The Members of PRASHANT INDIA LTD.
Report on the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Prashant India Limited whichcomprise the balance sheet as at 31st March 2018 and the statement of Profit and Lossand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and profit/loss and its cash flows for the year ended on that date.
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.
Management's Responsibility for the Standalone Financial 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 financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgments and estimatesthat are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
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 theCompany's financial reporting 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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
We draw attention to the following matters in the Notes to the standalone financialstatements :
Note no.2(a): Regarding non accounting for gratuity leave encashment & bonusliability contrary to sec.128 of the Companies Act 2013 and AS-15 issued by the ICAI.
Note no.2(b): Regarding accounts of the company having been prepared on GoingConcern Basis' despite
operations of Agro Division of the Company having stood suspended since theyear 1998 and having finalized the deal to saleplant & machineries of the division asscrap after the balance sheet date
net losses / cash losses having been incurred by the Company over the pastseveral years including the current financial year
net worth of the Company having been totally eroded and substantial losseshaving been carried forward as at 31stMarch 2018
current liabilities exceeded Company's current assets as at the balance sheetdate
BIFR restoring company's reference in conformity with the order passed by theHon'ble High Court of Gujarat for fresh hearing under the provisions of the SickIndustrial Companies (Special Provisions) Act 1985
in the absence of adequate data and information for its compilation on an alternativebasis and consequently no adjustments having been made in the accounts relating to therecoverability of recorded asset amounts and in respect of recorded liabilities andcontingent liabilities that might devolve on the company.
These condition indicate the existence of a material uncertainty that may castsignificant doubt about the Company's ability to continue as a going concern.
Note no. 24(b) : Regarding non provision of liabilities of Rs. 7882.23lacs
Note no.24(k): Regarding certain balances being subject to confirmation the effect ofwhich could not be quantified
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in 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) Except for the matters described in the other matters paragraph above in ouropinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) The going concern matter described in sub-paragraph (b) under the Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.
f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2018 from being appointed as a director in terms ofSection 164 (2) of the Act.
g) 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".
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 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 - Refer Note 23 to the 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 tra nsferred to the InvestorEducation and Protection Fund by the Company.
Annexure A' to the Independent Auditor's Report -
The Annexure referred to in our Independent Auditor's Report to the members of Prashant
India Ltd. on the standalone financial statements for the year ended on 31stMarch2018
Statement on matters specified in paragraphs 3 & 4 of the Companies (Auditor'sReport)
1. In respect of Fixed Assets :
(a) The company maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.
(c) As explained to us the Company has a program for physical verification of fixedassets at periodic intervals. In our opinion the period of verification is reasonablehaving regard to the size of the company and the nature of its assets. The discrepanciesnoticed on such verification were not material and the same have been properly dealt within the books of account.
2. In respect of Inventories :
Physical verification of inventory (except stocks lying with third partiesconfirmation for which has been obtained and in stocks in transit) has been conducted atreasonable intervals by the management. The discrepancies noticed on such verificationwere not material and the same have been properly dealt with in the books of account.
3. In respect of loans granted by the company:
(a) The Company has not granted any loans secured or unsecured to companies firmsLLPs or other parties listed in Register maintained u/s 189 read with clause 76 of section2 of the Companies Act 2013.
(b) Since there are no transactions of loans given by the company clauses (a) (b)& (c) of paragraph 3(iii) of the order are not applicable.
4. In our opinion and according to the information and explanations given to us inrespect of loans investment and guarantees provisions of section 185 and 186 of theCompanies Act 2013 have been complied with.
5. According to the information and explanations given to us the company has notaccepted deposits from the public. The directives issued by the RBI and the provisions ofsections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under where applicable have been complied with. No order has beenpassed by CLB or National Company Law Tribunal or RBI or any court or any other tribunalfor any contraventions.
6. As informed to us maintenance of cost records has not been specified by the CentralGovernment under sub-section (1) of secton 148 of the Companies Act 2013 for job workactivity and power generation activity undertaken by the Company.
7. In respect of statutory dues :
(a) According to the information and explanations given to us the Company has beenregular in depositing undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax and any other statutory dues with the appropriate authorities except thatfollowing statutory dues which on account of disputes are outstanding as at the last dayof the financial year for a period of more than six months from the date they becamepayable :
|Nature of statute- Authority ||Nature of dues ||Amount Rs. lacs ||Period ||Authority |
|Customs Act 1962 & Central Excise Act 1944 ||Custom duty ||77.03 ||Prior to year 2000 ||Central Excise & Customs Authority |
|Land Revenue Act ||Land rev. ||23.64 ||Up to FY 2017-18 ||Local Authority of Palsana and Bhavnagar |
(b) The disputed dues of income tax or sales tax or service tax or duty of customs orduty of excise or value added tax not having been deposited on account of dispute thenthe amounts involved and the forum where dispute is pending are as follows:
|Nature of statute- Authority ||Nature of dues ||Amount Rs. lacs ||Period ||Forum where dispute is pending |
|G.S.T. Act 1969 ||Sales tax ||121.05 ||FY 1989-90 &FY 1993-94 to FY 1998-99 ||AC Bhavnagar |
|I.T.Act 1961 ||Income Tax- A.Y. 1992-93 ||Not fixed ||FY1991-92 ||High Court Gujarat |
8. The financial institutions and banks have from time to time either settled theirentire dues or assigned their entire dues in favor of strategic investors. Accordingly ason 31st March 2018 there is no outstanding of any dues of any financialinstitution or a bank. However the Company has defaulted in repayment of loans andborrowings to the Strategic Investors. Please refer to Audit note no.5 7 & 24(b)also.
9. The Company has not raised fresh moneys either by way of public issue/ follow onoffer (including debt instruments) or term loans during the year.
10. The managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theCompanies Act.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or any fraud on theCompany by its officers / employees has been noticed or reported during the course of ouraudit for the year under Audit
12. In our opinion the Company is not a Nidhi Company. Hence paragraph 3(xii) of theOrder is not applicable.
13. The company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year under review.
14. According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with section 177 and 188 of the Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards and provisions of the Companies Act 2013.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not enteredinto any non cashtransactions with directors or persons connected with him. Hence paragraph 3(xv) of theOrder is not applicable.
16. The Company is not required to be Registered u/s 45IA of the Reserve Bank of IndiaAct 1934 and hence provisions of paragraph 3(xvi) of the Order is not applicable.
Annexure B' to the Independent Auditor's Report -
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of PRASHANTINDIA LIMITED as of 31 March 2018 in conjunction with our audit of the financialstatements of the Company for the year ended on that date.
Management's 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
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 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 judgment including the assessment of the risks ofmaterial 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.
| ||For GHEEWALA & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||Sd/- |
|Place : Surat. ||K.R.GHEEWALA |
|Date : 29-05-2018 ||PARTNER |
| ||M.No. : 034405 |
| ||FRN. : 115746W |