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Prabhu Steel Industries Ltd.

BSE: 506042 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE821R01015
BSE 05:30 | 01 Jan Prabhu Steel Industries Ltd
NSE 05:30 | 01 Jan Prabhu Steel Industries Ltd

Prabhu Steel Industries Ltd. (PRABHUSTEELIND) - Auditors Report

Company auditors report

TO THE MEMBERS OF

PRABHU STEEL INDUSTRIES LIMITED Report on the Financial StatementsOpinion

We have audited the accompanying financial statements of PRABHUSTEEL INDUSTRIES LIMITED (the

"Company") which comprises the Balance Sheet as at March31 2022 the Statement of Profit and Loss (including the Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows and for the year thenended and notes to the financial statements including a summary of significantaccounting 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 theexplanations given to us the aforesaid 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 31 2022 and its profitsincluding total comprehensive income (loss) the changes in equity and its cash flows forthe year ended on that date.

Basis of Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards on Auditing (SAs) are further described in theAuditor?s Responsibilities for the Audit of the 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 ("the ICAI") together with theethical requirements that are relevant to our audit of the financial statements under theprovisions 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 financial statements.

Other Matters

The Company?s Management had received a letter from NationalFinancial Reporting Authority (NFRA) dated April 15 2021 requiring the Company to submitcertain informations/certified copies of documents pertaining to the financial statementsof the Company for the financial year 2019-2020. The Company provided such informationvide its email communication dated June 06 2021. After preliminary examination of thefinancial statements of the Company for the financial year 2019-2020 NFRA had send aquestionnaire dated on October 07 2021. The Company responded the queries raised in thequestionnaires vide email dated on November 22 2021.

Section 132(2)(b) of the Companies Act 2013 stipulate that NFRA shallmonitor and enforce the compliance with the accounting standards and auditing standards insuch manner as may be prescribed. In pursuance to the same NFRA had reviewed thefinancial statements of the Company and had issued a draft of Financial Reporting QualityReview Report (FRQRR) dated on January 08 2022 vide Report No. NF-20011/24/2021/01. Incompliance to the draft report of FRQRR as issued by NFRA and considering the observationand insufficiencies as stated in the FRQRR while preparing and presenting the financialstatements of the Company for the period ended on March 31 2020 the Management of theCompany had revised/restated its financial statements for the period ended on March 312020. Management of the Company had also obtained a revised audit report on therevised/restated financial statements for the period ended March 31 2020. The auditor inthe undated/unsigned revised audit report had reported that;

"We have audited the accompanying the revised/restated financialstatements of the Company which comprises the revised/restated Balance Sheet as at March31 2020 the revised/restated Statement of Profit and Loss (including the OtherComprehensive Income) the revised/restated Statement of Changes in Equity and therevised/restated Statement of Cash Flows and for the year then ended and notes to therevised/restated financial statements including a summary of significant accountingpolicies and other explanatory information. Our opinion on the revised audit report isbased on the revised/ restated financial statements as presented by the

Company."

Management of the Company had submitted the revised/restated financialstatements along with the revised audit report to NFRA on April 25 2022 and as inform tous till the signing of this report the Company had not received any further communicationfrom the NFRA.

We conducted our audit of the financial statements for the financialperiod ended March 31 2022 considering the draft of Financial Reporting Quality ReviewReport (FRQRR) as issued by the NFRA considering the revised/restated FinancialStatements for the period ended on March 31 2020 as submitted by the Management of theCompany to NFAR and while forming opinion on the financial statements for the period endedMarch 31 2022 we have also considered the audit report on the revised/restated financialstatements for the year ended March 31 2020. Management of the Company has alsorevised/restated/regrouped the financial figures for the previous year ended March 312021 on the basis of the revised/restated Financial Statements for the period ended onMarch 31 2020 as submitted to the NFRA. Thus the figures of the previous year i.e yearended March 31 2021 which are forming part of the financial statements of the year endedMarch 31 2022 had also been restated/revised/regrouped.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere 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 awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated to our report.

The Key Audit Matters How was the matter addressed in our Audit
Revenue Recognition
Revenue is one of the key profit drivers and is therefore susceptible to misstatements. Cut-off is the key assertion in so far as revenue recognition is concerned since an inappropriate cut -off can results in material misstatement of results for the years. Our audit procedures with regards to revenue recognition included testing controls automated and manual around dispatches / deliveries inventory reconciliations and circularization of receivable balances substantive testing for cut-off and analytical review procedures.

Appropriateness of Current and Non - Current Classifications

For the purpose of current / non - current classification of the assetsand liabilities the Company has ascertained its normal operating cycle as twelve months.This is based on the nature of services and the time between the acquisition of assets orinventories for processing and their presentation in cash and cash equivalents. Theclassification of assets and liabilities has been done on the basis of documentaryevidences. Where conclusive evidences are not available the classification has been doneon the basis of management?s best estimates of the period in which the assets wouldbe realized or the liabilities would be settled. We have evaluated the reasonability ofthe management?s estimates.

Information Other than the Financial Statements and Auditor?sReport thereon

The Company?s Management and the Board of Directors is responsiblefor the preparation of the other information. The other information comprises theManagement Discussion and Analysis Board?s Report inlcuding Annexures to theBoard?s Report Report on Corporate Governance Business Responsibility Report andShareholder?s information but does not include the consolidated financialstatements standalone financial statements and our auditor?s report thereon.

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

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management?s Responsibility for the Financial Statements

The Company?s Management and the Board of Directors is responsiblefor the matters stated in Section 134(5) of the Companies Act 2013 ("the Act")with respect to the preparation of these financial statements that give a true and fairview of the financial position the financial performance including the othercomprehensive income (loss) cash flows and changes in equity of the Company in accordancewith the accounting principle generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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 presentations of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management and Board ofDirectors is responsible for assessing the

Company?s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company?sfinancial reporting process.

Auditor?s Responsibility for the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial 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 assurance is a high level of assurance but is not aguarantee that an audit conducted in accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial 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 thefinancial 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 internalcontrols.

? Obtain an understanding of internal financial controls relevant tothe 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 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 thereasonableness of accounting estimates and related disclosures made by the Management andBoard of Directors.

? Conclude on the appropriateness of management?s use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany?s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor?s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate 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 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 misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial 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 matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor?s report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would 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 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure "A" a statementon the matters specified in paragraph 3 and paragraph 4 of the said Order.

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 beenkept 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 theOther Comprehensive income the

Statement of Changes in Equity and the Statement of Cash Flows thedealt with by this Report are in agreement with the books of account;

d. In our opinion the Balance Sheet the Statement of Profit and Lossincluding the Other Comprehensive

Income the Statement of Changes in Equity and the Statement of CashFlows comply with the Indian Accounting Standards specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended;

e. On the basis of the written representation received from thedirectors as on March 31 2022 taken on the record by the Board of Directors none ofdirectors is disqualified as on March 31 2022 from being appointed as a director in termof Section 164(2) of the Act.

f. With respect to adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such control referto our separate report in Annexure "B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company?sinternal financial 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 explanationsgiven to us the remunerations paid by the Company to its directors during the reportingperiod is in accordance with the provision of Section 197 of the Act. The remunerationpaid to any director is not in excess of the limit laid down under section 197 of the Act.

h. With respect to the other matters to be included in the IndependentAuditor?s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 itsfinancial position in its financial statements - "Refer Note No. 37".

(ii) The provision has been made in the financial statements asrequired under the applicable law or Indian Accounting Standards for material foreseeablelosses if any on long - term contracts including the derivative contracts.

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

(iv) a) The Management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed fund or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including the foreign entity ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediaries shall whether directlyor indirectly lend or invest in other persons or entities indentified in any mannerwhatsoever by or on behalf of the Company ("Ultimate Beneficiaries") by or onbehalf of the Company or provide any guarantee security or the like to or on behalf ofthe Ultimate Beneficiaries;

b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like from or on behalf of the Ultimate Beneficiaries;

c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub clause (i) and (ii) of Rule 11(e) as providedunder iv(a) and iv(b) above contain any material misstatement.

(v) The Dividend declared and paid if any during the reporting periodby the Company is in compliance with the Section 123 of the Companies Act 2013.

For MANISH N JAIN & CO.

Chartered Accountants

FRN No. 138430W
Place: Nagpur MANISH JAIN
Dated: May 26 2022 Partner
UDIN No.: 22118548AKJBOP1817 Membership No. 118548

ANNEXURE "A" TO THE INDEPENDENT AUDITORS? REPORT

(Referred to in Paragraph 1 under "Report on the Other Legal andRegulatory Requirements" Section of our report of Even Date)

Report on Companies (Auditor?s Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theCompanies Act 2013 (‘the Act?) of PRABHU STEEL INDUSTRIES LIMITED ("theCompany");

1. In respect of the Company?s Property Plants and Equipments andIntangible Assets; a) i) The Company has maintained proper records in the electronic modeshowing full particulars including the quantitative details and situation of propertyplants and equipments and the relevant details of right-of-use of assets.

ii) The Company has maintained the proper records showing fullparticulars of intangible assets.

b) The Company has a regular program at reasonable interval forphysical verification of property plants and equipments and right-of-use of assets so asto cover all the assets the periodicity of physical verification in our opinion isreasonable having regard to the size of the Company and nature of its assets. According tothe information and explanation given to us no material discrepancies were noticed onsuch physical verification.

c) Based on our examination of the property tax receipts and leaseagreement for land on which building is constructed registered sale deed/transferdeed/conveyance deed provided to us we report that the title deeds in respect ofself-constructed buildings and title deeds of all other immovable properties (other thanproperties where the Company is the lessee and the lease agreements are duly executed infavour of the Company) disclosed in the financial statements and included under propertyplants and equipments are held in the name of the Company as at the Balance Sheet date. Inrespect of the immovable properties taken on lease by the Company the lease agreementsare in the name of the Company as at the Balance Sheet date.

d) The Company has not revalued any of its property plants andequipments (including right-of-use assets) and intangible assets during the reportingperiod.

e) According to the information and explanations given to us and on thebasis of our examination of the records of the Company no proceeding have been initiatedduring the reporting period or are pending against the Company as at March 31 2022 forholding any benami property under the Benami Transactions (Prohibition) Act 1988 (asamended in 2016) and Rules made thereunder.

2. In respect of Company?s inventories;

a) As explained to us inventories except goods-in-transits and thestock lying with third parties were physically verified during the year by the managementat reasonable intervals. In our opinion in respect of stock lying with the third partiesat the end of the year written confirmations have been obtained. In our opinion thefrequency of such verification is reasonable. In our opinion the coverage and theprocedure adopted by the management for the physical verification is appropriate lookingto the size and the nature of the products dealt in by the Company. As explained to usthere was no discrepancies of 10% or more in the aggregate of each class of inventory werenoticed on such physical verification of inventories. However the other discrepancies ifany noticed on such physical verification have been properly dealt with in the books ofaccounts.

b) The Company has not been sanctioned working capital limit in excessof five crore rupees in aggregate at any point of time in during the reporting periodfrom banks or financial institutions on the basis of security of current assets. Hence thereporting under the clause 3(ii)(b) of the said Order is not applicable to the Company.

3. The Company has not made any investments in provided any guaranteeor security or granted any loans or advances in the nature of loans secured or unsecuredto companies firms limited liability partnerships or other parties during the year. TheCompany has granted loans to two companies during the reporting period details of thesuch loans are stated in sub-clause (a)(B) below;

a) A) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not providedany loans or advances in the nature of loans or stood guarantee or provided security tosubsidiaries joint ventures and associates hence the reporting under clause 3(iii)(a)(A)of the Order is not applicable. a) B) According to the information and explanations givento us and on the basis of our examination of the records of the Company the Company hasgranted loans or advances in the nature of loans to two of the Companies other thansubsidiaries joint ventures and associates as below;

S. No. Particulars Amount
1. Aggregate amount during the year - Others Rs. 120760
2. Balance Outstanding as at the Balance Sheet Date Other Rs. 4711444

b) In respect of the loans and advances in the nature of loans grantedby the Company we are of the opinion that the terms and conditions of the grant of loansand advances are prima facie not prejudicial to the interest of the Company.

c) In respect of the loans and advances in the nature of loans grantedby the Company the schedule of repayment of principal and payment of interest has beenstipulated and the repayment of principal amounts and receipts of interest are generallybeen regular as per the stipulation.

d) In respect of the loans and advances in the nature of loans grantedby the Company there is no overdue amount remaining outstanding for more than ninety daysas at the balance sheet date.

e) In respect of the loans and advances in the nature of loans no suchloans granted by the Company which has fallen due during the year has been renewed orextended or fresh loans granted to settle the overdues of the existing loans given to thesame parties.

f) The Company has not granted any loans or advances in the nature ofloans either repayable on demand or without specifying any terms or period of repaymentduring the year. Hence the reporting under clause 3(iii)(f) of the Order is notapplicable.

During the reporting period the Company has neither provided guaranteenor security to any entities including subsidiaries joint ventures and associates asapplicable.

4. In our opinion and according to information and explanations givento us and on the basis of our examination of the records the Company has complied withthe provisions of Section 185 and Section 186 of the Act in respect to grant of loansmaking investments and providing guarantees and securities as applicable.

5. The Company has not accepted any deposits from public or amountswhich are deemed to be the deposits of the Company within the meaning of the Reserve Bankof India provision of Section 73 to Section 76 of the Act or any other relevantprovisions and Rules made thereunder during the year therefore the reporting underclause 3(v) of the Order is not applicable to the Company.

6. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as amended prescribed bythe Central Government under section 148(1) of the

Companies Act in respect of the Company?s products/services towhich the said Rules are made applicable and we are of the opinion that prima facie theprescribed cost record been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

7. According to the information and explanations given to us and on thebasis of our examination of the records of the Company in respect of statutory dues wereport that;

a) The Company has generally been regular in depositing undisputedstatutory dues including goods and service tax provident fund employees? stateinsurance income tax duties of custom cess and other material statutory dues applicableto it with the appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of goods and service tax provident fundemployees? state insurance income tax duties of custom cess and other materialstatutory dues were in arrears as at March 31 2022 for a period of more than six monthsfrom the date they became payable.

b) According to the information and explanation given to us there areno material statutory dues referred to in sub-clause

(a) above which have not been deposited with the appropriate authorityon account of any dispute.

8. According to the information and explanation given to us and on thebasis of our examination of the record of the Company there were no transactions relatingto previously unrecorded income that have been surrendered or disclosed as income duringthe year in the tax assessments under the Income Tax Act 1961.

9. a) In our opinion and according to the information and explanationgiven to us by the Company the Company has not defaulted in repayment of any loans orother borrowings or in the payment of interest thereon to any lenders.

b) The Company has not been declared as willful defaulter by banks orfinancial institutions or government or any government authority.

c) The Company has not obtained any term loans during the year hencethe reporting under clause 3(ix)(c) of the said Order is not applicable.

d) According to the information and explanation given to us and on thebasis of our examination of the record of the Company the funds raised on short-termbasis have prima facie not been used during the year for long-term purposes by theCompany.

e) According to the information and explanation given to us and on thebasis of our examination of the record of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures as defined under the Companies Act 2013.Hence the reporting under the clause 3(ix)(e) of the said Order is not applicable to theCompany. f) According to the information and explanation given to us and on the basis ofour examination on the record of the Company we report that the Company has not raisedany loans during the year on the pledge of securities held in its subsidiaries jointventures or associates companies as defined under the Companies Act 2013. Hence thereporting under the clause 3(ix)(f) of the said Order is not applicable to the Company.

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

b) The Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencethe reporting under clause 3(x)(b) of the Order is not applicable to the Company.

11. a) According to the information and explanation given to us and onthe basis of examinations of records of the Company considering the principles ofmateriality outlined in Standards of Auditing we report that no fraud by the Company andno material fraud on the Company by its officers or employees has been noticed or reportedduring the year.

b) According to the information and explanation given to us and on thebasis of examinations of records of the Company we report that no report undersub-section (12) of Section 143 of the Companies Act has been filled in Form ADT-4 asprescribed under Rule 13 of the Companies (Audit and Auditors) Rules 2014 with theCentral Government during the year and upto the date of this report.

c) In our opinion and according to the information and explanationgiven to us the Company has not received any complaints from whistle-blower hence thereporting under clause 3(xi)(c) of the Order is not applicable to the Company.

12. The Company is not a Nidhi Company as prescribed under Section 406of the Companies Act and hence reporting under clause 3(xii) of the Order is notapplicable to the Company.

13. According to information and explanations given to us and based onour examination of the records of the Company all transactions with related parties arein compliance with Section 177 and Section 188 of the Companies Act and details of relatedparty transactions have been disclosed in the financial statements under "NoteNo. 36 - the transactions with Related Parties" as required under IndianAccounting Standards (Ind AS) -

24 "Related Party Disclosure" specified under Section 133 ofthe Act read with Rule 7 of the Companies

(Accounts) Rule 2014.

14. a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.

b) We have considered the internal audit report for the year underaudit issued to the Company during the year and till the date of this report indetermining the nature timing and extent of our audit procedures.

15. In our opinion and according to the information and explanationgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or the person connected with him and hence provisions of Section 192 ofthe Act are not applicable. Thus reporting under clause 3(xv) of the Order is notapplicable to the Company.

16. a) In our opinion the Company is not required to be registeredunder Section 45-IA of the Reserve Bank of India Act 1934 therefore the reporting underclause 3(xvi)(a) and (b) of the Order is not applicable to the Company.

b) In our opinion the Company is not a core investment company (CIC)also there is no CIC within the Group as defined in the regulation made by the ReserveBank of India in Core Investment Companies (Reserve Bank) Directions 2016 and accordinglythe reporting under clause 3(xvi)(c) and (d) of the Order are not applicable.

17. The Company has not incurred any cash losses during the financialyear covered by our audit and in the immediately preceding financial year.

18. There has been resignation of statutory auditor during the year andwe have taken into the consideration the issues objections and concerns rasied by theoutgoing auditor.

19. On the basis of financial ratios aging and expected due dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors and theManagement plans and based on our examination of evidence supporting the assumptionsnothing has come to our attention which cause us to believe that any material uncertaintyexists as on the date of the audit report indicating that Company is not capable ofmeeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date. We however state that this isnot as assurance as to the future viability of the Company. We further state that ourreporting is based on the facts up to the date of the audit report and we neither give anyguarantee nor any assurance that all liabilities falling due within a period of one yearfrom the date of balance sheet will get discharged by the Company as and when they falldue.

20. As per Section 135 of the Companies Act 2013 a company meetingits applicability threshold needs to spend at least 2% of its average net profit for theimmediately preceeding three financial year on Corporate Social Responsibilities (CSR)Activities. The Company does not meet the eligibility criteria as specified under section135 of the Companies Act 2013 hence the reporting under the clause 3(xx)(a) towardsspending on other than ongoing projects and 3(xx)(b) towards spending on ongoing projectson Corporate Social Responsibilities (CSR) of the said order is not applicable to theCompany.

For MANISH N JAIN & CO.

Chartered Accountants

FRN No. 138430W
Place: Nagpur MANISH JAIN
Dated: May 26 2022 Partner
UDIN No.: 22118548AKJBOP1817 Membership No. 118548

ANNEXURE "B" TO THE INDEPENDENT AUDITORS? REPORT

(Referred to in paragraph 2(f) under "Report on the OtherRegulatory Requirements" section of our report of even date)

Report on the Internal Financial Controls over the Financial Reportingunder Clause (i) of sub - section 3 of Section 143 of the Companies Act 2013 ("theAct")

Opinion

We have audited the internal financial controls over the financialreporting of "PRABHU STEEL INDUSTRIES

LIMITED" ("the Company") as of March 31 2022in conjunction with our audit of the financial statements of the Company for the yearended on that date.

In our opinion to the 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 2022 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India ("the ICAI").

Management?s Responsibility for Internal Financial Controls

The Company?s Management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting with reference to the financial statementscriteria 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 ("the ICAI"). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company?s policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditors? Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to the financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls over Financial Reporting with reference to the financialstatements (the "Guidance Note") and Standard of Auditing prescribed underSection 143(10) of the Companies

Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to the financial statements was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting withreference to the financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting with reference to the financialstatements included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors? judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide the basis for our audit opinion on the Company?s internalfinancial controls system over financial reporting with reference to the financialstatements.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting withreference to the financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control over financial reportingwith reference to the financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls over the FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to the financial statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to the financialstatements 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.

For MANISH N JAIN & CO.

Chartered Accountants

FRN No. 138430W
Place: Nagpur MANISH JAIN
Dated: May 26 2022 Partner
UDIN No.: 22118548AKJBOP1817 Membership No. 118548

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