We have audited the accompanying Standalone financial statements of “M/s. Forcas Studio Limited” which comprises
the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss and the Statement of Cash Flow for the period
then ended, Statement of changes in equity and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true
and fair view in conformity with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, Companies (Accounting Standards) Amendment Rules 2016 and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and its profit, and its
cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for
the Audit of the Standalone 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 standalone financial statements under the provisions of the Companies
Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit Matters
Key audit matters 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 financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For
each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the Financial Statements section of
our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed
to respond our assessment of the risks of material misstatement of the Financial Statements. The results of our audit
procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on
the accompanying Financial Statements.
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Description of Key Audit Matter
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How our audit addressed the key audit matter
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Revenue Recognition and Sales Returns in Online Business
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The Company is engaged in the business of
online sales of [apparel/fashion/lifestyle
products]. Revenue is a significant item in the
financial statements. In the online retail
model, there is an inherent risk relating to:
• Accurate recognition of revenue
considering the cut-off at year end.
• Recording of sales net of returns and
ensuring appropriate provision for
expected returns.
• Ensuring compliance with AS 9
“Revenue from Operation with
Customers”.
• Given the high volume of
transactions, dependence on IT
systems, and the nature of online
sales where customer returns are
common, revenue recognition and
provisioning for sales returns
required significant auditor judgment
and was therefore considered to be a
key audit matter.
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Our audit procedures included, among others:
• Evaluated the Company’s revenue recognition policy
and its compliance with the applicable accounting
standards.
• Tested the design and operating effectiveness of
internal controls relating to online sales and return
transactions.
• Performed substantive testing on a sample of sales
transactions to ensure revenue was recorded in the
correct period and at the correct amount.
• Verified year-end cut-off procedures for sales and
returns.
• Assessed the adequacy of provision for sales returns
by analyzing historical trends and post year-end return
patterns.
• Evaluated the appropriateness of disclosures made in
the financial statements in respect of revenue
recognition and returns.
Based on the above procedures, we found the management’s
revenue recognition and related provisioning for sales returns to
be reasonable.
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Existence and Valuation of Inventories
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As at 31st March 2025, the Company’s
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Our audit procedures included, among others:
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inventories comprise raw materials, work-in-
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progress, and finished goods stored at the
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• Obtained an understanding of the inventory accounting
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Company’s manufacturing facilities, third-
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policies and assessed compliance with the applicable
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party warehouses, and at
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accounting standards (AS 2 - Valuation of
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customer/consignment locations. Inventories
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Inventories).
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are material to the financial statements.
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• Evaluated the design and tested the operating
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effectiveness of controls over inventory recording and
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Key audit risks include:
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valuation.
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• Participated in year-end physical verification of
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• Existence: physical verification at
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inventories at selected locations and performed roll-
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multiple locations (including third-
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forward/roll-back procedures where required.
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party warehouses) and reliance on
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• For inventories lying with third parties, obtained direct
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confirmations.
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confirmations and/or performed alternate procedures
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• Valuation: appropriate application of
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(including reconciliation with subsequent movements).
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cost formula (FIFO), overhead
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• Verified costing methodology including allocation of
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absorption, and comparison with net
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overheads and tested a sample of inventory valuation
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realizable value.
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workings.
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• Cut-off and accuracy: ensuring
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• Assessed the reasonableness of management’s
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purchases, consumption, and finished
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estimates regarding net realizable value by examining
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goods are recorded in the correct
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selling prices and subsequent sales after year-end.
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period.
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• Evaluated adequacy of disclosures relating to
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inventories in the financial statements.
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Given the quantum, geographical spread, and
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judgment involved in valuation and NRV
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Based on the above procedures, we found management’s
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assessment, inventories have been considered
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assessment of existence and valuation of inventories to be
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a key audit matter.
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reasonable.
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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 Board’s report including Annexure to Board’s but does not include the standalone Financial
Statements and our auditor’s report thereon.
Our opinion on the standalone 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 standalone Financial Statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the standalone Financial Statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the
Act”) with respect to the preparation of these standalone 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. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of
appropriate implementation and maintenance of 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 financial statement that give a true and fair view and are free from material misstatement, whether due
to fraud or error.
In preparing the Standalone financial statements, 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 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 the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone 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 the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these Standalone Financial Statement.
As 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 standalone 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 Companies Act, 2013, we are also
responsible for expressing our opinion on whether the company has adequate internal financial controls
system in place and the operating effectiveness of such controls.
• Conclude on the appropriateness of Board of Directors 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 a material uncertainty exists, we are required to draw attention in our auditor's report to the
related disclosures in the 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 appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Evaluate the overall presentation, structure and content of the Standalone financial statements, including
the disclosures, and whether the Standalone financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (Revised 2022), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of
such checks of the books and records of the Company, 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 it
appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss, Changes in Equity and the Statement of Cash Flow 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 the written representations received from the directors for period 31st March, 2025 taken on
record by the Board of Directors, none of the directors is disqualified for the period 31st March, 2025 from
being appointed as a director in terms of Section 164(2) of the Act; and
f. With respect to unfavourable or qualified audit report of the company, refer to our audit report,
g. With respect to adequacy of internal financial controls over financial reporting of the Company and the
operating effectiveness of such controls, refer to our separate report in “Annexure B”.
h. 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 Companies Act, 2013, as amended, in our opinion and to the best of our information
and explanation given to us, the remuneration paid by company to its directors during the year is in
accordance with provisions of section 197 of the Act.
i. IPO Proceeds Utilisation:
The Company has raised ?37.44 crores via IPO on 22nd August, 2024. On examination of books of accounts
and other documents, we certify that the proceeds were utilised in accordance with the objects of the issue:
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Object
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Original Allocation
(? lakhs)
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Utilised
(? lakhs)
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Remarks
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Upgradation of
warehouse
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165.67
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100.02
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Balance ordered; bills of
?20.22 lakhs received
post BS date
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Prepayment/repayment
of loans
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1300.00
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1300.00
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Fully utilised
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Working capital
requirements
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1200.00
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1200.00
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Fully utilised
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General corporate
purposes
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843.33
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843.33
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Fully utilised
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Total
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3509
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3443.35
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j. 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 the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.
iii. There were no amounts which were required to be transferred 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 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(s) or entities, including foreign entities
("Intermediaries"), with the understanding that the intermediary shall whether directly or indirectly
lend or invest in other persons or entities identified in any manner by or on behalf of the company
(Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate
beneficiaries;
(b) The management has represented that to the best of its knowledge and belief no funds have been
received by the company from any person(s) or entities including foreign entities ("Funding Parties"
with the understanding that such 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 guarantee, security or the like on behalf of the
Ultimate beneficiaries; and
(c) Based on the audit procedures adopted 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 made by the Management under sub clause (a) and (b) above, contain any material
misstatement.
(v) No dividend declared or paid during the year by the Company as per section 123 of Companies Act
2013.
(vi) Based on our examination which included test checks, the Company has used an accounting
software for maintaining its books of account which has a feature of recording audit trail (edit log)
facility except that audit trail was not enabled at the database level to log any direct changes for the
accounting software used for maintaining the books of account. For accounting software for which
audit trail feature is enabled, the audit trail facility has been operating throughout the year for all
relevant transactions recorded in the software and we did not come across any instance of audit trail
feature being tampered with during the course of our audit.
For Agarwal Khetan & Co
Chartered Accountants
Firm Reg. No. 330054E
FCA Ritesh Agarwal
(Partner)
M. No. 311866
Place: Kolkata
Date: 27-05-2025
UDIN: 25311866BMIJZN8619
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