We have audited the Standalone Financial Statements ofPraj Industries Limited ("the Company"), which comprise theStandalone Balance Sheet as at March 31,2025, the StandaloneStatement of Profit and Loss (including Other ComprehensiveIncome), the Standalone Statement of Changes in Equity andthe Standalone Statement of Cash Flows for the year thenended, and notes to the Standalone Financial Statements,including a summary of material accounting policies andother explanatory information (hereinafter referred to as "theStandalone Financial Statements").
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid StandaloneFinancial Statements give the information required by theCompanies Act, 2013 ("the Act") in the manner so requiredand give a true and fair view in conformity with the accountingprinciples generally accepted in India, of the state of affairsof the Company as at March 31, 2025, its profit and othercomprehensive income, its changes in equity and its cash flowsfor the year ended on that date.
We conducted our audit in accordance with the Standards onAuditing ("SAs") specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independentof the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of theAct and the Rules thereunder, and we have fulfilled our otherethical responsibilities in accordance with these requirementsand the Code of Ethics.
We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of theStandalone Financial Statements of the current period. Thesematters were addressed in the context of our audit of theStandalone Financial Statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinionon these matters.
Significant accounting judgement - Revenue Recognitionin respect of Engineering, Procurement and Commissioning(EPC) contracts
Principle Audit Procedures
The Company is engaged in the business of process andproject engineering. The Company recognises revenuefrom contracts on satisfaction of performance obligationsover a period of time in majority of the EPC contracts. Refernote 2.13 and 28 to the Standalone Financial Statements.The revenue recognition process involves significantaccounting judgements including estimation of costs tocomplete, determining the stage of completion and thetiming of revenue recognition.
The Company recognises revenue and profit/loss asper the stage of completion, based on the proportion ofcontract costs incurred at the balance sheet date, relativeto the total estimated costs of the contract at completion.
i. Testing of the design and implementation of controls involvedin the determination of the estimates used and recording ofactual cost as well as their operating effectiveness;
ii. Testing a sample of contracts for appropriate identification ofperformance obligations and verification of contract value;
iii. For the sample selected, matched the contract revenue, actualinvoices recorded and actual cost incurred against eachproject on the basis of which revenue is recognised;
iv. Reviewed on a test check basis significant changes in cost tocomplete estimates, its approval mechanism and understoodthe reasons for such revisions in estimates;
The recognition of revenue and profit/loss thereforerely on estimates in relation to total estimated costs ofeach contract. Cost contingencies are included in theseestimates to take into account specific uncertain risks,or disputed claims against the Company, arising withineach contract. These contingencies are reviewed by theManagement on a regular basis throughout the contractlife and remeasured as appropriate.
v. Understood the process, nature of expense heads andoverheads adopted by the Company's management toestimate costs for sample contracts and checked accuracyof arithmetic formulae used in calculating the revenue w.r.t.costs incurred and total estimated costs;
vi. Performed analytical procedures for reasonableness ofrevenues disclosed by type and service offerings;
vii. We have ensured that the disclosures provided in notes are inaccordance with the Ind AS 115 and Companies Act, 2013.
The Company's Board of Directors is responsible for theother information. The other information comprises of theManagement Discussion and Analysis; Board of Directors'Report along with its Annexures and Corporate GovernanceReport included in the Annual Report but does not includethe Standalone Financial Statements and our auditor's reportthereon. Our opinion on the Standalone Financial Statementsdoes not cover the other information and we do not express anyform of assurance conclusion thereon. In connection with ouraudit of the Standalone Financial Statements, our responsibilityis to read the other information and, in doing so, considerwhether the other information is materially inconsistent with theStandalone Financial Statements, or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If,based on the work we have performed, we conclude that thereis a material misstatement of this other information; we arerequired to report that fact. We have nothing to report in thisregard.
The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect tothe preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position, financialperformance (including other comprehensive income), changesin equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India, including theIndian Accounting Standards ("Ind AS") specified under section133 of the Act read with the Companies (Indian AccountingStandards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internalfinancial controls, that were operating effectively for ensuringthe accuracy and completeness of the accounting records,relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, themanagement is responsible for assessing the Company'sability to continue as a going concern, disclosing, as applicable,matters related to going concern and using the going concernbasis of accounting unless management either intends toliquidate the Company or to cease operations, or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeingthe Company's financial reporting process.
Our objectives are to obtain reasonable assurance aboutwhether the Standalone Financial Statements as a wholeare free from material misstatement, whether due to fraud orerror, and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is nota guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonablybe expected to influence the economic decisions of users takenon the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professional skepticismthroughout the audit.
We also :
• Identify and assess the risks of material misstatement ofthe Standalone Financial Statements, whether due to fraudor error, design and perform audit procedures responsiveto those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resultingfrom fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal controls relevantto the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinionon whether the Company has adequate internal financialcontrols with reference to the Standalone FinancialStatements in place and the operating effectiveness ofsuch controls.
• Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management's use ofthe going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertaintyexists related to events or conditions that may castsignificant doubt on the Company's ability to continueas a going concern. If we conclude that a materialuncertainty exists, we are required to draw attentionin our auditor's report to the related disclosures in theStandalone Financial Statements or, if such disclosuresare inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date ofour auditor's report. However, future events or conditionsmay cause the Company to cease to continue as a goingconcern.
• Evaluate the overall presentation, structure and contentof the Standalone Financial Statements, including thedisclosures, and whether the Standalone FinancialStatements represent the underlying transactions andevents in a manner that achieves fair presentation.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including anysignificant deficiencies in internal controls that we identifyduring our audit.
We also provide those charged with governance with a statementthat we have complied with relevant ethical requirementsregarding independence, and to communicate with themall relationships and other matters that may reasonably bethought to bear on our independence, and where applicable,related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters.We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when,in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverseconsequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
1. As required by the Companies (Auditor's Report) Order,2020 ("the Order"), issued by the Central Government ofIndia in terms of sub-section (11) of section 143 of theAct, we give in the Annexure A; a statement on the mattersspecified in paragraphs 3 and 4 of the Order, to the extentapplicable.
2. As required by Section 143(3) of the Act, we report that :
a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books exceptfor the matters stated in the paragraph 2 i) (vi) belowon reporting under Rule 11(g).
c) The Balance Sheet, the Statement of Profit andLoss (including other comprehensive income), theStatement of Changes in Equity and the Statement ofCash Flows dealt with by this Report are in agreementwith the books of account.
d) In our opinion, the aforesaid Standalone FinancialStatements comply with the Indian AccountingStandards specified under Section 133 of the Act,read with Companies (Indian Accounting Standards)Rules, 2015, as amended.
e) On the basis of the written representations receivedfrom the directors as on March 31, 2025 taken onrecord by the Board of Directors, none of the directorsis disqualified as on March 31, 2025 from beingappointed as a director in terms of Section 164 (2) ofthe Act.
f) With reference to the maintenance of accountsand other matters connected therewith, refer to ourcomment in paragraph 2 (b) above and refer to ourcomment in paragraph 2(i)(vi) below, on reportingunder rule 11 (g).
g) With respect to the adequacy of the internal financialcontrols with reference to the Standalone FinancialStatements of the Company and the operatingeffectiveness of such controls, refer to our separateReport in Annexure B.
h) As required by section 197 (16) of the Act; in ouropinion and according to information and explanation
provided to us, the remuneration paid/provided by theCompany to its directors for the current year is inaccordance with the provisions of section 197 of theAct and remuneration paid/provided to directors isnot in excess of the limit laid down under this section.
i) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, inour opinion and to the best of our information andaccording to the explanations given to us :
(i) The Company has disclosed the impact ofpending litigations on its financial position in theStandalone Financial Statements - Refer Note27.
(ii) The Company has made provision, as requiredunder any law or accounting standards, formaterial foreseeable losses on long term revenuecontracts. The Company did not have materialforeseeable losses on any derivative contracts.
(iii) There is no delay in amount required to betransferred, to the Investor Education andProtection Fund by the Company during the yearended March 31, 2025.
(iv) (a) The management has represented to us
that, to the best of its knowledge and belief,no funds have been advanced or loaned orinvested (either from borrowed funds orshare premium or any other sources or kindof funds) by the Company to or in any otherperson or entity, including foreign entities("Intermediaries"), with the understanding,whether recorded in writing or otherwise,that the Intermediary shall, whether,directly or indirectly lend or invest in otherpersons or entities identified in any mannerwhatsoever by or on behalf of the Company("Ultimate Beneficiaries") or provide anyguarantee, security or the like on behalf ofthe Ultimate Beneficiaries. Refer note 40(vii)to the Standalone Financial Statements.
(b) The management has represented to us,that, to the best of its knowledge and belief
no funds have been received by the Companyfrom any person or entity, including foreignentities ("Funding Parties"), with theunderstanding, whether recorded in writingor otherwise, that the Company shall,whether, directly or indirectly, lend or investin other persons or entities identified in anymanner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") orprovide any guarantee, security or the likeon behalf of the Ultimate Beneficiaries.Refer note 40(vii) to the StandaloneFinancial Statements.
(c) Based on the information and explanationgiven to us and audit procedures performedas considered reasonable and appropriatein the circumstances, nothing has cometo our notice that has caused us to believethat the representations made by theManagement under sub-clause i) (iv)(a)and (iv)(b) above contain any materialmisstatement.
(v) The dividend declared and paid during the yearby the Company is in compliance with Section123 of the Act.
(vi) Based on our examination which included testchecks, the Company, has used an accountingsoftware, for maintaining its books of accountwhich has a feature of recording audit trail(edit log) facility and the same has operatedthroughout the year for all relevant transactionsrecorded in the software except that no audittrail (edit log) facility/feature was enabled at thedatabase level to log any direct changes. Duringour audit, so far it relates to audit trail in respectof transactions, we did not come across anyinstance of audit trail feature being tamperedwith.
Additionally, the audit trail has been preserved bythe company as per the statutory requirementsfor record retention.
Chartered Accountants
Firm Registration Number : 101118W/W100682
Partner
Membership Number : 136835UDIN :25136835BMLYRU1302Pune
April 29, 2025