and no
material discrepancies have been noticed on such physical verification.
c) During the year, there is no substantial disposal of Fixed Assets.
(ii) a) The inventories have been physically verified by the management
during the year at reasonable intervals.
b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
c) The Company has maintained proper records of inventories. The
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
(iii)a) The Company has granted unsecured loans to nine parties
including four subsidiary companies covered in the register maintained
under Section 301 of the Companies Act, 1956 on call basis. The
maximum amount outstanding during the year was Rs.2,400.09 lacs and the
year-end balance was Rs.1,420.77 lacs.
b) Interest is charged on all the said loans except in case of
Vakrangee Lactus & Hortus Pvt. Ltd. Other terms and conditions on which
the loans have been granted are prima facie, not prejudicial to the
interest of the Company.
c) According to information provided to us, the repayment of said loans
d) The Company has taken unsecured loans from Vakrangee Capital Pvt.
Ltd. and Vakrangee Holdings Pvt. Ltd. covered in the register
maintained under Section 301 of the Companies Act, 1956 on call basis.
The maximum amount outstanding during the year was Rs.1,443.25 lacs and
the year-end balance was Rs.943.25 lacs.
e) The said loans are interest-free loans. Other terms and conditions
on which the loans have been taken are prima facie, not prejudicial to
the interest of the Company.
f) According to information provided to us, there is no default in
repayment of said loans.
(iv) In our opinion and according to the information and explanation
given to us there is adequate internal control system commensurate with
the size of the company and the nature of its business with regard to
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
(v) a) Based on the audit procedures performed by us, we are of the
opinion that particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in the register required to be
maintained in that section.
b) The transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) The Company has not accepted any public deposit.
(vii) The Company has an adequate internal audit system commensurate
with the size and nature of its business.
(viii) The Central Government has not prescribed for maintenance of
cost records under Section 209 (1) (d) of the Companies Act, 1956 for
(ix) a) According to the records of the Company, the undisputed
statutory dues including Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty and Excise Duty, Cess have regularly been deposited
with the appropriate authorities. There are no significant undisputed
amount payable in respect of such statutory dues which have remained
outstanding as at March 31, 2012 for a period more than six months from
the date they became payable.
b) According to the records of the company and information and
explanations given to us, there are no dues of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess which have
not been deposited on account of any dispute.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses during the financial year and
in the immediately preceding financial year.
(xi) The Company has not defaulted in repayment of its dues to banks
and financial institutions.
(xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
(xiii) The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund/ Societies are not applicable to the
(xiv) In respect of dealing in shares, securities and other
investments, in our opinion and according to the information and
explanations given to us, proper records have been maintained of the
transactions and contracts and timely entries have been made therein.
The shares, securities and other investments have been held by the
company in its own name.
(xv) The Company has not given any guarantee for loans taken by others
from banks and financial institutions except guarantee given in respect
of loan granted to Vakrangee e-Solutions Inc., a subsidiary company, by
Barclays Bank Plc. The outstanding amount of loan as on March 31, 2012
(xvi) The Company has taken Term Loans during the year and has applied
the loans for the purposes for which they were obtained.
(xvii) On an overall examination of the balance sheet of the Company,
we report that no funds raised on short-term basis have been used for
long term investments.
(xviii) The Company has made preferential allotment of equity shares
against share warrants issued in the previous year(s) to the parties
covered in the register maintained under section 301 of the Companies
Act, 1956. The same has been made in conformity with the guidelines
issued by the Securities and Exchange Board of India relating to such
preferential allotment and the basis of said allotment is not
prejudicial to the interest of the company.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, we have not come across any instance of
material fraud on or by the Company, noticed or reported during the
For S. K. Patodia & Associates
FRN : 112723W
Mem. No. : 045489
Place : Mumbai
Date : April 26, 2012