praxis home retail ltd share price Auditors report


To

The Members of

Praxis Home Retail Limited

1. QUALIFIED OPINION

We have audited the accompanying financial statements of Praxis Home Retail Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and Statement of

Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the

Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its loss, total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

2. BASIS FOR QUALIFIED OPINION

As stated in note no. 41 of the financial statements, the Company has "Deposit receivables towards matured lease agreement (which were given in the nature of security deposit)" from a related party of an amount of Rs. 10,100 lakhs. The Company has not identified & recognized loss allowance for expected credit losses (ECL) on such other receivables, which is not in conformity with the requirements of Ind AS 109 "Financial Instruments". Considering the available financial position / statement of such related party where there is an indication about material uncertainty towards its ability to continue as going concern and where an Interim Resolution Professional has been appointed by Honble National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 and other relevant surrounding circumstances, we are unable to determine and quantify whether this amount will be fully recoverable and it requires any provision of ECL. Further, as stated in note no. 49, the balances of payables and receivables are subject to confirmation and reconciliation, if any. Pursuant to the non-determination of the ECL provision & complete availability of balance confirmations, its impact on the losses, net worth and EPS of the Company for the year ended March 31, 2023 and as on the balance sheet date, is not ascertainable.

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together with the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the

ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the financial statements.

3. MATERIAL UNCERTAINTY RELATED TO GOING CONCERN

Attention is invited to note no. 44 of the financial statements which states that the Company has incurred net loss of 2,101.39 lakhs during the year ended March 31, 2023 and, as of that date, the

Companys current liabilities exceed its current assets which indicate a material uncertainty that may cast a significant doubt on the Companys ability to continue as a going concern. However, the financial statements are prepared on a going concern basis for the reasons stated in the aforesaid note.

Our conclusion is not modified in respect of this matter.

4. EMPHASIS OF MATTER

Attention is invited to note no. 18 of the financial statements which states that the Company could not redeem the 9% Non-Cumulative Redeemable Preference Shares of 100/- each ("NCRPs") aggregating to 630.00 lakhs held by

Future Enterprises Limited ("FEL") which were due for redemption on December 08, 2022, for the reasons stated therein.

Our conclusion is not modified in respect of this matter.

5. KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters

How our audit addressed the key audit matters

i) Inventories

Our audit procedures included but were not limited to the following:
As of March 31, 2023, the total inventory aggregates to 6,633.64 lakhs in the financial statements of the Company which represents 21% of the total assets of the Company. Refer note 9 of the financial statements. - We have obtained list of inventories lying at various stores / warehouses along with the details of its carrying value from the management as at March 31, 2023;
For accounting principles and relevant accounting policy on inventory refer note 2.12 to the financial statements. - Assessed the appropriateness of the Companys accounting policy for valuation of inventories.
The Company is exposed to risk of slow- moving and/or obsolete inventory as a result of seasonal/festival demand for products and shrinkages in the inventory. - We have verified the valuation of different categories of inventories on test check basis;
Significant judgment is required for the estimation of the net realisable value and allowance for slow-moving and obsolete inventories. Such estimation is made after taking into consideration factors such as movement in price, current and expected future market demand and pricing competition. - We evaluated the appropriateness of the basis and processes used by management in determining the net realisable value of inventories.
As such, we determined that this is a key audit matter. - We have obtained the Physical Verification report, for the physical verification carried out during the year by the stock auditor of the Company for different locations and relied upon their reports.;
- We obtained inventory reports for calculation of the shrinkage value of inventories lying at various stores /warehouse from the management, which has been performed by the stock auditor.
- We reviewed the Companys disclosures towards inventories which is as mentioned in note 9 of the financial statements.

 

Key audit matters

How our audit addressed the key audit matters

ii) Accounting for Leases under Ind AS 116

Our audit procedures included but were not limited to the following:
As at March 31, 2023, the Company has Right of Use (RoU) assets (net value) of Rs.10,364.48 lakhs and Lease liabilities (non- current and current) of Rs.10,402.01 lakhs recognized under Ind AS 116 pertaining to the premises leased by the Company, which represents 33% of the total assets and total equity & liabilities of the Company. Ind AS 116 has a significant impact on the reported assets, liabilities and the statement of profit & loss of the Company. Assessed the design and implementation of the key controls relating to the determination of the Ind AS 116 impact disclosure.
Accounting under Ind AS 116, requires significant judgement and estimate in identification of lease arrangement and lease period, determining the RoU assets and lease liabilities using the appropriate discount rate, appropriate recognition of rent concession and modification to terms of the underlying agreements. Accordingly, the same is considered a key audit matter in our audit of the financial statements. We have read a sample of contracts to assess whether leases have been appropriately identified, agreed the inputs used in the quantification to the lease agreements the discount rate applied and performed computation checks.
Assessed the accuracy of the lease data by testing the lease data captured by Management for a sample of leases through the inspection of lease documentations.
Tested the completeness of the lease data by reconciling the Companys existing lease commitments to the lease data used in the Ind AS 116.
Verification of the data for recognition of lease liability, right of use assets, depreciation and interest.
Assessed the Companys accounting policy, as stated in the note 2.24 of the financial statement, with respect to recognition of leases to ensure they are in accordance with requirements of Ind AS 116.
Assessed whether the disclosures included in the notes 3(b) and 33 of the financial statements are in conformity with the applicable standard.

6.

INFORMATION OTHER THAN THE FINANCIALSTATEMENTS AND AUDITORS REPORT THEREON

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion

& Analysis, Boards Report and Corporate Governance Report (but does not include the financial statements and our auditors report thereon) which are expected to be made available to us after the date of this auditors report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and determine the actions under the applicable laws and regulations.

7. RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

8. AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

i. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

ii. Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions 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 as a going concern.

v. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of the misstatement in the statement that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the statement may be influenced. We consider quantitative materiality and qualitative factors in; (i) planning the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effects of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of financial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

9. OTHER MATTER

The comparative financial statements of the Company, as stated in the financial statements, for the year ended March 31, 2022, were audited by the predecessor auditor who expressed an unmodified opinion on those financial statement on May 14, 2022. Accordingly, we do not express any opinion on the figures reported in the financial statements for the year ended March 31, 2022.

Our opinion is not modified in respect of this matter.

10.

REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS

i. As required by the Companies (Auditors report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ii. As required by section 143 (3) of the Act, based on our audit we report that:

a. Except as stated in the paragraph on Basis for Qualified Opinion, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Except for the possible effects of the matters described in the paragraph on Basis for Qualified Opinion above, in our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books; c. Except as stated in the paragraph on Basis for Qualified Opinion, the Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account; d. Except for the possible effects of the matters described in the paragraph on Basis for Qualified Opinion above, in our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; e. On the basis of written representations received from the directors as on March

31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023, from being appointed as a director in terms of section 164 (2) of the Act; f. With respect to the adequacy of the internal financial controls with reference to the financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure

B". Our report expresses a modified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to financial statements; g. With respect to the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us the managerial remuneration paid by the

Company to its director during the year is in accordance with the provisions of section 197 of the Act; h. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,

Annual Report 2022-23

2014, as amended in our opinion and 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 the financial position in its financial statements Refer note 40 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the

Investor Education and Protection Fund by the Company;

iv. (a) The Management has represented that to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recordedinwritingorotherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any 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 its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures that have been considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the 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.

For Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Amit Hundia

Partner

Membership No. 120761 UDIN: 23120761BGYVUC9956

Place: Mumbai Date: May 27, 2023

Annexure A to the Independent Auditors Report of even date on the financial statements of Praxis Home Retail Limited

Referred to in paragraph [10(i)] under Report on Other Legal and Regulatory Requirements of our report of even date

According to the information and explanations provided to us by the Company and the books of accounts and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

(i) a) A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment comprising of Right-of-use Assets.

B) The Company has maintained proper records showing full particulars of Intangible Assets.

b) For the year, the property, plant and equipment have been physically verified by the external professional along with the management. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c) The Company does not have any immovable property; hence the provision of the clause 3(i)(c) of the Order is not applicable to the Company.

d) During the year, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or Intangible Assets.

e) According to the information, explanations and representations given to us, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami

Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(ii) a) According to the information and explanations given to us and records examined by us, the management of the Company has conducted physical verification of approximately two third of its inventories at reasonable intervals and the coverage and the procedure of such verification by the management / external professional is appropriate. As explained to us and on the basis of records examined by us, the value of discrepancies noticed on physical verification by the management / external professional did not exceed 10% or more in aggregate for the inventory.

b) According to the information and explanations given to us, the Company has been sanctioned working capital limits in excess of Five crores in aggregate from a bank and a financial institution on the basis of security of current assets. As mentioned in note no. 16(E) of the financial statements, the Company has not submitted all the required details as a part of quarterly returns / statements to these entities. However, certain set of details which have been submitted to these entities on quarterly basis are in agreement with the books of account of the Company.

(iii) According to the information and explanations given to us and records examined by us, during the year Company has not made any investments, not provided any guarantee or security or granted any loans or advance in nature of loans, secured or unsecured, to Companies, Firms, Limited Liability Partnerships or any Other parties. Further, there were no loans and advances in the nature of loan granted earlier which has been renewed or extended or fresh loans granted to settle the overdues of the existing loan given to the same parties. Hence, the reporting requirements of clause 3(iii) of the Order is not applicable to the Company.

(iv) According to the information and explanations given to us, during the year, the Company has not granted loans, made investments, given guarantees and securities. Hence, the reporting requirements of clause 3(iv) of the Order is not applicable to the Company.

(v) According to the information and explanations given to us, during the year, the Company has not accepted any deposits or amounts which are deemed to be deposits under the provisions of the Companies Act, 2013. Hence, the reporting requirements of clause 3(v) of the Order is not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Government under Section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus, reporting under clause 3(vi) of the Order is not applicable to the Company.

(vii) Based on the records examined by us and according to the information and explanations given to us:

a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees state insurance, income-tax, duty of customs, goods & service tax (GST), cess and other material statutory dues applicable to it, with the appropriate authorities though there has been a slight delay in a few cases. However, there have been non reversal of input tax credit availed on GST for payables

(including ITC availed on purchases made on SOR basis) outstanding at any point in time for more than 180 days, amount of which is not quantifiable. As explained to us, the Company did not have any dues on account of sales tax, service tax, duty of excise and value added tax.

b) There were no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, duty of customs, goods and services tax, cess and other material statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable except for non reversal of input tax credit availed on GST for payables (including ITC availed on purchases made on SOR basis) outstanding for more than 180 days, under the Central and State Goods and Services Tax Acts, amount of which is 254.60 lakhs for the various periods and for the various due dates.

c) Statutory dues referred to in sub- clause (a) above which have not been deposited as on

31 March 2023, on account of disputes are given below:

Name of the Statute Nature of Due Amount ( in Lakhs) Amount paid under Protest ( In Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act, 1961 Income tax 34.13 6.82 AY 2018-19 CIT (Appeals), Mumbai
Income Tax Act, 1961 Income tax 50.72 10.14 AY 2019-20 CIT (Appeals), Mumbai
Income Tax Act, 1961 Income tax 28.96 5.79 AY 2020-21 CIT (Appeals), Mumbai
Central Goods and Service Tax Act, 2017 Goods and Service Tax 367.88 Nil November 2017 to September 2019 Directorate General of Anti

(viii) According to the information, explanations and representation given to us, during the year, there are no transactions which have not been recorded in the books of account which have been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) On the basis of our examination of the records and according to the information and explanations given to us and representation received from the management, during the year:

a) the Company has not defaulted in repayment of loans or borrowings or in the payment of interest thereon to any lender.

b) the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

c) the Company has not availed any term loans during the year accordingly, reporting under paragraph 3(ix)(c) of the Order is not applicable to the Company.

d) no funds raised on short-term basis have been used for long-term purposes by the Company.

e) the Company does not have any subsidiary, associate or joint venture. Hence, the reporting requirements under clause 3(ix) (e) and (f) of the Order is not applicable.

(x) a) During the year, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and hence reporting requirements under paragraph 3 (x)(a) of the Order is not applicable to the Company.

b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) and hence reporting under paragraph 3(x)(b) of the Order is not applicable to the Company.

(xi) a) According to the information, explanation and representations given to us, no fraud by the Company or no fraud on the Company has been noticed or reported during the year.

b) According to the information, explanation and representations given to us for the erstwhile auditors existed in the current year and to the best of our knowledge, during the year and upto the date of this report, no report under sub-section (12) of section 143 of the Act has been in Form ADT- 4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) According to the information, explanation and representations given to us by the management, during the year, there were no whistle blower complaints received by the Company.

(xii) The Company is not a nidhi company and hence reporting under paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given by the management, all the transactions entered during the year with the related parties are in compliance with section 177 and 188 of the Act where applicable. Further, the details of such related party transactions have been disclosed in the financial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures.

(xiv) a) In our opinion, internal audit system needs to be made commensurate with the size and the nature of the business of the Company.

b) We have taken into consideration, the internal audit reports for the period under audit issued to the Company till the date while determining the nature, timing and extent of audit procedures.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act. Hence, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India (RBI) Act, 1934.

b) The Company has not conducted any

Non- Banking Financial or Housing Finance

Activities as prescribed under the Reserve

Bank of India Act, 1934.

c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and hence reporting under paragraph 3(xvi)(c) of the Order is not applicable.

d) According to the information, explanations and representation given to us, there is no

CIC in the Group.

(xvii) According to the information and explanations given to us and based on our examination of the records of the Company, during the year, the

Company has incurred cash losses of 3,825.44 lakhs. The effect of unquantified qualification given in paragraph 2 of our independent auditors report has not been taken into consideration for the purpose of reporting in respect of this clause. The Company has not incurred cash losses in the immediately preceding financial year.

(xviii) During the year, there has been no resignation of the Statutory Auditors.

(xix) According to the information and explanations given to us and on the basis of the financial ratios (also refer note 53 to the financial statements), ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, there is an indication that material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they 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 the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) Based on the examination of records of the

Company and according to the information and explanations given to us, due to the losses incurred by the Company, the conditions and requirements of section 135 of the act is not applicable to the Company. Hence, reporting requirements under the clause 3(xx)(a) and (xx) (b) of the Order are not applicable.

(xxi) The Company did not have any subsidiary, associate or joint venture and hence, reporting requirements under the clause 3(xxi) of the Order is not applicable.

For Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Amit Hundia

Partner

Membership No. 120761 UDIN: 23120761BGYVUC9956

Place: Mumbai Date: May 27, 2023

Annexure B to the Independent Auditors Report of even date on the financial statements Limited of Praxis Home Retail

Referred to in paragraph [10(ii)(f)] under Report on Other Legal and Regulatory Requirements of our report of even date

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting with reference to the Financial Statements of Praxis Home Retail Limited (the

"Company") as of March 31, 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks 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 to provide a basis for our qualified audit opinion on the Companys internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

QUALIFIED OPINION

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the operating effectiveness of the Companys internal financial controls over financial reporting as at March 31, 2023:

a. The Companys internal financial controls with regards to maintenance of back up process for user data files, user access review and review of IT policy documents, were not operating effectively; and

b. The Companys internal financial controls with regards to maintenance of details for the gift voucher / gift coupon issued by it, were not operating effectively and it has not identified and tested the risks and controls in relation to transactions carried out under Sale or Return (SOR) basis arrangement.

These matters could have potential impact on the relevant areas of the financial statements / information technology general controls of the Company.

A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, to the best of our information and according to the explanations given to us, except for the possible effects of the internal control weaknesses described above on the achievements of the objectives of the control criteria, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, and such internal financial controls over financial reporting with reference to financial statements of the Company were operating effectively as of March 31, 2023.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2023 financial statements of the Company, and these material weaknesses do not affect our opinion on the financial statements of the Company.

For Singhi & Co.

Chartered Accountants

Firm Registration No. 302049E

Amit Hundia

Partner

Membership No. 120761

UDIN: 23120761BGYVUC9956

Place: Mumbai Date: May 27, 2023