We have audited the accompanying Ind AS financial statements of Panache Digilife Limited
("the Company”), which comprises the Balance Sheet as at 31st March, 2025, the Statement
of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity
and Statement of Cash Flow for the year ended on that date and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information (hereinafter referred to as "Ind AS Financial Statements”).
Opinion
In our opinion and to the best of our information and according to the explanations given to
us by the management of the Company, the aforesaid Ind AS financial statements give the
information required by the Companies Act, 2013 ('the Act') in the manner so required and
give a true and fair view in conformity with the Indian Accounting Standards under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules,2015 as
amended, ("Ind AS”) and other accounting principles generally accepted in India, of the state
of affairs of the Company as at 31st March 2025, and its profit (including Other
Comprehensive Income), changes in equity and its cash flows for the year ended on that
date.
Basis of Our Opinion
We conducted our audit of the Ind AS financial statements in accordance with the Standards
on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Ind
AS financial statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India, ("ICAI”) together with the ethical requirements that are relevant to our audit of the Ind
AS financial statements under the provisions of the Act and the Rules thereunder, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and the
ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Key Audit Matters
Key Audit Matters ("KAM”) are those matters that, in our professional judgment, were of
most significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the Ind AS Financial Statements as a
whole, and in forming our opinion thereon and we do not provide a separate opinion on
these matters.
|
Key Audit Matter
|
How our audit addressed the Key Audit
Matter
|
|
1. Issue of Additional Equity Shares
Promoters.
|
o Investors and Equity Warrants to the
|
|
During the year ended 31st March,2025,
the Company, as part of its capital raising
initiatives, has issued additional equity
shares to the investors on a preferential
basis and equity share warrants to the
promoters. These issuances were carried
out in accordance with the provisions of
Sections 42 and 62(1)(c) of the Companies
Act, 2013, and the applicable SEBI (Issue
of Capital and Disclosure Requirements)
Regulations, 2018. The equity warrants
entitle the holders (promoter) to apply for
equity shares at a future date at a pre¬
determined price.
We consider this a key audit matter due to
the material impact of these transactions
on the Company’s capital structure and
financial position, and the involvement of
significant judgments and estimates,
including:
• Determination of fair value of equity
shares and warrants.
• Compliance with regulatory and
procedural requirements under the
Companies Act, 2013 and SEBI
Regulations.
|
Our procedures included, but were not
limited to, the following:
• Reviewed Board and shareholders’
resolutions approving the issuance
of equity shares and warrants,
• Examined compliance with
applicable provisions of the
Companies Act, 2013, including
Sections 42 and 62, and SEBI
(ICDR) Regulations,
• Verified valuation reports issued by
an independent registered valuer to
assess the basis for determining
issue price,
• Inspected Form PAS-3 and other
related statutory filings with the
Registrar of Companies.
• Evaluated the accounting treatment
of proceeds received, including
classification between share
capital, securities premium, and
warrant money, including treatment
of expenses in relation to issue of
shares & warrants as per IndAS 32
para 37.
|
|
• Accounting treatment of equity
share capital, securities premium,
share application/warrant money
received, treatment of expenses in
respect of issue of shares &
warrants.
• Adequacy and accuracy of financial
statement disclosures relating to
these issuances.
|
• Assessed the disclosures in the
standalone financial statements,
including Notes to Accounts, to
ensure adequacy and compliance
with Schedule III to the Companies
Act, 2013 and applicable Indian
Accounting Standards.
(Refer Note No.16)
|
|
2. Wholly owned Subsidiary - Technofy Digital Private Limited being a non¬
going concern
|
|
In respect of Technofy Digital Private
Limited (Wholly owned Subsidiary of
Panache Digilife Limited), the accounts of
the company have been prepared based
on the assumption that the company is not
going concern for the year ended
31st March 2025, due to the following
reason:
The subsidiary company has a single and
significantly important asset i.e Leasehold
Land situated in Bilimora Industrial Area,
GIDC, Gujarat upon which it had planned
to operate its business, by way of either
leasing Part of the area to other entities
and/or setting up an IT Industry leading to
expansion of its Parent's business.
However, due to lockdown - alike situations
across the country due to the Covid-19
pandemic, these operations were not
considered feasible by the Company due
to low demand and simultaneous high
costs for setting up of business.
The Management is of the view that the
company may establish / carry out /
change / plan its business activity in future,
which will be time tested. But as far as
current year's Financial Statements are
concerned, the fundamental accounting
assumption of Going Concern continues to
be inappropriate as previous years.
|
We have carried out the following audit
procedures to address our key audit
considerations with respect to the said
matter; -
• Understood the objective of management
behind the considering the subsidiary as
not going concern.
• Evaluated the financials of the wholly
owned subsidiary and assessed the ability
of the subsidiary to repay the loan provided
by the company, thereby determining
whether any provision for credit losses was
required on such loan provided.
• Considered the liquidity of existing assets
on the balance sheet of wholly owned
subsidiary.
• Considered potential downside scenarios
and the resultant impact on available funds
of wholly owned subsidiary and promoters
capacity to fund the company.
• Tested whether the company has
complied with the provisions of the
companies act while providing such
financial assistance to the subsidiary.
• Made enquiries to administrators to
understand the factual content of
|
|
In respect of unsecure financial support to
the subsidiary, the Management has
represented that although the Subsidiary's
Going concern assumption is
inappropriate, there is high probability of
this amount getting recovered in the future.
Thus, no Provision for Impairment has
been created.
|
subsidiary been non-going concern. We
went through analyses prepared by
management and verified the facts in these
analyses and evaluated the conclusions
made.
|
|
Refer Note - 2 (9) of the Standalone
financial statements
|
|
| |
|
|
3. Import Purchases
|
|
As per Ind AS 2 “Inventories”, all direct
costs such as transportation cost to bring
the inventory to the factory and non¬
refundable taxes and duties is to be added
to the cost of inventory itself.
Also, as per Ind AS 21 “The effect of
Changes in Foreign Exchange Rate”, the
foreign currency transactions such as
Import Purchases or Payment to such
suppliers have to be recorded at spot rate
and their outstanding balances (which is a
monetary item) is also to be valued at rate
as on reporting date.
|
Our audit procedures include the following:
Assessed and tested the method of adding
the freight charges including air, sea and
other clearing charges as well as custom
duty paid to the authorities to the cost of
inventory.
Assessed and tested the company’s
application of Ind AS 21 with respect to
recording of such purchases and their
settlement either in advance or at a later
date.
We have also tested its application with
respect to the measurement of Import
creditors as on reporting date.
|
Emphasis of Matter Paragraph
We draw attention towards Note No. 12 (Loans & Deposits - current) of the notes to
the Statement of Standalone Audited Results for the year ended 31st March,2025. In
respect of Unsecured Loan outstanding from its wholly owned subsidiary Technofy
Digital Private Limited:
“The Outstanding amounts of unsecured loans given include balance of loans given to
wholly owned subsidiary - Technofy Digital Private Limited during the year amounting to
Rs. 1,35,94,484 at interest rate of 9%. The financial statements of Technofy Digital
Private Limited are prepared on 'non-going concern' basis. However, the management is
of the opinion that the loans given to the subsidiary would be recovered and accordingly,
no provision for expected credit loss has been provided for this loan."
Our opinion is not modified in respect of these matters.
Information other than the Financial Statements and Auditor’s Report thereon
The Company’s Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report but does not include
the financial statements and our auditor’s report thereon. The Annual Report is expected to
be made available to us after the date of this auditor’s report. Our opinion on the financial
statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements, our responsibility is to read
the other information identified above when it becomes available and, in doing so, consider
whether the other information is materially inconsistent with the financial statements, or our
knowledge obtained in the audit or otherwise appears to be materially misstated. When we
read the Annual Report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance. We have nothing to
report on in this regard.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters in Section 134(5) of the Act
with respect to the preparation of these Ind AS financial statements that give a true and fair
view of the financial position, financial performance (including other comprehensive income),
statement of changes in equity and statement of Cash Flows of the Company in accordance
with the Ind AS and other accounting principles generally accepted in India. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the company and for preventing and
detecting 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 adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS Financial Statements, the management is responsible for assessing
the Company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
management either intends to liquidate the Company or to cease operations or has no
realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financial
reporting process.
Auditor’s Responsibility for the Audit of Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor's report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these Ind AS financial statements.
As a part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We, also:
> Identify and assess the risks of material misstatement of the Ind AS financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations or the override of internal
control.
> Obtain an understanding of internal control relevant to the audit in order to design 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 the Company has an
adequate internal financial controls system in place and the operating effectiveness of
such controls.
> Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
> Conclude on the appropriateness of the management's use of the Going Concern basis
of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Company's ability to continue as a going concern. If we conclude that material
uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the Ind AS financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are 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 to continue as a going concern.
> Evaluate the overall presentation, structure and content of the Ind AS financial
statements, including the disclosures, and whether the Ind AS financial statements
represent the underlying transactions and events in a manner that achieves 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 the matters 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
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 it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive
income), Statement of changes in equity and Statement of Cash flow dealt with by this
report are in agreement with the books of account.
d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian
Accounting Standards specified under Section 133 of the Act, read with companies
(Indian Accounting Standards) Rules,2015, as amended.
e. On the basis of written representations received from the directors as on 31st March 2025
and taken on record by the Board of Directors, none of the directors are disqualified as on
31st March 2025, from being appointed as a director in terms of Section 164(2) of the
Companies Act, 2013.
f. With respect to the adequacy of the internal financial controls over financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate
report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and
operating effectiveness of the Company’s internal financial controls over financial
reporting.
g. With respect to the other matters to be included in the Auditor’s Report in accordance
with the requirements of section 197(16) of the Act, as amended.
In our opinion and to the best of our information and according to the explanations given
to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor’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 to explanations given to us:
(i) The Company does not have any pending litigations which would impact on its
financial position except sub judice matter under the Goods & Service Tax Act, 2017
for demand raised under the assessment of GST for the F.Y. 2017-18, 2018-19 &
2019-20 and under the Customs Tariffs Act, 1975 for the matter of incorrect
classification of product imported.
(ii) The Company did not have any long-term contracts for which there were any
material foreseeable losses.
(iii) The Company has transferred unclaimed dividend for F.Y. 2016-17 to the Investor
Education and Protection Fund (IEPF) established by the Central Government, apart
from this there is nothing required to transfer any amount to the Investor Education
and Protection Fund by the Company.
(iv)
a. The Management has represented that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been
advanced or loaned or invested (either from borrowed funds or share premium or
any other sources or kind of funds) by the Company to or in any other person or
entity, including foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b. The Management has represented, that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been
received by the Company from any person or entity, including foreign entity
("Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party("Ultimate Beneficiaries”) or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
c. Based on the audit procedures that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused
us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as
provided under(a)and (b) above, contain any material misstatement.
(v)
a. No dividend had been proposed in the previous year, which was required to be
paid by the Company during the year in accordance with section 123 of Act.
b. The Board of directors of the company does not intend to propose any final dividend
for the year.
(vi) Based on our examination which included test checks, the Company has used
accounting software for maintaining its books of account for the financial year
ended 31st March 2025, which has a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant transactions
recorded in the software. Further, during our audit, we did not come across any
instance of audit trail feature being tampered with.
Additionally, the audit trail in respect of prior year has been preserved by the
company as per the statutory requirements under the proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014 r.w. reporting under Rule 11(g) of Companies
(Audit and Auditors) Rules, 2014.
For Jain Salia & Associates
Chartered Accountants
[ FRNo: 116291W ]
Place : Mumbai Partner
Date : 13.05.2025 (CA Jayesh K. Salia)
UDIN: 25044039BMJIAI1597 (Membership No. 044039)
|