INDEPENDENT AUDITOR’S REPORT
To,
THE MEMBERS OF PRAKASH INDUSTRIES LIMITED
Report on the Audit of the Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of Prakash Industries Limited (“the Company”), which comprise the
Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement
of Changes in Equity and the Statement of Cash Flows for the year on that date and a summary of the significant 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, except for the effects of the
matter(s) described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the true
and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company
as at March 31, 2023, the profit and total other comprehensive income, changes in equity and its cash flows for the year
ended on that date.
Basis for Qualified Opinion
Note 34 to the financial statement, wherein the deferred tax liability of ' 2,905 lakhs for the year ended on March 31, 2023
has been adjusted against Security Premium Account in terms of a court order. Had the deferred tax been accounted for
pursuant to the Ind AS-12 'Income Taxes', net profit and total comprehensive income after tax for the year ended on March
31, 2023 would have been lower by ' 2,905 lakhs.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section
143(10) of the Act (SAs). 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 independence requirements
that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and
we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on
the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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. In addition to the
matter described in the Basis for Qualified Opinion section we have determined the matters described below to be the key
audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises
the information included in the Management Discussion and Analysis, Board's Report including its Annexures, Business
Responsibility Report, Corporate Governance and Shareholder's Information, 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.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these financial statements that give a true and fair view of the financial position, financial performance,
total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other
accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Board of Directors 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
unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
Those Board of Directors are 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 scepticism 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 financial controls relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for 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.
- 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 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 the 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
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 paragraph 3 and 4 of the order, to the extent applicable.
As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and except for the matter described under “Basis for Qualified Opinion” paragraph, obtained all the
information and explanations which to the best of our knowledge and belief were necessary for the purposes of our
audit.
b) Except for the effects of the matter described in the “Basis for Qualified Opinion” paragraph, 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, Statement of Changes
in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of
account.
d) In our opinion, except for the effects of the matters described in the “Basis for Qualified Opinion” paragraph, the
aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on March 31, 2023 taken on the record by the
Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in
terms of section 164(2) of the Act.
f) The qualification relating to the maintenance of account other matter connected there with are as stated in the “Basis
for Qualified Opinion” paragraph.
g) 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 modified opinion
on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
h) In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid
during the current year by the company to directors is in accordance with the provisions of section 197 of the Act.
i) With respect to the other matter to be included in the Auditor's Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us:
i The company has disclosed the impact of pending litigations on its financial position in its financial statements,
(Refer note no. 31)
ii. Except for the matter described under “Basis for Qualified Opinion” paragraph, the Company has made provision,
as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term
contracts including derivative contracts.
iii. There has been no delay in transferring amount required to be transferred, to the Investor Education and Protection
Fund by the Company during the year.
iv. a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the
notes to the accounts, 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 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 (a) and (b) contain
any material misstatement.
v. The Company has not declared and paid any dividend during the year hence compliance with Section 123 of the Act
is not required.
For Chaturvedi & Co.
Chartered Accountants
Firm Registration No. 302137E
Pankaj Chaturvedi
Partner
Place : New Delhi Membership No. 091239
Date : 16th May, 2023 UDIN:23091239BGWETD5220
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