New Delhi, Feb 14 (PTI) The National Financial Reporting Authority (NFRA) has found that Prabhu Steel Industries Ltd was non-compliant with certain accounting standards during 2019-20 fiscal, including failure to make appropriate disclosures.
A listed company, Prabhu Steel has agreed to prepare and publish restated financial statements as per Companies Act, 2013, within 90 days, in view of the “errors/omissions being pervasive across the entire financial statements,” the watchdog said in a release on Monday.
Issuing a Financial Reporting Quality Review (FRQR) report of Prabhu Steel, NFRA said the company has provided contradictory disclosures in the director’s report and the notes to annual accounts regarding the fundamental aspect of the applicable accounting framework followed in the preparation of financial statements for 2019-20.
“By not complying with the material requirements of Ind AS framework and providing disclosures under previously applicable accounting framework, the company has violated the provisions of the Companies Act, 2013 regarding the preparation and presentation of the financial statements,” the release said.
According to NFRA, the company failed to present a component of financial statements and did not comply with the key requirements of Ind ASs on Financial Instruments and Fair Value Measurement.
“… it has failed to perform proper evaluation of impairment loss allowance for its major category of its financial assets viz. trade receivables, loans and advances and bank balances; in the financial statements, there is absence of disclosures required by Ind AS 107 regarding significance of financial instruments, nature and extent of risk arising from the financial instruments,” the release noted.
Among others, the watchdog pointed out that the company failed to make appropriate disclosures regarding its borrowings in the form of loans taken and the assets in the form of loans and advances given.
The company has also failed to provide depreciation on its idle plant and machinery, thus violating the underlying principle of Ind AS 16, as per the release. PTI RAM ABM ABM
