To The Members of Pradhin Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Pradhin Limited("the Company") which comprise the Balance Sheet as at March 312022 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the st andalone 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 312022 the Profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). 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 matters
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.
Provisions and contingent liabilities relating to taxation and litigations
See note 30 and 34 to the standalone financial statements
The provisions and contingent liabilities relate to ongoing litigations and claims withvarious authorities and third parties. These relate to direct tax and general legalproceedings arising in the regular course of business.
As at the year ended 31 March 2022 the amounts involved are significant. Thecomputation of a provision or contingent liability requires significant judgement by theCompany. because of the inherent complexity in estimating future costs. The amountrecognised as a provision is the best estimate of the expenditure. The provisions andcontingent liabilities are subject to changes in the outcomes of litigations and thepositions taken by the Company. It involves significant judgement and estimation todetermine the likelihood and timing of the cash outflows and interpretations of the legalaspects tax legislations and judgements previously made by authorities.
How the matter was addressed in our audit
Our audit procedures included:
Understanding the process followed by the Company for assessment anddetermination of the amount of provisions and contingent liabilities relating to taxationand litigations.
Evaluating the design and implementation and testing operating effectiveness ofkey internal controls around the recognition and measurement of provisions andreassessment of contingent liabilities.
Involving our tax professionals with specialized skills and knowledge to assistin the assessment of the value of significant provisions and contingent liabilitiesrelating to taxation matter on sample basis in light of the nature of the exposuresapplicable regulations and related correspondence with the authorities.
Inquiring the status in respect of significant provisions and contingentliabilities with the Company's internal tax and legal team including challenging theassumptions and critical judgements made by the Company which impacted the computation ofthe provisions and inspecting the computation.
Information Other than the Standalone Financial Statements and Auditors ReportThereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the director's report but does not includethe standalone financial statements and our auditor's report thereon. The Director'sreport is expected to be made available to us after the date of this auditor's report.
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 during the course of our audit or otherwiseappears to be materially misstated.
When we read director's report if we conclude that there is a material misstateme nttherein we are required to communicate the matter to those charged with governance.
Managements Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Ac t with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements 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 unlessmanagement 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.
Auditors 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements 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 matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter 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 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 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 overfinancial 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. In our opinionand to the best of our information and according to the explanations given to us theCompany has not paid any managerial remuneration to its directors during the year.
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 standalone financial statements. Refer Note No.34 to the FinancialStatements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to Investor Educationand Protection Fund.
iv. (a) The Management has represented that to the best of it's knowledge and beliefother than as disclosed in the notes to the accounts no funds (which are material eitherindividually or in the aggregate) have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person or entity including foreign entities ("Intermediaries")with the understanding whether recorded in writing or otherwise that the Intermediaryshall directly or indirectly lend or invest in other persons or entities identified inany 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 it's knowledge and beliefother than as disclosed in the notes to the accounts no funds (which are material eitherindividually or in the aggregate) have been received by the Company from any person orentity including foreign entities ("Funding Parties") with the understandingwhether recorded in writing or otherwise that the Company shall directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11 (e) as provided under (a)and (b) above contain any material misstatement.
v. The company has not declared or paid any dividend during the year and has notproposed final dividend for the year.
Annexure A to Auditors Report
The Annexure referred to in our Independent Auditors Report to the members of thecompany on the financial statements for the year ended 31st March 2022 wereport that:
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanation given to us and the books of accounts and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (A) The company is maintaining proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment;
(B) The company does not own any intangible assets as such this clause is notapplicable.
(b) As explained to us the Property Plant and Equipment have been physically verifiedby the management at reasonable intervals. However we have not been provided withphysical verification sheets as such we are unable to report whether any materialdiscrepancies were noticed on such verification and whether the same have been properlydealt with in the books of account;
(c) The company does not own any immovable properties (other than properties where thecompany is the lessee and the lease agreements are duly executed in favour of the lessee).As such this clause is not applicable.
(d) The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or intangible assets or both during the year as such this clause is notapplicable.
(e) To the best of our knowledge and according to the information and explanationsgiven to us neither any proceedings have been initiated nor are pending against thecompany for holding any benami property under the Benami Transactions (Prohibition) Act1988 (45 of 1988) and rules made thereunder.
(ii) As informed the physical verification of inventory has been conducted atreasonable intervals by the management. Considering the size of the company coverage ofsuch verification seems to be appropriate. We have not been shared with the procedure ofsuch verification and the physical verification sheets as such we are unable to commenton whether the procedure of such verification by the management is appropriate and whetherany discrepancies of 10% or more in the aggregate for each class of inventory were noticedand whether they have been properly dealt with in the books of accounts.
(b) The company has not been sanctioned working capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets as such this clause is not applicable.
(iii) (a) As per information provided the company has not made investments in norprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnerships or anyother parties.
. Hence clauses (b) (c) (d) (e ) and (f) are not applicable.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of in respect of loans investments guarantees and security.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of sections 73 to 76 or any other relevant provisions of theAct and the rules farmed there under. Accordingly paragraph 3 (v) of the order is notapplicable to the company. According to the information and explanation given to us noorder has been passed by Company Law Board or National Company Law Tribunal or ReserveBank of India or any court or any other tribunal.
(vi) The maintenance of cost records under sub -section (1) of section 148 of theCompanies Act are not applicable to the company.
(vii) (a) According to the records of the company the company is regular in depositingundisputed statutory dues including Goods and Services Tax provident fund employees'state insurance income-tax sales-tax service tax duty of customs duty of excisevalue added tax cess and any other statutory dues to the extent applicable to theappropriate authorities.
(b) According to the information and explanation provided to us no undisputedstatutory dues referred to in sub - clause (a) are payable to authorities on account ofany dispute except mentioned hereunder:
|Name of the Statute ||Nature of the Dues ||Amount (Rs in Thousand) ||Period to which the amount relates ||Forum where dispute is pending ||Remarks if any |
|Income Tax ||Addition to income & Disallowance of expenditure ||539 ||A.Y 201819 ||Commissioner of Income Tax (Appeals) ||Provision of tax not made in the books of accounts |
(viii) According to the information and explanation provided to us there are notransactions that are not recorded in the books of account have been surrendered ordisclosed as income during the year in the tax assessmentsunder the Income Tax Act 1961(43 of 1961).
(ix) Loans amounting to Rs. 354 Thousand taken from directors of the company arerepayable on demand and terms and conditions for payment of interest thereon have not beenstipulated. According to information and explanation given to us such loans and interestthereon have not been demanded for repayment during the year under audit.
(b)According to the information and explanation given to us and on the basis of ouraudit procedures we report that the company has not taken any loan from Bank or FinancialInstitution or other lender hence clause 3(ix) (b) (c) and (d) are not applicable to thecompany.
(e) The company does not have any subsidiaries joint ventures or associate companieshence clause 3(ix) (e ) and (f) is not applicable to it.
(x) (a) In our opinion and according to the explanations and information given to usthe company did not raise money by way of initial public offer or further public offerincluding debt instrument during the year.
(b) In our opinion and according to the explanations and information given to us thecompany has not made any preferential allotment or private placement of shares orconvertible debentures (fully partially or optionally convertible) during the year.
(xi) (a) To the best of our knowledge and according to the information and explanationgiven to us no fraud by the company and no fraud on the company has been noticed orreported during the year.
(b) No report under sub -section (12) of section 143 of the Companies Act has beenfiled by the auditors in Form ADT -4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government;
(c) As represented to us by the Management there are no whistle-blower complaintsreceived by the company during the year.
(xii) The company is not a Nidhi Company hence reporting under clause 3 (xii) is notapplicable.
(xiii) In our opinion and according to the explanations and information given to usthe company is in compliance with sections 177 and 188 of Companies Act where applicablefor all transactions with the related parties and the details with related partiestransactions have been disclosed in the financial statements as required by theapplicable accounting standards.
(xiv) (a) In our opinion and based on our examination the company has an internalaudit system commensurate with the size and nature of its business.
(b) We have considered the Internal Audit Reports of the company issued till date forthe period under audit.
(xv) According to the information and explanations given to us in our opinion duringthe year the company has not entered into any non-cash transactions with its directors orpersons connected with its directors and hence provisions of section 192 of the CompaniesAct 2013 are not applicable to the company.
(xvi) The company is not required to be registered under section 45 -IAof the ReserveBank of India Act 1934 (2 of 1934). As such clause (b) (c) and (d) are not applicableto the company.
(xvii) The company has not incurred cash losses in the current financial year howeverit had incurred cash losses of Rs. 429 Thousand in the immediately preceding financialyear.
(xviii) There has been no resignation of the statutory auditors during the year andaccordingly this clause is not applicable.
(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realization of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and based on our examination of the evidencesupporting the assumptions nothing has come to our attention which causes us to believethat any material uncertainty exists as on the date of the audit report that company isnot capable of meeting its liabilities existing at the date of balance sheet as and whenthey fall due within a period of one year from the balance sheet date.
We however state that this is not an assurance as to the future viability of thecompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the company as and when they fall due.
(xx) The company does not fall in the criteria provided under section 135 of theCompanies Act 2013 accordingly clause (xx) is not applicable.
(xxi) The company is not required to prepare the consolidated financial statements assuch clause is not applicable to the company.
Annexure B to Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PradhinLimited as of March 31 2022 in conjunction with our audit of the standalone financialstatements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls over financial reporting and theGuidance Note issued by ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.
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 system over financial reportingincluded obtaining an understanding of internal financial controls system over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
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.
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 generally acceptedaccounting principles. A company's internal financial control over financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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 unauthorised 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.
In our opinion to the best of our information and according to the explanations givento us 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 312022 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.
|Place : Ahmedabad ||For RMJ & Associates LLP |
|Date : 19th May 2022 ||Chartered Accountants |
| ||Firms Reg. No. W100281 |
| ||Sd/- |
| ||Malav J Ajmera |
| ||Partner |
| ||Mem. No. 114351 |
| ||UDIN:- 22114351AJGCPQ7423 |
| ||UDIN Date:- 19th May 2022 |