To the Members of
Prakash Woollen & Synthetic Mills Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Prakash Woollen& Synthetic Mills Limited ("the Company") which comprise the Balance Sheetas at 31st March 2022 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Fow Statement and the Statement of Changes in Equity for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
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 true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS) specified under section 133 of the Act of the stateof affairs of the Company as at March 31 2022 and its profit (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Information other than the Financial Statements and Auditors' Report thereon
The Company's Board of Directors is responsible for theother information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditors' report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. 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 implementation andmaintenance of 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards of Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain evidence that is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and reasonableness ofaccounting estimates and related disclousures 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 auditors' report to the related disclosures inthe statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosures about the matter orwhen in extremely circumstances we determine that a matter should not be communicated inour report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act 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 and the Cash Flow Statementdealt with by this Report are in agreement with the 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 31stMarch 2022 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act.
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".
g) 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 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 its financialposition in its financial statements.
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 the InvestorEducation and Protection Fund by the Company.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds ( which are material either individually or in the aggregate) have been advancedor loaned or invested ( either from borrowed funds or share premium or any other sourcesor kind of funds) by the company to or in any other person or entity including foreignentity ( Intermediaries) with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of thecompany ( Ultimate Beneficiaries) or provide any guarantee security or the like on behalfof the Ultimate Beneficiaries;
(b) The management has represented that to the best of its knowledge and belief nofunds ( which are material either individually or in the aggregate) have been received bythe company from any person or entity including foreign entity (Funding Parties) withthe understanding whether recorded in writing or otherwise that the company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have 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 as provided under (a)and (b) above contain any material misstatement.
v. The company has not declared or paid dividend during the year.
ANNEXURE A TO THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH WOOLLEN &SYNTHETIC MILLS LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31MARCH 2022
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) (A) The company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment.
(B) The company does not have intangible assets so no requirement of maintainingproper records of intangible assets.
(b) The Company has a regular programme of physical verification of its property plantand equipment by which property plant and equipment are verified once in a year. Inaccordance with the programme property plant and equipment were verified during the yearand no material discrepancies were noticed on such verification. In our opinion theperiodicity of physical verification is reasonable having regard to the size of thecompany and the nature of its assets.
(c) The title deeds of all immovable properties (which are included under the Note 2A -Property plant and equipment) are held in the name of the company.
(d) The company has not revalued any of its Property Plant and Equipment andintangible assets during the year.
(e) No proceedings have been initiated during the year or are pending against thecompany as at March 31 2022 for holding any benami property under the Benami Transactions( Prohibition) Act 1988 ( as amended in 2016) and rules made thereunder.
(ii) (a) In our opinion the management has conducted physical verification ofinventory at reasonable intervals during the year and no material discrepancies werenoticed on such verification.
(b) the company has been sanctioned working capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets; the quarterly returns or statements filed by the company with such banksor financial institutions are in agreement with the books of account of the Company.
(iii) The company has granted unsecured loans to companies during the year in respectof which:
(a) The company has provided loans or advances in the nature of loans to any otherentity during the year
(A) the aggregate amount during the year and balance outstanding at the balance sheetdate with respect to such loans or advances and guarantees or security to subsidiariesjoint ventures and associates is nil;
(B) the aggregate amount during the year is Rs 75 lakh only and balance outstanding atthe balance sheet date is nil with respect to such loans or advances and guarantees orsecurity to parties other than subsidiaries joint ventures and associates;
(b) In our opinion the terms and conditions of the grants of all loan and advances inthe nature of loans during the year are prima facie not prejudicial th the company'sinterest.
(c) In respect of loans granted by the company the schedule of repayment of principaland payment of interest has been stipulated and the repayments of principal amounts andreceipts of interest are generally been regular as per stipulation.
(d) In respect of loans granted by the company there is no overdue amount remainingoutstanding as at the balance sheet date.
(e) No loan granted by the company which has fallen due during the year has beenrenewed or extended or fresh loans granted to settle the overdues of existing loans givento the same parties.
(f) The company has not granted any loans or advances in the nature of loans eitherrepayable on demand or without specifying any terms or period of repayment during theyear. Hence reporting under clause 3(iii)(f) is not applicable.
(iv) The company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of loans granted investments made and guarantees andsecurities provided as applicable.
(v) The company has not accepted any deposit or amounts which are deemed to bedeposits. Hence reporting under clause 3(v) of the Order is not applicable.
(vi) The maintenance of cost records has not been specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act for the products which companyproduces. Hence reporting under clause (vi) of the Order is not applicable to thecompany.
(vii) (a) The Company has generally been regular in depositing the undisputed statutorydues including Goods and Service tax Provident fund Employees' state insurance Incometax Sales tax Service tax Duty of customs Duty of excise Value added tax Cess andother material statutory dues as applicable with the appropriate authorities. Furtherno undisputed amounts payable in respect thereof were outstanding at the year end for aperiod of more than six months from the date they became payable.
(b) There are no dues referred to in clause (a) above which have not been deposited onaccount of any dispute except of (i) value added tax amounting to Rs 20.58 lakh for thefinancial year 2016-17 out of which Rs 8 lakh have been paid the appeal against which ispending before Tribunal (VAT) and (ii) PF amounting to Rs 26.69 lakh out of which Rs 8lakh have been deposited the Appeal before EPFAT New Delhi is pending.
(viii) There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1964 (43 of 1961)
(ix) (a) The company has not defaulted in repayment of loans or borrowing or interestthereon to a lender during the year.
(b) The company has not been declared willful defaulter by any bank or financialinstitution or government or any government authority.
(c) The term loans were applied prima facie for the purpose for which the loans wereobtained.
(d) On an overall examination of the financial statements of the company funds raisedon short term basis have prima facie not been used during the year for long termpurposes by the company.
(e) On an overall examination of the financial statements of the company the companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries.
(f) The company has not raised any loans during the year and hence reporting on clause3(ix)(f) of the Order is not applicable.
(x) (a) The company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.
(b) During the year the company has not made any preferential allotment or privateplacement of shares or convertible debentures ( fully or partly or optionally ) and hencereporting under clause 3(x)(b) of the Order is not applicable.
(xi) (a) No fraud by the company and no material fraud on the company has been noticedor reported during the year.
(b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under rule 13 of companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.
(c) The company has not received any whistle blower complaints during the year andhence reporting under clause 3(xi)(c) of the Order is not applicable.
(xii) The company is not a nidhi company and hence reporting under clause 3(xii) of theOrder is not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements as required by the applicable accounting standards.
(xiv) (a) In our opinion the company has an adequate internal audit systemcommensurate with the size and the nature of its business.
(b) We have considered the internal audit reports for the year under audit issued tothe company during the year and till date in determining the nature timing and extent ofour audit procedures.
(xv) In our opinion during the year the company has not entered into any non- cashtransaction with its directors or persons connected with its directors and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the company.
(xvi) (a) In our opinion the company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
Hence reporting under clause 3(xvi)(a)(b) and (c) of the Order is not applicable.
(b) In our opinion there is no core investment company within the Group ( as definedin the Core Investment Companies ( Reserve Bank) Directions 2016) and accordinglyreporting under clause 3(xvi)(d) of the Order is applicable.
(xvii) The company has not incurred cash losses during the financial year covered byour audit and the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of the company duringthe year.
(xix) On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the company as and when they fall due.
(xx) (a) There are no unspent amounts towards Corporate Social Responsibility (CSR) onother than ongoing projects requiring a transfer to a Fund specified in Schedule VII tothe Companies Act in compliance with second proviso to sub-section (5) of Section 135 ofthe said Act. Accordingly reporting under clause 3(xx)(a) of the Order is not applicablefor the year.
(b) In respect of ongoing projects there are no unspent Corporate SocialResponsibility (CSR) amounts as at the end of the previous financial year requiring atransfer to a Special account within a period of 30 days from the end of the saidfinancial year in compliance with the provision of section 135(6) of the Act.
ANNEXURE B TO THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH WOOLLEN &SYNTHETIC MILLS LIMITED ON THE STANDALONE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 MARCH2022
Auditors Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Act
1. We have audited the internal financial controls over financial reporting of PrakashWoollen & Synthetic Mills Limited (formerly known as Prakash Woollen Mills Limited)("the Company") as of March 31 2022 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 (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 company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. 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.
8. In our opinion 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 on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For A. Anand & Co. Chartered Accountants |
| ||Firm's registration number: 005147C |
|Place : Village Amhera (Amroha) ||(AJAY ANAND) (Partner) |
|Date : 28.05.2022 ||Membership No. 074016 |
| ||UDIN : 21074016AAAABP5297 |