To The Members of
Osia Hyper Retail Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Osia Hyper Retail Limited("the Company") which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements"). In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid financial statements give the information required by the Companies Act2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Accounting Standards prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 the profit and loss and its cash flows for the year ended on that date.
Basis for opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143 (10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Key audit matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matter ||How our audit addressed the key audit matter |
|1 Inventory valuation || |
|Inventory were considered as a Key audit matter due to the size of the balance and because inventory valuation involves management judgement. According to company's accounting policies inventories are measured at the lower of cost or net realizable value. ||Our audit included but was not limited to the following audit procedures over inventory allowances: |
|At the end of each reporting period management of the Company assesses whether there is adequate provision for inventory losses on account of physical count net realizable value and obsolete inventory. ||- Understood the management process for cyclical physical countsand evaluated whether such processes are consistently followed. |
|In addition to the above the management adopts a cyclical count for physical verification of inventory which is a complex exercise owing to the nature of the inventory and the multiple locations covered by such cyclical counts. ||- Evaluated design and tested the operating effectiveness of controls implemented around above mentioned processes throughout the year. |
|Considering the complexities involved in cyclical physical verification of inventory and specific management judgements and estimates required with respect to slow moving and obsolete inventory allowance for inventory was determined to be a key audit matter for the current year audit. ||Cyclical physical counts: |
| ||- Inspected the management's inventory count records and observed physical inventory verification for locations selected based on materiality and risk considerations. |
| ||- Performed independent test counts to corroborate the management count for the locations selected as above. |
| ||- Tested the roll-forward of the cyclical counts performed by the management for locations where such counts were performed before the year end. |
| ||- Tested the adjustment made to books of accounts basis the results of the cyclical physical counts performed by the management. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon. Our opinion on thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our auditor otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud orerror. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are responsible for overseeingthe Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an auditing accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we reportthat :
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flowdealt with by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) oftheAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancialreporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
Annexure A to the Independent Auditors' Report
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the members of Osia Hyper Retail Limited of evendate)
Report on the Internal Financial Control under Clause (i) of sub- section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of Osia HyperRetail Limited(the company) as of March 31 2021 in conjunction with our audit ofthe financial statements of the company for the year ended on that date.
Management's Responsibility for Internal Financial Control
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards of Auditing issued by ICAI andprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls. These Standards and the Guidance Notes required that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls systems over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining and understanding of internal financial controls over financial reportingassessing the risk that material weakness exists and testing and evaluating the designand operating effectiveness of the internal control based on the assessed risk. Theprocedures selected depends on the auditors' judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis of our audit opinion of the company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of the management and directors of the company;
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Control over Financial Reporting
Because of the inherent limitations of internal financial control over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to fraud or error may occur and not be detected.Also projections of any evaluation of the internal financial control over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the ICAI.
Annexure - B to the Independent Auditors' Report
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the members of Osia Hyper Retail Limited of evendate)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:
i. In respect of the Company's fixed assets:
a. The Company has not maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The Company has a program of verification to cover all the items of its fixed assetsin a phased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. In accordance with this program certain fixedassets were physically verified during the year. According to information and explanationsgiven to us no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the Balance Sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the financial statements the lease agreements are in the name of theCompany.
ii. Physical verification of inventory has been conducted at reasonable intervals bythe management and as informed by the management that there is no material discrepancieswere noticed.
a. We obtained an understanding evaluated the design and tested the operatingeffectiveness of controls that the Company has in relation to valuation of inventory.
b. We performed testing on the Company's controls over the inventory count process. Intesting these controls we observed the inventory count process at selected store anddistribution centres on a sample basis inspected the results of the inventory count andconfirmed variances were accounted for and approved by management.
iii. According to the information and explanations given to us the Company has grantedunsecured loans to many bodies corporate covered in the register maintained under Section189 of the Companies Act 2013 in respect of which.
a. The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.
b. The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.
c. There is no overdue amount remaining outstanding as at the year-end
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
v. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2021 and therefore the provisions of the clause 3(v)of the Order are not applicable to the Company.
vi. The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under Clause 3(vi) of the order is not applicable to theCompany.
vii. According to the information and explanations given to us in respect of statutorydues :
a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxGoods and Service Tax Value Added Tax Customs Duty Excise Duty Cess and other materialstatutory dues applicable to it with the appropriate authorities.
b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Value Added Tax Goods and ServiceTax Customs Duty Excise Duty Cess and other material statutory dues in arrears as atMarch 31 2021 for a period of more than six months from the date they became payable. c.According to the records of the Company the dues of Income- tax Sales-tax Service taxDuty of Custom Duty of Excise Value added tax and Cess which have not been deposited onMarch 31 2021 on account of any dispute are as follows:
|Name of the Statue Income Tax Act 1961 ||Nature of Dues Income Tax ||Amount (in lacs) 31.85 ||Period to which the amount relates 2016-17 ||Forum where the dispute is pending Commissioner of Income-Tax (Appeals) |
viii. In our opinion and according to the information and explanations provided by themanagement the Company has not defaulted in the repayment of loans or borrowings to afinancial institution or a bank or government and has not issued any debentures during theyear during the year.
ix. In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) during the year. The company has utilized the monies raisedby way of term loans for the purpose for which they were raised.
x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been notice do reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. The Company is not a nidhi company and hence reporting under Clause 3(xii) of theOrder is not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder Clause 3(xiv) of the Order is not applicable to the Company.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected to its directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
| ||For DeoraMaheshwari& Co. |
| || |
| ||Firm's Registration Number: 123009W |
| ||CA PawankumarBagrecha |
| || |
| ||Membership No. 160085 |
| ||UDIN: 21160085AAAAAJ8623 |
|Date: 30th June 2021 || |
|Place: Ahmedabad || |