To the Members of V2 Retail Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of V2 RetailLimited (the Company) which comprise the Balance Sheet as at 31 March 2021the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 (Act) in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS)specified under section 133 of the Act of the state of affairs of the Company as at 31March 2021 and its loss (including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Basis for Qualified Opinion
3. As stated in Note 16(a) to the accompanying standalone financial statements theCompanys other equity as at 31 March 2021 includes an amount of 365.36 lakhs in thenature of capital reserve arising out of business restructuring carried out in earlieryears for which the Companys management has not been able to provide necessaryreconciliation and information. In the absence of sufficient appropriate audit evidencewe are unable to comment upon the appropriateness and classification of the aforesaidbalance and the consequential impact if any on the financial statements. Our opinion onthe standalone financial statements for the previous year ended 31 March 2020 was alsomodified in respect of this matter.
4. As stated in Note 36(iv) to the accompanying standalone financial statements theCompanys contingent liabilities as at 31 March 2021 include certain contingentliabilities aggregating to 799.59 lakhs pertaining to litigations pending with variousauthorities for which the Companys management has not been able to providenecessary evidence in relation to probability of outflow of resources embodying economicbenefits. In the absence of sufficient appropriate audit evidence we are unable tocomment upon the appropriateness and classification of the aforesaid amounts as provisionor contingent liabilities as at 31 March 2021 in accordance with Ind AS 37"Provisions Contingent Liabilities and Contingent Assets" and the consequentialimpact if any on the total liabilities and loss as at and for the year then ended. Ouropinion on the standalone financial statements for the year ended 31 March 2020 was alsoqualified in respect of this matter.
5. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditors Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion.
Emphasis of Matteruncertainties and the impact of COVID 19 on standalonefinancial statements
6. We draw attention to Note 48 of the accompanying standalone financial statementswhich describes the uncertainties relating to the effect of COVID-19 pandemic outbreak andthe managements evaluation of the impact on the standalone financial statement ofthe Company as at the balance sheet date. The extent of the impact of these uncertaintieson the Companys operations is significantly dependent on future developments. Ouropinion is not modified in respect of this matter.
Key Audit Matters
7. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
8. We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Existence and valuation of Inventories || |
|Refer note 1(iv)(k) for significant accounting policy and note 9 for the financial statement disclosure. ||Our audit included but was not limited to the following audit procedures over inventory existence and valuation: |
|At the end of each reporting period management of the Company assesses whether there is adequate provision for inventory losses on account of lower net realizable value and obsolete inventory. ||Understood the management process for cyclical physical counts identification of slow moving non- moving or obsolete inventories and determining net realisable value and evaluated whether such processes are consistently followed. |
|The management applies judgement in determining appropriate provisions for inventory losses which include: ||Evaluated design and tested the operating effectiveness of controls implemented around above mentioned processes throughout the year. |
|a) Applying specific identification process to ascertain slow moving and obsolete inventory. ||Cyclical physical counts and physical count performed subsequent to year end: |
|b) Assessing the net realizable value of such slow moving and obsolete inventory. ||Inspected managements inventory count records and observed physical inventory verification for locations selected based on materiality and risk considerations. |
|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 in such cyclical counts. ||Tested the roll-forward of the cyclical counts performed by the management for locations where such counts were performed before the year end. |
|Considering the aforesaid complexities involved in cyclical physical verification of inventory which required us to undertake alternate audit techniques as described in this key audit matter and significant management judgements and estimates required with respect to allowance for inventory loss existence and valuation of inventory was determined to be a key audit matter for the current year audit. ||Performed independent test counts to corroborate the management count for the locations selected as above performed roll-back procedures by verification of movement between the year-end date and sample test count date with the supporting documents which included purchase invoice sales invoice dispatch register gate inward/outward register etc. to substantiate the existence of inventory as at the reporting date; |
| ||Tested the adjustment made in the books of accounts basis the results of the physical counts performed by the management. |
| ||Slow-moving/obsolete inventory provisions: |
| ||Tested inventory ageing obtained through system reports where applicable. |
| ||Obtained from management the list of slow and non-moving inventories identified as on 31 March 2021 and their corresponding expected sales in future periods. |
| ||Tested the computation for allowance for slow- moving non-moving and obsolete inventories by performing an independent age-wise analysis of the inventory line items along with specific inquiries with the management with respect to planned sales corroborating the same with our prior experience and understanding of the business. |
| ||Tested the net realizable value of traded goods inventory on a sample basis to recent selling prices. |
| ||Compared and assessed the actual utilization/sales to the previous estimates done by the management in prior periods to determine the efficacy of the process of estimation by the management. |
| ||Obtained written representations from management on the completeness and adequacy of inventory allowance as at the year end. |
|IND AS 116- Leases ||Our audit included but was not limited to the following audit procedures: |
|Refer note 1(iv)(h) for significant accounting policy and note 47 for the financial statement disclosure relating to accounting for leases in accordance with Ind AS 116 Leases (Ind AS 116). ||Understood the management process for identification of leasing arrangements where the company negotiated rent concession as a direct consequence of COVID-19 pandemic for applying the practical expedient. |
|The Company has recognised the Right of Use asset (ROU) and corresponding lease liability amounting to Rs 28489.89 lakhs and Rs 33751.74 lakhs as at 31 March 2021 respectively. ||Evaluated design and tested the operating effectiveness of controls implemented around above mentioned process. |
|During the current yar the Ministry of Corporate Affairs Government of India issued a notification dated 24 July 2020 amending Ind AS 116 to include a practical expedient by way of adding paragraphs 46A and 46B in the standard relating to accounting treatment of rent concessions occurring as a direct consequence of COVID-19 pandemic giving a choice to the lessee to elect whether the said rent concessions are to be treated as lease modifications subject to meeting of the conditions included therein. ||Reviewed the overall impact analysis prepared by the management ensuring completeness of lease contracts and accurate application of practical expedient. Further verified the integrity and arithmetical accuracy of such calculations. |
|The Company has assessed compliance with the aforementioned conditions given in paragraph 46B of Ind AS 116 and basis such assessment elected to apply the said practical expedient with respect to the rent concessions received during the applicable period for various stores of the Company and accordingly recognised 1072.19 lakhs under head Other income. ||Ensure that rent concession received from the lessors as considered for application of practical expedient is received as a direct consequence of COVID-19 basis inspection of underlying communication between the company and the lessors. |
|In order to compute the rent concession amount to apply the practical expedient a significant data extraction exercise was undertaken by management to summarize the relevant data relating to lease contracts. ||Tested the accuracy of the underlying lease data used to calculate the rent concession by agreeing a representative sample of leases to original contracts addenda and other supporting documents; |
|Further the determination of rent concession amount using practical expedient and assessing compliance with the conditions given under paragraph 46B involved application of significant judgements and estimates. ||Evaluated the appropriateness and adequacy of disclosures made in the financial statements with respect to Lease liability Right of Use Assets and application of practical expedient in conformity with Ind AS 116. |
|Owing to the volume of the lease contracts materiality of the impact of practical expedient and the estimates involved we have considered this matter to be a key audit matter in our audit. ||Obtained written representations from management on the completeness of lease data and application of practical expedient. |
Information other than the Financial Statements and Auditors Report thereon
9. The Companys Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditors report thereon. TheAnnual Report is expected to be made available to us after the date of this auditorsreport.
Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation identified above when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the standalone financial statementsor 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 misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
10. The accompanying standalone financial statements have been approved by theCompanys Board of Directors. The Companys Board of Directors is responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Ind AS specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
11. In preparing the financial statements management is responsible for assessing theCompanys ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
12. Those Board of Directors is also responsible for overseeing the Companysfinancial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
13. 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 auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
14. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control;
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls;
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;
Conclude on the appropriateness of managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern;
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation;
15. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
16. 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.
17. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors report unless law or regulation precludes public disclosure about thematter or when 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
18. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.
19. As required by the Companies (Auditors Report) Order 2016 (theOrder) issued by the Central Government of India in terms of section 143(11) of theAct we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4of the Order.
20. Further to our comments in Annexure I as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:
a) we have sought and except for the matters described in the Basis for QualifiedOpinion section obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit of the accompanyingstandalone financial statements;
b) except for the possible effects of the matters described in the Basis for QualifiedOpinion section in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement withthe books of account;
d) except for the possible effects of the matters described in the Basis for QualifiedOpinion section in our opinion the aforesaid standalone financial statements comply withInd AS specified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of section 164(2) of the Act;
f) the qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion section;
g) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated June 28 2021 as per Annexure II expressed modified opinion; and
h) with respect to the other matters to be included in the Auditors Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. except for the possible effects of the matters described in paragraph 4 of the Basisfor Qualified Opinion section the standalone financial statements disclose the impact ofpending litigations on the standalone financial position of the Company as at 31 March2021 as detailed in Note 36 to the standalone financial statements;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021;
iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31 March 2021; and
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 504774
Place: New Delhi
Date: June 28 2021
Annexure I to the Independent Auditors Report of even date to the members of V2Retail Limited on the standalone financial statements for the year ended 31 March 2021
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 and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (in the nature of Property plant andequipment and other intangible assets).
(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of 3 years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. In accordance with this program certain fixed assets were required to beverified during the year which have not been verified by the management of the Company asstated in note 52 to the standalone financial statements. Therefore we are unable tocomment on the discrepancies if any which could have arisen on such verification.
(c) The Company does not hold any immovable property (in the nature of propertyplant and equipment). Accordingly the provisions of clause 3(i) (c) of the Orderare not applicable.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-intransit. Material discrepanciesnoticed on such verification have been properly dealt with in the books of account.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii) (b)and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion the Company has not entered into any transaction covered underSections 185 and 186 of the Act. Accordingly the provisions of clause 3(iv) of the Orderare not applicable.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) The Central Government has not specified maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Companys products.Accordingly the provisions of clause 3(vi) of the Order are not applicable.
(vii) (a) Undisputed statutory dues including provident fund employees stateinsurance income-tax goods and service tax cess and other material statutory dues asapplicable have generally been regularly deposited to the appropriate authorities thoughthere has been a slight delay in a few cases. Further no undisputed amounts payable inrespect thereof were outstanding at the year-end for a period of more than six months fromthe date they became payable.
(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount (I) ||Amount paid under Protest ( ) ||Period to which the amount relates ||Forum where dispute is pending |
|Finance Act 1994 ||Service Tax ||30208391 ||7500000 ||2006-07 to 2010-11 ||Commissioner of Service Tax |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||5155233 ||Nil ||2006-07 ||Assistant Commissioner |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||10000000 ||Nil ||2007-08 ||Appellate Authority |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||17353962 ||Nil ||2007-08 ||Joint Commissioner (Appeals) |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||6810980 ||Nil ||2007-08 ||Deputy Commissioner |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||1525511 ||Nil ||2007-08 ||Assistant Commissioner |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||8387111 ||Nil ||2008-09 ||Deputy Commissioner |
|Rajasthan Value Added Tax Act 2003 ||Sales Tax ||50000 ||Nil ||2009-10 ||Assistant Commissioner |
|The Uttar Pradesh Value Added Tax Act 2008 ||Sales Tax ||203000 ||Nil ||2009-10 ||Joint Commissioner (Appeals) |
|The Uttar Pradesh Value Added Tax Act 2008 ||Sales Tax ||2242668 ||Nil ||2009-10 ||Assistant Commissioner |
|West Bengal Value Added Tax Act 2003 ||Sales Tax ||225000000 ||Nil ||2008-09 ||Deputy Commissioner |
|The Assam Value Added Tax Act 2003 ||Sales Tax ||720420 ||Nil ||2010-11 ||Deputy Commissioner |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution during the year. The Company has no loans or borrowings payable toGovernment and did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act. (xvi)The Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 504774
Place: New Delhi
Date: June 28 2021
Independent Auditors Report on the internal financial controls with reference tofinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (the Act)
1. In conjunction with our audit of the standalone financial statements of V2 RetailLimited (the Company) as at and for the year ended 31 March 2021 we haveaudited the internal financial controls with reference to financial statements of theCompany as at that date.
Responsibilities of Management and Those Charged with Governance for Internal FinancialControls
2. The Companys Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the Guidance Note) issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Companys businessincluding adherence to the Companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Auditors Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements
3. Our responsibility is to express an opinion on the Companys internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Companys internal financialcontrols with reference to financial statements.
Meaning of Internal Financial Controls with Reference to Financial Statements
6. A Companys internal financial controls with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A Companys internalfinancial controls with reference to financial statements include those policies andprocedures 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 authorisations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Companys assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. According to the information and explanations given to us and based on our auditthe following material weaknesses have been identified in the operating effectiveness ofthe Companys internal financial controls with reference to financial statements asat 31 March 2021:
a) The Companys internal financial controls over retention of adequateinformation towards reconciliation of capital reserve in accordance with accountingprinciples generally accepted in India were not operating effectively which could lead toa potential material misstatement in Other equity in the accompanying financialstatements.
b) The Companys internal financial controls over retention of adequateinformation towards estimating provisions and contingent liabilities with respect tooutstanding litigations were not operating effectively which could result in aninappropriate assessment of the accuracy and completeness of provisions and contingentliabilities which is not in accordance with Indian Accounting Standard 37 - ProvisionsContingent Liabilities and Contingent Assets.
c) The Companys internal financial control system over physical verification ofproperty plant and equipment (PPE) were not operating effectively which could lead to apotential material misstatement in the carrying value of the PPE and its consequentialimpact on earnings reserves and related disclosures in the accompanying financialstatements.
9. A material weakness is a deficiency or a combination of deficienciesin internal financial controls with reference to financial statements such that there isa reasonable possibility that a material misstatement of the Companys annual orinterim financial statements will not be prevented or detected on a timely basis.
10. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements as at 31 March 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI and except for the possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria theCompanys internal financial controls with reference to financial statements wereoperating effectively as at 31 March 2021.
11. We have considered the material weaknesses identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of thestandalone financial statements of the Company as at and for the year ended 31 March 2021and these material weaknesses as mentioned in para 8(a) and 8(b) have affected our opinionon the standalone financial statements of the Company and we have issued a modifiedopinion on the standalone financial statements.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 504774
Place: New Delhi
Date: June 28 2021
Statement on Impact of Audit Qualifications (for audit report with modified opinion)submitted along with Standalone Annual Audited Financial Results Figure in ` Lakh exceptfor per share data Statement on impact of audit qualifications for the financial yearended 31 March 2021 [See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations2016]
|I. S. No. Particulars ||Audited Figures (as reported before adjusting for qualifications) ||Audited Figures (as reported after adjusting for qualifications) |
|1. Turnover /total income ||56080.59 ||56080.59 |
|2. Total expenditure ||57389.59 ||57389.59 |
|3. Net (Loss)/profit for the period ||(1103.83) ||(1103.83) |
|4. Earnings per share ||(3.24) ||(3.24) |
|5. Total assets ||79307.09 ||79307.09 |
|6. Total liabilities ||52120.61 ||52120.61 |
|7. Net worth ||27186.49 ||27186.49 |
|8. Any other financial item (as felt appropriate by the management) ||Nil ||Nil |
II. Audit qualification (each audit qualification separately)
a. Details of audit qualifications:
The audit report of statutory auditors includes following qualifications on the auditedfinancial statements/results:
(i) As stated in Note 4 to the accompanying standalone financial results theCompanys other equity as at 31 March 2021 includes an amount of B 365.36 lakh in thenature of capital reserve arising out of business restructuring carried out in earlieryears for which the Companys management has not been able to provide necessaryreconciliation and information. In the absence of sufficient appropriate audit evidencewe are unable to comment upon the appropriateness and classification of the aforesaidbalance and the consequential impact if any on the standalone financial results. Thismatter was also modified in our audit report on the financial results for the year ended31 March 2020.
(ii) As stated in Note 5 to the accompanying standalone financial results theCompanys contingent liabilities as at 31 March 2021 include an amount of B 799.59lakh relating to litigations pending with various authorities for which theCompanys management has not been able to provide necessary details and information.In the absence of sufficient appropriate audit evidence we are unable to comment upon theappropriateness and classification of the aforesaid amounts including managementsevaluation of likely outcome of such litigations in accordance with Ind AS 37"Provisions Contingent Liabilities and Contingent Assets" and the consequentialimpact if any on the total liabilities and loss as at and for the year then ended. Thismatter was also modified in our audit report on the financial results for the year ended31 March 2020.
b. Type of audit qualification: Qualified Opinion/Disclaimer of Opinion/Adverse OpinionQualified opinion
c. Frequency of qualification: Whether appeared first time/repetitive/since how longcontinuing Repetitive- Qualification stated in
(i) is continuing from the financial year ended 31 March 2011. Qualification stated in
(ii) is continuing from the financial year ended 31 March 2012. However the figurementioned has been updated.
d. For audit qualification(s) where the impact is quantified by the auditorManagements Views:
Managements view: not applicable
e. For audit qualification(s) where the impact is not quantified by the auditor: (i)Managements estimation on the impact of audit qualification:
(ii) If management is unable to estimate the impact reasons for the same:
a) The Company restructured its business in the financial year 2010-11 resulting increation of capital reserve amounting to Rs. 60523.24 lakh. The aforementioned reservehas been reconciled except for Rs. 365.36 lakh which the Company is in the process ofreconciling. However the management believes that there is no impact of the same onstandalone statement of profit and loss.
b) Out of contingent liabilities existing as at 31 March 2021 certain liabilitiesaggregating to Rs. 799.59 lakh are under appeal with different authorities at differentlevels. Whilst the impact of contingent liabilities on these results can only beascertained on the settlement of such cases/ disputes management has broadly assessedthat based on the merits of such cases the Company has reasonably good chances onsucceeding and accordingly no provision has been recognised in these standalone financialresults.
(iii) Auditors comments on (i) and (ii) above:
Since management could not ascertain the impact the auditors have given qualificationsin their auditors report.
|III Signatories: ||For Walker Chandiok & Co LLP |
|Yours Sincerely ||Chartered Accountants |
|For V2 Retail Limited ||Firm Registration No.: 001076N/N500013 |
|Ram Chandra Agarwal ||Rohit Arora |
|Chairman & Managing Director ||Partner |
|DIN00491885 ||Membership No. 504774 |
|Akash Agarwal || |
|Chief Financial Officer || |
|Lalit Kumar || |
|Audit Committee Chairman || |
|Place: New Delhi || |
|Date: June 28 2021 || |