We have audited the standalone financial statements of Vaibhav Global Limited (the “Company”) and its Vaibhav Global Employee Stock Options Welfare Trust (“ESOP Trust”) which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of report of the other auditor on separate financial statements of such ESOP Trust as was audited by the other auditor, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit and other comprehensive loss, 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) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of report of the other auditor referred to in the “Other Matter” section below, is sufficient and appropriate to 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 most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of gemstone inventories
See Note 3(e) and 13 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The Company deals primarily in fashion
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In view of the significance of the matter we applied the following audit
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jewelery and lifestyle products which may be
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procedures in this area, among others to obtain sufficient audit evidence:
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subject to changing consumer demands and fashion trends. Company uses Gemstones primarily in manufacturing the above products.
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• Assessed the appropriateness of the accounting policy for inventories as per relevant Indian accounting standards.
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Significant degree of judgment is thereby
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• Evaluated the design and implementation of key internal financial
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required to assess the net realisable value
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controls with respect to determination of NRV and tested the operating
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(‘NRV') of the inventories and appropriate
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effectiveness of such controls on selected transactions.
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write down of items which may be ultimately sold below cost. Such judgment includes Company's expectations for future sale
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• Verified inventory ageing report by testing samples, selected using statistical sampling method.
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volumes, inventory liquidation plans and future
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• Tested the weighted average rate computation of inventory samples,
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selling prices less cost to sell.
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selected using statistical sampling method.
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In view of the above, assessment of NRV and
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• Evaluated the judgement and assumptions taken for valuation of
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its consequential impact, if any, on the carrying value of Gemstone inventory has been identified as a key audit matter
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inventory by involving subject matter expert, wherever required.
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Recognition and measurement of Minimum Alternate Tax (MAT)
See Note 3(l)(iii) and 36 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The Company has MAT Credit of ' 5,272.69
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In
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view of the significance of the matter we applied the following audit
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lacs as on 31 March 2024 which is available for
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procedures in this area, among others to obtain sufficient audit evidence:
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utilization against future tax liabilities. Of the aforesaid, MAT credit of only ' 2,020.33 lacs is recognised and included in deferred tax assets.
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Obtained an understanding of the management's process for estimating the recoverability of the deferred tax assets and identified key controls in the process. Tested the design, implementation and operating
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The analysis of the recoverability of such
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effectiveness of key controls regarding recoverability of MAT credit
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deferred tax assets has been identified as a key
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assets and budgeting procedures upon which the approved business
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audit matter because the assessment process
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plans are based.
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involves significant judgement regarding the future profitability, dividends, allowability of tax positions/deductions claimed by the management in the tax computations and likelihood of the realization of these assets, in particular whether there will be taxable profits and dividends in future periods that support the recognition of these assets. This requires assumptions regarding future profitability and dividends, which is inherently uncertain.
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Obtained and analyzed the future projections of taxable profits and dividends estimated by the management, assessing the key assumptions used, including the analysis of the consistency of the actual results obtained with those projected in the previous years. We challenged the Company's assumptions by our own expectations based on our knowledge of the client and experience of the industry in which it operates; industry norms; specified external data sources and the reasonableness of the future cash flow projections including dividends. Our assessment was based on our knowledge of the business and observable data of the industry.
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Accordingly, the same is considered as a key audit matter.
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Assessed all factors concerning its expected future profitability, both favourable and unfavourable, when assessing whether a deferred tax asset should be recognised on the basis of the availability of future taxable profits.
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Obtained evidence of the approval of the budgeted results included in the current year's projections.
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Evaluated the reasonableness of the deductions availed under the
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Income Tax Act included in the tax computation.
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Verified the computation of the amounts recognized as deferred tax assets on MAT credit. Evaluated the company's estimate regarding the period by which the MAT credit entitlement would be utilized, We verified such estimate to be within the period prescribed under the Income Tax Act, 1961.
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Assessed the adequacy of related disclosures made by the Company in the standalone financial statements.
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Other Information
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report, but does not include the financial statements and auditor's report(s) thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management’s and Board of Directors’/Board of Trustees’ Responsibilities for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The respective Management and Board of Directors of the companies/Board of Trustees of the ESOP Trust are responsible for maintenance of adequate
accounting records in accordance with the provisions of the Act, for safeguarding of the assets of each company/ ESOP Trust and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the respective Management and Board of Directors/Board of Trustees are responsible for assessing the ability of each company/ESOP Trust to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors/Board of Trustees either intends to liquidate the company/ESOP trust or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors/Board of Trustees are responsible for overseeing the financial reporting process of each company/ESOP trust.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial statements of ESOP Trust of the Company to express an opinion on the standalone financial statements. For the ESOP Trust included in the standalone financial statements, which has been audited by other auditor, such other auditor remain responsible for the direction, supervision and performance of the audit carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled “Other Matter” in this audit report.
We communicate with those charged with governance of the Company regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
We did not audit the financial statements of an ESOP Trust included in the standalone financial statements of the Company whose financial statements reflects total assets (before consolidation adjustments) of ' 408.27 lacs as at 31 March 2024, total income (before consolidation adjustments) of ' 8.76 lacs and net cash flows (before consolidation adjustments) amounting to ' 33.24 lacs for the year ended on that date, as considered in the standalone financial statements. The financial statements of this ESOP Trust has been audited by the other auditor whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of ESOP Trust, is based solely on the report of such other auditor.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”) issued by the Central Government of India 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 the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditor on separate financial statements of such ESOP Trust as was audited by other auditor, as noted in the “Other Matter” paragraph, we report, to the extent applicable, that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 and the backup of the books of account and other relevant books and papers in electronic mode has not been kept on servers physically located in India on a daily basis.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 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 matters connected therewith are as stated in the paragraph 2A(b) above on reporting under Section 143(3) (b) and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditor on separate financial statements of the ESOP Trust, as noted in the “Other Matter” paragraph:
a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d (i) The management of the Company represented to us that, to the best of its knowledge and belief, as disclosed
in the Note 45(v) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management of the Company represented to us that, to the best of its knowledge and belief, as disclosed in the Note 45(vi) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, which was declared in the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance with Section 123 of the Act.
As stated in Note 20 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. Based on our examination which included test checks, we report that:
i. The company has used accounting softwares for maintaining its books of account, however the feature of recording audit trail (edit log) facility has not been enabled. Consequently, we are unable to comment on audit trail feature of the said software.
ii. With respect to above, the question of audit trail feature being tampered does not arise since audit trail facility was not enabled.
C. With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid/ payable by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/ payable to any director by the Company is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm's Registration No.:101248W/W-100022
Rajiv Goyal
Partner
Place: Gurugram, Haryana Membership No.: 094549
Date: 23 May 2024 ICAI UDIN:24094549BKBSSY6384
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