prasol chemicals ltd Auditors report

ON RESTATED FINANCIAL INFORMATION

The Board of Directors Prasol Chemicals Limited

(Formerly known as Prasol Chemicals Private Limited)

Prasol House, Plot No. A - 17/2/3,

T. T. C. Industrial Area Khairane,

M. I. D. C. Thane Belapur Road,

Navi Mumbai- 400 710,

Maharashtra, India

Dear Sirs,

1. We, C N K & Associates LLP ("CNK") and S V Shanbhag & Co ( "SVS") ("CNK" and "SVS" together referred to as "Joint Auditors", and "SVS" referred to as "one of the joint Auditors") have examined the Restated Financial Information of Prasol Chemicals Limited (Formerly known as Prasol Chemicals Private Limited) (the ‘Company or ‘Issuer), comprising the Special Purpose Ind AS Balance Sheet as at December 31, 2021, March 31, 2021, March 31, 2020 and March 31, 2019, the Special Purpose Ind AS Statement of Profit and Loss (including other comprehensive income), the Special Purpose Ind AS Statement of Changes in Equity and the Special Purpose Ind AS Statement of Cash Flows for the nine months period ended December 31, 2021 and years ended March 31, 2021, March 31,2020 and March 31, 2019 and the Summary Statement of Significant Accounting Policies, and other explanatory information, as approved by the Board of Directors of the Company at their meeting held on February 24, 2022 and annexed to this Report for the purpose of inclusion in the Draft Red Herring Prospectus (‘DRHP) prepared by the Company in connection with its proposed Initial Public Offer of equity shares (‘IPO) prepared in terms of the requirements of:

a. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the ‘Act);

b. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (‘SEBI ICDR Regulations); and

c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (‘ICAI), as amended from time to time (the ‘Guidance Note).

2. The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the DRHP to be filed with Securities and Exchange Board of India (‘SEBI), National Stock Exchange of India Limited and BSE Limited (collectively, the ‘Stock Exchanges) in connection with the proposed IPO. The Restated Financial Information has been prepared by the management of the Company as stated in note 2 to the Restated Financial Information. The responsibility of the Board of Directors includes designing, implementing and maintaining adequate internal controls relevant to the preparation and presentation of the Restated Financial Information The Board of Directors are also responsible for identifying and ensuring that the Company complies with the Act, SEBI ICDR Regulations and the Guidance Note.

3. We have examined the aforesaid Restated Financial Information taking into consideration:

a. The terms of reference and terms of our engagement agreed upon with you in accordance with Engagement Letter dated February 5, 2022 in connection with the proposed IPO of equity shares of the Issuer

b. The Guidance Note which also requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI;

c. Concept of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information; and

d. The requirements of section 26 of the Act and the SEBI ICDR Regulations.

Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the SEBI ICDR Regulations and the Guidance Note in connection with the IPO.

4. These Restated Financial Information have been compiled by the management from:

a. Special Purpose Interim Ind AS Financial Statements of the Company as at and for the nine months period ended December 31, 2021 prepared in accordance with Ind AS 34 ‘Interim Financial Reporting, prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended ("Ind AS", and other accounting principles generally accepted in India. These Special Purpose Interim Ind AS Financial Statements have been approved by the Board of Directors at their meeting held on February 24, 2022

b. Special Purpose Ind AS Financial Statements of the Company as at and for the year ended March 31, 2021, prepared in accordance with Ind AS, as prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India. These Special Purpose Ind AS Financial Statements for the year ended March 31, 2021 have been approved by the Board of Directors at their meeting held on February 24, 2022

c. Special Purpose Ind AS Financial Statements of the Company as at and for the years ended March 31, 2020 and March 31, 2019 prepared in accordance with Ind AS prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India. These Special Purpose Ind AS Financial Statements for the year ended March 31, 2020 and March 31, 2019 have been approved by the Board of Directors at their meeting held on February 24, 2022.

5. For the purpose of our examination, we have relied on:

a. Auditors report dated February 24, 2022 issued by Joint Auditors on the Special Purpose Interim Ind AS Financial Statements of the Company as at and for the nine months period ended December 31,2021, as referred in Paragraph 4a above; and

b. Auditors reports issued by C N K dated February 24, 2022 on the Special Purpose Ind AS Financial Statements of the Company as at and for the year ended March 31,2021, as referred in Paragraph 4b above; and

c. Auditors Report dated February 24, 2022 issued by SVS on the Special Purpose Ind AS Financial Statements of the Company as at and for the years ended March 31, 2020 and March 31, 2019, respectively, as referred in Paragraph 4c above.

6. Based on our examination and according to the information and explanations given to us for the respective years, we report that:

a. the Restated Financial Information has been prepared after incorporating adjustments for the changes in accounting policies, material errors and regrouping / reclassifications retrospectively in the financial years ended March 31, 2021, March 31, 2020, and March 31, 2019 to reflect the same accounting treatment as per the accounting policies and grouping / classifications followed as at and for the nine months period ended December 31, 2021.

b. There are no qualifications in the auditors reports which require any adjustments to the Restated Financial Information; and

c. the Restated Financial Information has been prepared in accordance with the Act, SEBI ICDR Regulations and the Guidance Note

7. The Restated Financial Information does not reflect the effects of events that occurred subsequent to the respective dates of the reports on the audited financial statements, as mentioned in paragraph 4 above.

8. This report should not in any way be construed as a reissuance or re-dating of any of the audit reports issued by us individually or jointly nor should this report be construed as a new opinion on any of the financial statements referred to herein.

9. We have no responsibility to update our report for events and circumstances occurring after the date of the report.

10. Our report is intended solely for use of the Board of Directors for inclusion in the DRHP to be filed with SEBI, National Stock Exchange of India Limited and BSE Limited, as applicable in connection with the proposed IPO. Our report should not be used, referred to, or distributed for any other purpose except with our prior consent in writing. Accordingly, we do not accept or assume any liability or any duty of care towards any other person relying on the same.

For C N K & Associates LLP	For S.V.Shanbhag & Co.
Chartered Accountants	Chartered Accountants
Firm Registration No.: 101961W/W-100036	Firm Registration No.: 109887W
Sd/-	Sd/-
Himanshu Kishnadwala Partner Membership Number: 037391 UDIN:22037391ADMUUN5856 Place: Navi Mumbai Date: February 24, 2022	Satish V Shanbhag Partner Membership Number:036889 UDIN:22036889ADNXYK4112 Place: Navi Mumbai Date: February 24, 2022