TO THE MEMBERS OF LOVABLE LINGERIE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Lovable Lingerie Limited ('theCompany') which comprise the balance sheet as at 31 March 2016 the statement of profitand loss and the cash flow statement for the year then ended and a summary of significantaccounting policies and other explanatory information.
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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance aboutwhetherthefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation of the financialstatements in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.
Report on other Legal & Regulatory Requirements
1. 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 thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.
2. 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 appears from our examination of those books and proper returns adequatefor the purposes of our audit have been received from the branches not visited by us.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 ofthe Companies(Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none ofthe directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofSection 164(2) oftheAct.
f) 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";and
g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules2014:
(i) The Company has disclosed the impact of pending litigations on its financialpositions in its financial statement -Refernote No. 12tothefinancial statements.
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.
(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise.
For VINOD KUMAR JAIN & CO.
Vinod Kumar Jain
Proprietor M. No. 36373
ANNEXURE "A" OF AUDITOR'S REPORT
Annexure "A" referred to in our report to the members of LOVABLE LINGERIELIMITED on the accounts for the year ended 31st March 2016. We reportthat:
(i) In respect of its fixed assets
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
b. The Fixed assets were been physically verified by the management during the year andin our opinion the frequency of verification is reasonable having regard to the size ofthe company and the nature of its assets. No material discrepancies were noticed on suchverification.
c. 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.
(ii) In respect of its inventory
a. The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable.
b. In our opinion and according to information and explanation given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c. In our opinion and according to information and explanation given to us the companyis maintaining proper records of inventory. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material having regard to thesize of the operations of the Company and have been properly dealt with in the booksofaccounts.
(iii) In respect of loans secured or unsecured granted by the Company to companiesfirms limited liability partnership or other parties covered in the Register undersection 189 of the Companies Act 2013 according to the information and explanation givento us:
The company has not granted any such loans accordingly; sub-clause a. relatingto payment of principal and interest; and sub-clause b. relating to steps ofrecovery/repayment taken are not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted deposit within the meaning of the provisions of sections 73 to 76or any other relevant provisions of the Co. Act 2013 and the Companies (Acceptance ofDeposits) Rules framed there under. According to the information and explanations givento us no order has been passed by the Company Law Board or National Company Law Tribunalor Reserve bank of India or any court or any other tribunal.
(vi) As informed to us the Central Government has not prescribed the maintenance ofcost records under section 148(1) of the Companies Act 2013 as such question whethersuch accounts and records have been made and maintained does notarise.
(vii) According to information and explanations given to us and records produced inrespect of statutory dues:
a. (i) The Company has generally been regular in depositing with the appropriateauthorities undisputed statutory dues including Provident Fund investor education andprotection fund Employees state insurance income- tax sales tax Wealth tax customduty excise duty service tax value added tax cess and other material statutory duesapplicable to it.
(ii) There were no undisputed amounts payable in respect of sales tax income taxcustoms duty wealth tax service tax value added tax and other material statutory duesapplicable to the Company that were in arrears as at March 31st 2016 for a period of morethan six months from the date they became payable except wealth tax ofRs.11471/-.
b. There are no dues in respect of sales tax income tax customs duty wealth taxservice tax excise duty VAT cess and other material statutory dues that have not beendeposited on account of any dispute excepting those mentioned hereunder:
|Name of Statue ||Nature of Dues ||Amount (?) ||Period to which amt. relates ||Forum where dispute is pending |
|Customs Act ||Demand ||*1942798 ||2010-11 ||Com. OfCustoms Bengaluru |
|Income Tax Act ||Asst. Demand ||954730 ||AY 10-11 ||ITAT Mumbai |
|Income Tax Act ||Asst. Demand ||3070130 ||AY 11-12 ||ITAT Mumbai |
|Income Tax Act ||Asst. Demand ||2505750 ||AY 12-13 ||CIT (A) Mumbai |
*The amount indicated is after reducing of Rs.2777000/-which has been paid underprotest
c. There has not been any occasion in case of the company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question ofreporting delay in transferring such sums does not arise.
(viii) The Company has not defaulted in repayment of loans or borrowings to a financialinstitutions banks government or dues to debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). And in our opinion and according to informationand explanations given to us the term loan have been applied for the purpose for whichthe loans were obtained.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided accordance with the requisite approvalmandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii)ofthe Order is notapplicable.
(xiii) Accordingly to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) Accordingtothe information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is notapplicable.
(xvi) The Company is not required to be registered under section 45-IA ofthe ReserveBank of India Act 1934.
For VINOD KUMAR JAIN & CO.
Vinod Kumar Jain
Proprietor M. No. 36373
MUMBAI DATED: May 302016
To the Independent Auditor's Report of even date on the financial statements of LovableLingerie Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of LovableLingerie Limited ("the Company') as of 31st March 2016 in conjunction with ouraudit of the financial statements 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 overfinancial 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 issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 overfinancial 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 procedureselected depend on the auditor's judgement 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 systemoverfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting.
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A company's internal financial control overfinancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the riskthatthe internal financial controloverfinancial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For VINOD KUMAR JAIN & CO.
Vinod Kumar Jain
Proprietor M. No. 36373