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Auditor Report of Lovable Lingerie Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Lovable Lingerie Limited ('the Company') which comprise the balance sheet as at 31 March 2015, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters 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 best of 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 the Company so far as appears from our examination of those books and proper returns adequate for 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 dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

(i) The Company has disclosed the impact of pending litigations on its financial positions in its financial statement:- Refer note No. 12 to the financial 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 not arise.

(iii) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

ANNEXURE OF AUDITOR'S REPORT

Annexure referred to in our report to the members of LOVABLE LINGERIE LIMITED on the accounts for the year ended 31st March, 2015.We report that:

(i) In respect of its fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Fixed assets were been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) In respect of its inventory

a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and according to information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of accounts.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 189 of the Companies Act, 2013, according to the information and explanation given to us:

The company has not granted any such loans accordingly;

sub-clause a. relating to payment of principal and interest; and

sub-clause b. relating to steps of recovery/repayment taken, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted deposit within the meaning of the provisions of sections 73 to 76 or any other relevant provisions of the Co. Act, 2013 and the Companies (Acceptance of Deposits) Rules, framed there under. According to the information and explanations given to us no order has been passed by the Company Law Board, or National Company Law Tribunal or Reserve bank of India or any court or any other tribunal.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by Central Government prescribing the maintenance of cost records under section 148(1) of the Companies Act, 2013. We are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate.

(vii) According to information and explanations given to us and records produced in respect of statutory dues:

a. (i) The Company has generally been regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, investor education and protection fund, Employees state insurance, income-tax, sales tax, Wealth tax, custom duty, excise duty, service tax, value added tax, cess and other material statutory dues applicable to it.

(ii) There were no undisputed amounts payable in respect of sales tax, income tax, customs duty, wealth tax, service tax, value added tax and other material statutory dues applicable to the Company that were in arrears as at March 31st 2015 for a period of more than six months from the date they became payable.

b. There are no dues in respect of sales tax, income tax, customs duty, wealth tax, service tax, excise duty, value added tax, cess and other material statutory dues that have not been deposited on account of any dispute excepting those mentioned hereunder:

Name of Statue Nature of Dues Amount (Rs.)

Customs Act Demand *19,42,798

Income Tax Act Asst. Demand 9,54,730

Income Tax Act Asst. Demand 30,70,130

Income Tax Act Asst. Demand 25,05,750

Name of Statue Period to which Forum where dispute amt. relates is pending

Customs Act 2010-11 Com. Of Customs, Bengaluru

Income Tax Act AY 10-11 ITAT, Mumbai

Income Tax Act AY 11-12 ITAT, Mumbai

Income Tax Act AY 12-13 CIT (A), Mumbai

The amount indicated is after reducing of Rs. 27,77,000/-which has been paid under protest.

c. There has not been any occasion in case of the company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

(viii)The Company does not have any accumulated losses at the end of the financial year and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institution or debenture holders.

(x) In our opinion and according to information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xi) In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

(xii) To the best of our knowledge and according to information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of audit.

For VINOD KUMAR JAIN & CO.

Chartered Accountants,

FRN111513W

Vinod Kumar Jain

Proprietor M. No. 36373

Place: Mumbai

Dated:


Mar 31, 2014

We have audited the accompanying financial statements of Lovable Lingerie Limited (''the Company'') which comprise the balance sheet as at 31st March 2014, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"), read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors Responsibility

Our Responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the 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, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2 As Required by section 227(3) of The Companies Act, 1956, We report that:

a- We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b- In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books;

c- The Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d- In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash flow statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956, read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e- on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE OF AUDITOR''S REPORT

Annexure referred to in our report to the members of LOVABLE LINGERIE LIMITED on the accounts for the year ended 31st March, 2014. We report that:

i. In respect of its fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Fixed assets were been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c. During the year, the company has disposed off a vehicle out of its fixed assets, however, the same has not affected it as a going concern.

ii. In respect of its inventory

a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and according to information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of accounts.

iii. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us:

The company has not granted any such loans accordingly;

sub-clause a. relating to number of parties and amount involved;

sub-clause b. relating to rate of interest and term and conditions thereto;

sub-clause c. relating to payment of principal and interest; and

sub-clause d. relating to steps of recovery/repayment taken, are not applicable.

d.In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us;

e. The Company has taken unsecured loans from one party covered in register maintained under section 301 of the Companies Act, 1956. At the year end the outstanding balance of such loans taken was NIL and the maximum amount outstanding during the year was Rs. 1,25,00,000/-.

f. In our opinion the rate of interest and other terms and conditions of such loans taken are, in our opinion, prima facie not prejudicial to the interest of the company.

g. In our opinion the Company is regular in payment of the principal amount and as regards interest the same is free of interest.

i. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

j. In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a- The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register maintained under the said section have been so entered.

b- Having regard to the explanations that some of items purchased, sold or services availed are of special nature for which comparable alternative price are not available, the transactions made in pursuance of contracts or arrangements exceeding value of Rs. 5 Lakhs in respect of each party during the year have been made at prices which appears reasonable as per the information available with the company.

In our opinion and according to the information and explanations given to us, the company has not accepted deposit within the meaning of the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. According to the information and explanations given to us no order has been passed by the Company Law Board, or National Company Law Tribunal or Reserve bank of India or any court or any other

In our opinion, the company has internal audit system commensurate with the size and nature of its business.

We have broadly reviewed the books of account maintained by the company pursuant to the rules made by Central Government prescribing the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate.

According to information and explanations given to us and records produced in respect of statutory dues:

a. The company has generally been regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, investor education and protection fund, Employees state insurance, income-tax, sales tax, Wealth tax, custom duty, excise duty, service tax, cess and other material statutory dues applicable to it.

b. There were no undisputed amounts payable in respect of sales tax, income tax, customs duty, wealth tax, service tax and other material statutory dues applicable to the Company that were in arrears as at March 31st 2014 for a period of more than six months from the date they became payable.

c. There are no dues in respect of sales tax, income tax, customs duty, wealth tax, service tax, excise duty, cess and other material statutory dues that have not been deposited on account of any dispute excepting those mentioned hereunder:

Forum where the dispute Name of Statute Amount F.Y. to which the is pending In Rs. amount relates to

Commissioner of Customs Customs Act 19,42,798/- 2010-11 Bengaluru

Commissioner of Income Income Tax 9,54,730/- 2009-10

Tax Appeals 39,44,380/- 2010-11

The amount indicated is after reducing of Rs. 27,77,000/- which has been paid under protest.

The Company does not have any accumulated losses at the end of the financial year and it has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institution or debenture holders.

According to information and explanations given to us and based on documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clauses 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 (as amended) are not applicable to the Company.

In our opinion and according to information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly the provisions of clause 4 (xv) of the Companies (Auditor''s Report) Order 2003 (as amended) are not applicable to the Company.

In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

In our opinion and according to information and explanations given to us, and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment.

In our opinion and according to information and explanations given to us, the company has not made preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

In our opinion and according to information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

The company has raised money through pre IPO and IPO issue during the year March 2011. The company has disclosed the end use of money raised by public issue of equity shares in the given in note on financial statement''s schedule to the financial statements and the same has been verified by us.

To the best of our knowledge and according to information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For Vinod Kumar Jain & Co Chartered Accountants FRN 111513W

Vinod Kumar Jain Proprietor. M. No. 36373

PLACE: Mumbai DATED: 29th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Lovable Lingerie Limited (''the Company'') which comprise the balance sheet as at 31st March 2013, the Statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act").This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors Responsibility

Our Responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the 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, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As Required by section 227(3) of The Companies Act, 1956, We report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet and the Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash flow statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; and

e) on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE OF AUDITOR''S REPORT

Annexure referred to in our report to the members of LOVABLE LINGERIE LIMITED on the accounts for the year ended 31st March, 2013. We report that:

(i) In respect of its fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The Fixed assets were been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. During the year, the Company has not disposed off any of its fixed assets, as such question of affecting it as going concern does not arise.

(ii) In respect of its inventory

a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of accounts.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us:

The company has not granted any such loans accordingly; sub-clause a. relating to number of parties and amount involved;

sub-clause b. relating to rate of interest and term and conditions thereto;

sub-clause c. relating to payment of principal and interest; and

sub-clause d. relating to steps of recovery/repayment taken, are not applicable.

In respect of loans, secured or unsecured, taken by the Company from Companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanation given to us;

The company has not taken any such loans accordingly; sub-clause e. relating to number of parties and amount involved; sub-clause f. relating to rate of interest and term and conditions thereto; and sub-clause g. relating to payment of principal and interest, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301

of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a. The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register maintained under the said section have been so entered.

b. Having regard to the explanations that some of items purchased, sold or services availed are of special nature for which comparable alternative price are not available, the transactions made in pursuance of contracts or arrangements exceeding value of Rs. 5 Lakhs in respect of each party during the year have been made at prices which appears reasonable as per the information available with the Company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposit within the meaning of the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. According to the information and explanations given to us no order has been passed by the Company Law Board, or National Company Law Tribunal or Reserve bank of India or any court or any other tribunal.

(vii) In our opinion, the Company has internal audit system commensurate with the size and nature of its business

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by Central Government prescribing the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same with a view to determining whether they are accurate.

(ix) According to information and explanations given to us and records produced in respect of statutory dues:

a. The Company has generally been regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor education and protection fund, Employees state insurance, income-tax, sales tax, Wealth tax, custom duty, excise duty, service tax, cess and other material statutory dues applicable to it.

b. There were no undisputed amounts payable in respect of sales tax, income tax, customs duty, wealth tax, service tax and other material statutory dues applicable to the Company that were in arrears as at March 31st 2013 for a period of more than six months from the date they became payable.

* The amount indicated is after reducing of Rs. 27,77,000/- which has been paid under protest.

(x) The Company does not have any accumulated losses at the end of the financial year and it has not

incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institution or debenture holders.

(xii) According to information and explanations given to us and based on documents and records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clauses 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly the provisions of clause 4 (xv) of the Companies (Auditor''s Report) Order 2003 (as amended) are not applicable to the Company.

(xvi) In our opinion and according to information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

(xvii) In our opinion and according to information and explanations given to us, and on an overall examination of the balance sheet of the Company, we report that part of the working capital funds were temporarily utilized for acquiring fixed assets.

(xviii) In our opinion and according to information and explanations given to us, the Company has not made preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) In our opinion and according to information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

(xx) The Company has raised money through pre IPO and IPO issue during the year March 2011. The company has disclosed the end use of money raised by public issue of equity shares in note on financial statement of Schedule No. 24 to the financial statements and the same has been verified by us.

(xxi) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For VINOD KUMAR JAIN & CO.

Chartered Accountants,

FRN 111513W

Place : Mumbai Vinod Kumar Jain

Date: 28 MAY 2013 Proprietor M. No. 36373


Mar 31, 2012

We have audited the attached Balance sheet of Lovable Lingerie Limited as at 31st March 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion.

As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

Further to our comments in the Annexure referred to in paragraph 3 above, we state that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement referred to in this report is in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

e) On the basis of the written representation received from the Directors, and taken on record by Board of Directors, we report that none of the director is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and as per the information and according to the explanations given to us, the said accounts, read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in the case of Balance Sheet, of the state of affairs of the Company as on 31st March 2012.

(ii) in the case of Statement of Profit and Loss Account, of the Profit of the Company for the year ended on that date and

(iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date;

Annexure Referred to in paragraph 3 of the Auditor's Report to the members of Lovable Lingerie Limited for the year ended on 31st March 2012.

1. [a] The Company has maintained proper records showing full particulars including quantitative details and location of the Fixed Assets.

[b] There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

[c] The Company has not disposed off substantial part of fixed assets during the year.

2 [a] Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

[b] The procedures of physical verification of stocks followed by the management are adequate in relation to the size of the Company and the nature of its business.

[c] The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and has been properly dealt in the books of account.

3 According to the information and explanations given to us the Company has neither taken for granted any loan secured or unsecured, from/to companies, firms or other listed in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw material including components, packing materials, plant and machinery, equipment and other assets and with regard to sale of goods. There is no major weakness in the internal control procedures.

5. In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, aggregating during the year ended toRs. 5,00,000/- or more, in respect of any party have been made at a price which are reasonable having regard to prevailing market price, at the relevant time

6. The company has not accepted any deposits from the public within the meaning of Section 58Aand 58AA of the Act and the rules framed there under.

7. We are informed that the Company has the internal audit system in addition to the existing internal control procedure.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government, prescribing the maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been maintained and are being made up. We have not however, made a detailed examination of the same with a view to determining whether they are accurate.

9. According to the information and explanation given to us and records as produced and examined by us, in our opinion the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Funds, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues which have not been deposited on account of any dispute excepting those mentioned hereunder:

Forum where the dispute is Amount in FY to which the amounts pending Name of the Statute Rs. relate to

Commissioner of Customs, Customs Act 4,719,798/- 2010-2011 Bangaluru

10. Company has neither accumulated losses nor has it incurred cash loss in the financial year under report and in the immediately preceding financial year.

11. On the basis of the records examined by us and the information and explanations given to us the company has not defaulted in repayment of dues to financial institutions and banks.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a chit fund, nidhi, mutual benefit fund or society the provision of clause 4 [xiii] of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4[xiv] of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

15. According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. Based on the information and explanation given to us by the management, term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations received, the Company has not applied short-term borrowings for long-term use.

18. According the information and explanation given to us, the Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has raised money through Pre IPO and IPO issue during the year March 2011. The Company has disclosed the end use of money raised by public issue of Equity Shares in Note No.12 of Schedule -24 to the financial statements and the same has been verified by us with regards to the Prospectus filed and as disclosed in the Directors' Report.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For Attar & Co.

Chartered Accountants

Firm Registration NO.112600W

M.F.Attar

Proprietor

Membership No.034977

Date: 14th May, 2012

 
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