To the Members of
Vaibhav Global Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Vaibhav Global Limited("the Company") which comprise the standalone balance sheet as at 31st March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and profit and other comprehensiveincome changes in equity 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) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone 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 opinion on the Standalone financial statements.
Key Audit Matters
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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
Description of Key Audit Matter: Valuation of Gemstone Inventories
See note 9 to the standalone financial statements:
|The key audit matter ||How the matter was addressed in our audit |
|Net realisable value (NRV) of Gemstone Inventory See note 3(e) to the standalone financial statements ||In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient audit evidence: |
|The Company deals in fashion jewellery and lifestyle products Whichh maybe subject to changing consumer demands and fashion trends. Company uses Gemstones primarily in manufacturing the above products. Significant degree of judgment is thereby required to assess the NRV of the inventories and appropriate write down of items which may be ultimately sold below cost. Such judgment include Company's expectations for future sale volumes inventory liquidation plans and future selling prices less cost to sell. || Assessed the appropriateness of the accounting policy for inventories as per relevant accounting standards. |
|In view of the above assessment of NRV and its consequential impact if any on the carrying value of Gemstone inventory has been identified as a key audit matter. || Evaluated the design and implementation of key internal financial controls with respect to determination of NRV and tested the operating effectiveness of such controls on selected transactions. |
| || Verified inventory ageing report by testing samples selected using statistical sampling method. |
| || Tested the moving weighted average rate computation of inventory samples selected using statistical sampling method. |
| || Evaluated the judgement and assumptions taken for valuation of inventory by involving subject matter expert wherever required. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's and Board of Directors' Responsibility for the Standalone FinancialStatements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our 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
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. (A) 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 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B" (B) With respect to the othermatters to be included in the Auditors' Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March 2020on its financial position in its standalone financial statements - Refer note 34 (a) tothe standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8th November 2016 to 30thDecember 2016 have not been made in these financial statements since they do not pertainto the financial year ended 31st March 2020.
(C) With respect to the matter to be included in the Auditors' Report under section197(16): In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
For B S R & Co. LLP
ICAI Firm's Registration No. 101248W/W-10022
Place: Gurugram Membership No. 094549
Date: 27th May 2020
Annexure A referred to in the Independent Auditor's Report to the members of VaibhavGlobal Limited on the standalone Ind AS financial statements for the year ended 31stMarch 2020
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year and no material discrepancies were noticedon such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant and equipment are held in the name of the Company. In respectof immovable properties taken on lease and disclosed as right of use assets in thestandalone financial statements the lease agreements are in the name of the Company.Further based on the direct confirmations received from bank where such deeds are keptas security against loan title deed of immovable properties are held in the name of theCompany as on balance sheet date.
(ii) The inventories have been physically verified at reasonable intervals bymanagement during the year. In our opinion the frequency of such verification isreasonable. The Company has maintained proper records of inventory. The discrepanciesnoted on verification between the physical stock and the book records were not material.
(iii) According to information and explanation to us the Company during the periodhad granted unsecured loan to a Company covered in the register maintained under section189 of the Companies Act 2013. Further according to information and explanation given tous:
a) the terms and conditions of the grant of such loan are not prejudicial to theCompany's interest.
b) the schedule of repayment of principal and payment of interest has been stipulatedand the amount is not due for payment currently.
c) there is no overdue for more than ninety days.
Further the Company has not granted any loan to firms limited liability partnershipsor other parties covered in the register maintained under Section 189 of the CompaniesAct 2013.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with provisions of section 186 of the Companies Act 2013 in respectof investments made. According to information and explanations given by the managementthere are no loans guarantee and securities given in respect of which provisions ofsection 185 and 186 of the Companies Act 2013 are applicable and hence not commentedupon.
(v) The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India provisions of section 73 to 76 of the Actany other relevant provisions of the Act and rules framed thereunder. Accordinglyparagraph 3(v) of the Order is not applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of cost records undersub-section (1) of section 148 of the Act for any of the services rendered by theCompany. Accordingly paragraph 3(vi) of the Order is not applicable to the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employee stateinsurance income-tax duty of customs goods and services tax and other statutory dues tothe extent applicable have generally been deposited during the current year by the Companywith the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employee state insurance income-tax duty ofcustoms goods and services tax cess and other statutory dues to the extent applicablewere in arrears as at 31st March 2020 for a period of more than six months from the datethey became payable. (b) According to the information and explanations given to us thereare no disputed dues of income tax goods and services tax and duty of customs which havenot been deposited by the Company with the appropriate authorities on account of anydispute as at 31st March 2020 except as follows:
|Name of the statue ||Nature of dues ||Amount of dispute * ||Amount paid under protest ||Period to which amount relates ||Forum where dispute is pending |
| || ||4.08 ||10.00 ||Assessment Year 2007 - 08 ||Assessing Officer |
| || ||8.10 ||1.61 ||Assessment Year ||Commissioner |
|Income Tax Act 1961 ||Income Tax || || ||2008 09 ||of Income Tax (Appeals) |
| || ||149.58 ||53.38 ||Assessment Year 2013 14 ||Rajasthan High Court |
|The Finance Act 1994 ||Service Tax ||30.20 ||30.20 ||Assessment Year 2017 18 ||Customs Excise and Service Tax |
| || || || || ||Appellate Tribunal |
* including interest / penalties where quantified and demanded by authorities.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks. Further noloans or borrowings were taken from government and there were no debentures issued duringthe year or outstanding as at 31st March 2020.
(ix) In our opinion and according to the information and explanations given to us theCompany did not raise money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit.
(xi) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid / providedmanagerial remuneration in accordance with the requisite approvals mandated by provisionsof Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us in our opinion theCompany is not a Nidhi Company as prescribed under Section 406 of the Act. Accordinglyparagraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the transactions entered into by theCompany with the related parties are in compliance with Section 177 and 188 of the Actwhere applicable and have been disclosed in the accompanying standalone financialstatements of the Company in accordance with the applicable accounting standards.
(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of its shares or fully or partly convertible debentureduring the year. Accordingly paragraph 3(xiv) of the order is not applicable to theCompany.
(xv) According to information and explanations given to us the Company has not enteredinto any non-cash transaction with directors or persons connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.
|For B S R & Co. LLP || |
|Chartered Accountants || |
| ||ICAI Firm's Registration No. 101248W/W-10022 |
| ||Rajiv Goyal |
| ||Partner |
|Membership No. 094549 ||Place: Gurugram |
|ICAI UDIN:20094549AAAADU5926 ||Date: 27th May 2020 |
Annexure B to the Independent Auditors' report on the standalone financial statementsof Vaibhav Global Limited for the period ended 31st March 2020
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013
(Referred to in paragraph 2(A)(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
We have audited the internal financial controls with reference to financial statementsof Vaibhav Global Limited (the Company") as of 31st March 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31st March 2020 based on the internal financial controlswith reference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial controls with Reference to FinancialStatements
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.
|For B S R & Co. LLP || |
|Chartered Accountants || |
| ||ICAI Firm's Registration No. 101248W/W-10022 |
| ||Rajiv Goyal |
| ||Partner |
|Membership No. 094549 ||Place: Gurugram |
|ICAI UDIN:20094549AAAADU5926 ||Date: 27th May 2020 |