The Shareholders of
Panache Innovations Limited
105 Primus Business Park
Plot No. A-195 Rd. No. 16A
Wagle Industrial Estate Thane
We have audited the accompanying Ind AS financial statements of PanacheInnovations Limited (the Company) which comprises the Balance Sheet as at31st March 2022 the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flow for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as the Ind AS FinancialStatements).
In our opinion and to the best of our information and according to theexplanations given to us by the management of the Company the aforesaid Ind AS FinancialStatements give the information required by the Companies Act 2013 ('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 2022 and its profit (including Other Comprehensive Income) changes in equity andstatement of cash flows for the year ended on that date.
Basis of Our Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial 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 (ICAI) together with the ethical requirements that are relevant to ouraudit of the Ind AS Financial Statements under the provisions of the Act 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.
Key Audit Matters
Key audit matters (KAM') are those matters that in ourprofessional judgment were of most significance in our audit of the financial statementsof the current period. These matters were addressed in the context of our audit of the IndAS Financial Statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters.
|Key Audit Matter ||How our audit addressed the Key audit Matter |
|Applicability of Ind AS 116 Leases || |
|As described in Note-1(14) to the financial statements the company has applied Ind AS 116 Leases in the current year. The application to this accounting standard is complex and is an area of focus in our audit since application of the same is based o n a significant level of judgments and estimates including the determination of discount rates and lease term. ||Our audit procedures on Applicability of Ind AS 116 include: |
| ||Assessed and tested new processes and controls established by the management in identifying lease arrangements with respect to accounting standard (Ind AS 116); |
| ||Assessed the company's evaluation on identification of leases based on the contractual arrangements and our knowledge of business; |
|As per Ind AS 116 In case of Finance Lease lessee is required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. ||Assessed the key terms and conditions of each lease with the underlying lease contracts; and |
|Moreover as per Ind AS 116 short term or low value lease is to be classified as operating lease. Additionally the standard mandates detailed disclosures in respect of transition. Refer to Note No.1(14) and Note No.39 of the Ind AS Financial Statements ||Assessed and tested the p resentation and disclosures provided by the management in the Ind AS Financial Statements relating to Ind AS 116 including disclosures relating to transition and practical expedients applied. |
Information other than the Financial Statements and Auditor'sReport thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual Reportbut does not include the financial statements and our auditor's report thereon. TheAnnual Report is expected to be made available to us after the date of this auditor'sreport. Our opinion on the financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. When we read the Annual Report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters inSection 134(5) of the Act with respect to the preparation of these Ind AS financialstatements that give a true and fair view of the financial position and financialperformance (including other comprehensive income) statement of changes in equity andstatement of Cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Ind AS Financial Statements the management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibility for the Audit of Ind AS FinancialStatements
Our objectives are to obtain reasonable assurance about whether the IndAS Financial Statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Ind AS Financial Statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind ASFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls and operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting 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 uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern.
If we conclude that a material uncertainty exists we are required todraw attention in our auditor's report to the related disclosures in the Ind AS financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor'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 ofthe Ind AS financial statements including the disclosures and whether the Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020(the Order) issued by 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 thematters specified 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 best of ourknowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) Statement of changes in equity and Statement of Cash flow dealtwith by this Report are in agreement with the books of account;
d. In our opinion the aforesaid Ind AS Financial Statements complywith the Indian Accounting Standards specified under Section 133 of the Act read withcompanies (Indian Accounting Standards) Rules2015 as amended;
e. On the basis of written representations received from the directorsas on 31st March 2022 and taken on record by the Board of Directors none ofthe directors are disqualified as on 31st March 2022 from being appointed as adirector in terms of Section 164(2) of the Companies Act 2013;
f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in Annexure B. Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according toexplanations given to us:
(i) The Company does not have any pending litigations which wouldimpact its financial position except the contingent liability in terms of MVAT demand ofRs. 6780775/- for which the company has preferred an appeal as referred in note no. 36of the Financial Statement;
(ii) The Company did not have any long-term contracts for which therewere any material foreseeable losses.
(iii) The Company is not required to transfer any amount to theInvestor Education and Protection Fund by the Company.
ANNEXURE - A TO THE AUDITOR'S REPORT FOR THE Y. E. 31ST MARCH2022 (Referred to in Paragraph (1) of our Report of even date)
(i) In respect of the Company's Property Plant and Equipment andIntangible Assets:
a) The Company has generally maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment& Intangible Assets and relevant details of Right of Use Assets.
b) The Property Plant and Equipment are physically verified by themanagement in a phased manner; which in our opinion is reasonable having regard to thesize of the company and the nature of its assets. Pursuant to the program all theProperty Plant and Equipment were physically verified by the management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
c) Based on the information & explanation given to us and therecords examined by us we are able to conclude that there is no immovable property held bythe company as on the reporting date.
d) The Company has not revalued its Property Plant and Equipment(including Right of Use Assets) or Intangible assets or both during the year.
e) In our opinion and according to the information and explanationsgiven to us no proceedings have been initiated or are pending against the Company forholding any benami property under the Benami Transactions (Prohibition) Act 1988 andrules made thereunder.
(ii) a) Based on the information & explanation given to us and therecords examined by us the physical verification of inventory & spares has beenconducted at reasonable intervals by the management and no material discrepancies werenoticed on such verification between physical stock and book records.
b) The Company has been sanctioned Cash Credit and Guaranteed Emergencycredit Line from Canara Bank on the basis of hypothecation of Stock and Book debts of Rs.2.58 crores.
c) The Company files monthly statements with Canara Bank in agreementwith the books of accounts of the Company with regards to valuation of Stock and Bookdebts of the company in respect of Cash credit availed.
(iii) a. In our opinion and according to the information andexplanations given to us the Company has recovered loans secured or unsecured from anentity(company) given in previous years which are outstanding as on the reporting date.The details of such recovery of loans given are as follows :
|Name of the Entity ||Aggregate amount recovered during the year ||Balance Outstanding as on 31st March 2022 |
|Karrm Warehousing Private Limited ||Rs. 1633583/- ||Rs. 27996538/- |
b. In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company the termsand conditions of the grant of all loans and advances are not prejudicial to the company'sinterest.
c. In respect of loans and advances in the nature of loans theschedule of repayment of principal and payment of interest has been stipulated andrepayments are not regular.
d. In our opinion and according to the information and explanationsgiven to us there are some amounts overdue for more than ninety days which casts toaggregate amount of Rs.28302357/- as on reporting date.
e. During the year the following loan or advance has fallen due duringthe year has been renewed extended fresh loan granted to settle the overdue of existingloans given to the same parties.
f. The Company has granted any loans or advances in the nature of loanseither repayable on demand or without specifying any terms or period of repayment duringprevious financial years.
The Company has not provided any guarantee or security or granted anyadvances in the nature of loans secured or unsecured to companies firms LimitedLiability Partnerships or any other parties.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 of the Act. Inrespect of grant of loans making investments and providing guarantees and securitiesduring the year as referred in Section 186 of the Companies Act 2013 the company hasfailed to comply with this provision of the Act as:
1) Any prior approval from Banks / Public Financial Institutionviz. Canara Bank is not on the record.
2) The Company's Loans & Advances are in excess oflimits specified u/s. 186(2) of the Companies Act2013. The company had represented thatit had passed a special resolution in a general meeting of the members:
|NAME OF THE ENTITY ||AS AT 3 1 MARCH 2022 ||NATURE ST OF ASSISTANCE ||PURPOSE FOR WHICH LOAN/ GUARANTEE IS PROPOSED TO BE UTILISED BY RECEIPIENT |
|Karrm Warehousing Private Limited ||Rs. 27996538/- ||Inter Corporate Loan ||Short Term Working Capital |
|Sure Horizon Softtech End2End Solution Pvt Ltd ||Rs. 188054/- ||Inter Corporate Loan ||Short Term Working Capital |
|Greatmoon Trading Private Limited ||Rs. 117065/- ||Inter Corporate Loan ||Short Term Working Capital |
(v) According to the information and explanations given to us theCompany has not accepted any deposits from the public to which the directives issued bythe Reserve Bank of India and the provisions of Section 73 to Section 76 or any otherrelevant provisions of the Companies Act 2013 and the rules framed there under areapplicable.
(vi) According to the information and explanations given to us theCompany is not required to maintain any cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013.
(vii) a. According to the information and explanations given to us theCompany is regular in depositing undisputed statutory dues including provident fundIncome tax GST custom duty cess and any other statutory dues with the appropriateauthorities during the year. b. According to the information and explanations given to usno undisputed amounts payable in respect of such statutory dues were outstanding as on 31stMarch 2022 for a period of more than six months from the date they became payable exceptfor following:
|NAME OF DUES ||AMOUNT |
|TDS on Interest ||3 750/- |
(viii) On the basis of our examination and according to the informationand explanations given to us there were no such transactions which are unrecorded in theaccounts by the Company which have been disclosed or surrendered before the taxauthorities as income during the year.
(ix) On the basis of our examination and according to the informationand explanations given to us the Company has not defaulted in re-payment of its dues tothe Banks and no amounts were borrowed by the Company through Debentures from anyfinancial institution.
(x) A. On the basis of our examination and according to the informationand explanations given to us the Company has not raised any money through Initial PublicOffer (IPO) or Further Public Offer (FPO) during the year.
B. During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally).
(xi) To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud by the company or on the company by itsofficers or employees has been noticed or reported during the course of our audit.
(xii) In our opinion and according to the information and explanationgiven to us the company is not a nidhi company and hence reporting under paragraph 3(xii)of the Order is not applicable to our company.
(xiii) In our opinion and according to the information and explanationgiven to us all the transactions with related parties are in compliance with sections 177and 188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) On the basis of our examination and according to the informationand explanations given to us the Company has an internal audit system commensurate withthe size and nature of its business.
(xv) To the best of our knowledge and belief and according to theinformation and explanations given to us the company has not entered into any non-cashtransactions with directors or persons connected with him.
(xvi) In our opinion and according to the information and explanationgiven to us the company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934. (xvii) a. In our opinion and according to the informationand explanation given to us the Company has not incurred any cash losses in the currentyear. b. However the Company has incurred cash loss of Rs 784804/- (after tax) in theimmediately preceding Financial Year 2020-21.
(xviii) There has been no resignation of the statutory auditors of theCompany during the year and hence this clause is not applicable.
(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis 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 thedate of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.
(xx) In our opinion and according to the information and explanationgiven to us the provisions of Corporate Social Responsibility are not applicable to theCompany.
ANNEXURE -B TO THE AUDITOR'S REPORT FOR THE Y. E. 31STMARCH 2022
(Referred to in Paragraph (2)(f) of our Report of even date)
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act) We haveaudited the internal financial controls over financial reporting of Panache InnovationsLimited (the Company) as of 31st March 2022 in conjunction with ouraudit of the Ind AS 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 safeguardingof its 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 internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note) and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Ind AS financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) p rovide reasonable assurance that transactions are recorded asnecessary to permit preparation of Ind AS financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of the companyare being made only in accordance with authorizations of management and directors of thecompany; and
(3) p rovide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2022 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
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For Jain Salia & Associates
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[ FRNo: 116291W ]
|Place : Mumbai || |
|Dated : 30th May 2022 || |
(CA Jayesh K. Salia)
|UDIN : 22044039AJXOBA5799 || |
(Membership No. 044039)