The Members of
LOVABLE LINGERIE LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Lovable Lingerie Limited("the Company") which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including other comprehensive income) statement of changesin equity and statement of cash flows for the year ended and a summary of significantaccounting policies and other explanatory information (hereinafter referred to as the"standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Act read with the companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 and profit and totalcomprehensive income (including other comprehensive income) changes in equity and itscash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note No. 26.17 to the standalone financial statements whichdescribes management's assessment of the impact of the COVID-19 pandemic on the operationsand financial results of the company. Our opinion is not modified on the same.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be key audit matter to be communicated inour report.
|Key Audit Matters ||How our audit addressed the key audit matter |
|Measurement of Investment in accordance with Ind AS 109 "Financial Instruments" On initial recognition investment is recognized at fair value in case of investment which is recognized at fair value through OCI. In that case that transaction costs are attributable to the acquisition value of the investments. ||Our audit procedures included among others the following: |
|The Company's investment are subsequently classified into following categories based on the objective to manage the cash flows and options available in the standard: ||Obtaining an understanding of the companies objectives for such investments and assessment thereof in terms of Ind AS 109. |
|At amortized cost ||Obtaining an understanding of the determination of the measurement of the investments and tested the reasonableness of the significant judgement applied by the management. |
|At fair value through profit or loss (FVTPL) ||Evaluated the design of internal controls relating to measurement and also tested the operating effectiveness of the aforesaid controls. |
|At fair value through Other comprehensive Income (FVTOCI) Since valuation of investment at fair value involves critical assumptions significant risk in valuation and complexity in assessment of objectives the valuation of investments as per Ind AS 109 is determined to be a key audit matter in our audit of the standalone financial statements. . ||Obtaining understanding of basis of valuation adopted in respect of fair value investment and ensured that valuation techniques used are appropriate in circumstances and for which sufficient data are available to measure fair value. |
|Valuation accuracy completeness and disclosures pertaining to inventories with reference to IND AS 2. ||Assessed the appropriateness of the discloser in the standalone financial statements in accordance with the applicable financial reporting framework. |
|Inventories constitutes material component of Financial Statement. Correctness completeness and valuation are critical for reflecting true and fair financial results of operations. ||Our audit procedures included among others the following: |
| ||We assessed the company's process regarding maintenance of records valuation and accounting of transactions relating to inventory as per the Ind AS 2. |
| ||We have evaluated the design of internal controls relating to recording and valuation of inventory. |
| ||We have carried out substantive audit procedures at financial and assertion level to verify the allocation of overheads to inventory. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for other information. The otherinformation comprises the information included in the management Discussion and AnalysisBoard's Report Including Annexures to Board's Report Business Responsibility ReportCorporate Governance Report and Shareholder Information but does not include thestandalone financials statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Managements' Responsibilities for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risk of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order todesign 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 has adequateinternal financial controls systems in place and the operating effectiveness of suchcontrols.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertainty exitsrelated to events or conditions that may cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exits we arerequired to draw attention in our auditor's report to the related disclosures in theStandalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatement in the standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Financial Statements may be influenced. We considerquantitative materiality and qualitative factors in (i) Planning the scope of our auditwork and in evaluating the results of our work; and (ii) To evaluate the effect of anyidentified misstatement in the Financial Statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including andsignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we may havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
Report on Other Legal and 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' statement on the mattersspecified in paragraphs 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 it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome Statement of changes in equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the books of accounts.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.
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". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 its financialposition in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT
(Referred to in Paragraph 1 under the heading of "Report on other Legal andRegulatory Requirements" of our report to the members of Lovable Lingerie Limited ofeven date)
Report on the Companies (Auditor's Report) Order 2016 issued in terms of Section143(11) of the Companies Act 2013 ("the Act") of Lovable Lingerie Limited("the Company"):
i. In respect of company's property plant and equipment:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment. b. All propertyplant and equipment have not been physically verified by the management during the yearbut there is a regular program of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such verification. c. According to the information and explanations givenby the management the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.
ii. As explained to us management has conducted physical verification of inventory atregular intervals during the year. In our opinion and according to the information andexplanations given to us the procedures of physical verification of inventory followed bythe Management were reasonable and adequate in relation to the size of the Company andnature of its business. No material discrepancies were noticed on such physicalverification.
iii. According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties listed in the register maintained under Section 189 of the Companies Act2013. Accordingly the provisions of clauses 3(iii) (a) (b) and (c) of the order are notapplicable to the Company.
iv. In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedby the company.
v. The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India provision of Section 73 to 76 of the Actany other relevant provision of the Act and the relevant rules framed thereunder.Therefore paragraph 3(v) of the Order is not applicable.
vi. To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under clause 148(1) of the Companies Act 2013for the products/services of the Company. Thus reporting under clause 3(vi) of the orderis not applicable to the Company.
vii. According to information and explanations given to us in respect of statutorydues:
a. The Company has been generally regular during the year in depositing undisputedstatutory dues including provident fund income-tax employees' state insurance goodsand service tax cess and other statutory dues applicable to it to the appropriateauthorities. The provisions relating to duty of excise are not applicable to the Company.
b. There were no undisputed amounts payable in respect of provident fund employees'state insurance income-tax goods and service tax cess and other statutory duesoutstanding at the year end for a period of more than six months from the date theybecame payable.
c. Details of dues of income-tax sales-tax service tax duty of custom value addedtax goods and service tax and cess which have not been deposited as on March 31 2021 onaccount of disputes are given below:
|Name of Statue ||Nature of Dues ||Amount* (Rs.) ||Period to which amount relates ||Forum where disputes is pending |
|Customs Act ||Custom Duty ||1942798 ||AY 2010-11 ||Commissioner Of Customs Bengaluru |
*The amount indicated is after reducing of Rs. 2777000/- which has been paid underprotest.
viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued debentures. Hence reporting under clause 3(viii)of the Order is not applicable to the Company.
ix. In our opinion and according to the information and explanation given by themanagement we are of the opinion that money raised by Company by way of term loan hasbeen applied for the purpose for which they were raised. The Company did not raise anymoney by way of Initial Public offer or further public offer.
x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the company by its officers oremployees has been noticed or reported during the year.
xi. According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Therefore paragraph 3(xii) of the Order is not applicableand hence not commented upon.
xiii. According to the information and explanations given by the managementtransactions with the related parties are in compliance with Sections 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.
xv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Companies Act 2013.
xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
Annexure "B" to the Auditors' Report
(Referred to in Paragraph 2(f) under the heading of "Report on other Legal andRegulatory Requirements" of our report to the members of Lovable Lingerie Limited ofeven date)
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 March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Managements' Responsibility for Internal Financial Controls
The Management of the Company 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial 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. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
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 over financial 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 proceduresselected depend on the auditor's judgment 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 systemover financial 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 purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting 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 authorizations ofmanagement and directors of the company; and (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 risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
|For DMKH & CO. |
|Chartered Accountants |
|Firm Registration Number: 116886W |
|Manish Kankani |
|Membership Number: 158020 |
|UDIN: 21158020AAAAIZ7008 |
|Place: Mumbai |
|Date: 25th June 2021 |