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 31 March2019 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 ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 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) specified under section 143(10) of the Act. Our responsibilities under those SAsare further described in the Auditors' Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of 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 inventories
See note 9 to the standalone financial statements
|The key audit matter ||How the matter was addressed in our audit |
|The Company manufactures and sells fashion jewellery and lifestyle products goods which may be subject to changing consumer demands and fashion trends. The Company has a plan wherein inventory is verified on a quarterly basis to ascertain the existence of inventory and its valuation. Inventory valuation also involves significant assumptions and estimations made by the Management. We have identified inventory as a key audit matter because of the judgement applied in the valuation and provision for inventory. The Company's principal accounting policy on inventory and accounting estimates and judgements on inventory are on described in Note 3(e). ||In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence: In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence: We assessed the appropriateness of the inventories accounting policies and its compliances with applicable accounting standards. We evaluated the design of internal financial controls and operating effectiveness of the relevant key controls with respect to physical verification of inventory valuation of inventory and provision for inventory. We attended physical verification of stocks conducted by the management as at the year end. We also performed surprise stock counts at selected location on a sample basis. We tested on a sample basis the valuation of inventories as at the year end. Evaluating the reasonableness of the valuation obtained by the management on periodic basis from an independent valuer. We evaluated the reasonableness of valuation involving judgment of the management which is also supported by valuation from an independent valuer wherever required. We considered the adequacy and appropriateness of the disclosures in the financial statements relating to the inventories. |
Information Other than the Standalone Financial Statements and Auditors' Report Thereon
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 Responsibility for the Standalone Financial Statements
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/loss 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 the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditors' 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 auditors' 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 can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic 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 andmaintain professional skepticism throughout the audit. We also:
Identif y and assess the risks of material misstatement of standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal 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 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 reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue 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 (Auditor's Report) Order 2016 Order") issued bythe 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.
(A) As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The standalone balance sheet the standalone statement ofprofit and loss (including other comprehensive income) the standalone statement ofchanges in equity and the standalone statement of cash flows dealt with by this Report arein agreement with the books of account. d) In our opinion the aforesaid standalonefinancial statements comply with the Ind AS specified under section 133 of the Act. e) Onthe basis of the written representations received from the directors as on 31 March 2019taken on record by the Board of Directors none of the directors is disqualified as on 31March 2019 from being appointed as a director in terms of Section 164(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 other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations as at 31 March 2019 on itsfinancial position in its standalone financial statements - Refer Note 34(a) to thestandalone financial statements; ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses. iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company; iv. The disclosures in thestandalone financial statements regarding holdings as well as dealings in specified banknotes during the period from 8 November 2016 to 30 December 2016 have not been made inthese financial statements since they do not pertain to the financial year ended 31 March2019. (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.
ForB S R & Co. LLP
ICAI Firm's Registration number: 101248W/W-100022
Place: London Partner Date: 21 May 2019 Membership No.: 094549
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
Report to the members of Vaibhav Global Limited on the standalone Ind AS financialstatements for the year ended 31 March 2019
(i) (a) According to information and explanation given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets.
(b) Accor ding to information and explanation given to Company has a regular programmeof physical verification of its fixed assets by which all fixed assets are verified in aphased manner over a period of three years. In accordance with this program certainfixed assets were physically verified during the current financial year. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. As informed to us no material discrepancies werenoticed on such verification. (c) According to the information and explanations given tous and based on the direct confirmation received from bank where such deeds are kept assecurity against loan title deed of immovable properties are held in the name of theCompany as on balance sheet date.
(ii) According to the information and explanations given to us the inventories havebeen physically verified at reasonable intervals by management during the year. Asinformed to us no material discrepancies were noted on such verification.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct. Accordingly the provisions of paragraph 3 (iii) of the Order are not applicable tothe Company.
(iv) The Company has complied with provisions of section 186 of the Companies Act 2013in respect of investments made. According to information and explanations given by themanagement there are no loans guarantee and securities given in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon. us (v)theAs per the information and explanations given to us the Companyhas not accepted any deposits covered under section 73 to 76 of the Act. Accordinglyparagraph 3(v) of the Order is not applicable.
(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of section 148 ofthe Act for any of the services rendered by the Company. Accordingly paragraph 3(vi) ofthe Order is not applicable.
(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 been generally been deposited during the current year by theCompany with 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 31 March 2019 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 31 March 2019 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 |
|Income Tax Act 1961 ||Income Tax ||4.08 ||10.00 ||Assessment Year 2007 08 ||Assessing Officer |
| || ||8.10 ||1.61 ||Assessment Year 2008 09 ||Commissioner of Income Tax (Appeals) |
| || ||149.58 ||53.38 ||Assessment Year 2013 14 ||Rajasthan High Court |
|The Finance Act 1994 ||Service Tax ||5.40 ||5.40 ||Assessment Year 2017 18 ||Customs Excise and Service Tax Appellate Tribunal |
| ||Service Tax ||30.20 ||30.20 ||Assessment Year 2017 18 ||Customs Excise and Service Tax Appellate Tribunal |
(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans or borrowings to financial institutions. Further no loans or borrowings weretaken from government and there were no debentures issued during the year or outstandingas at 31 March 2019.
(ix) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company did not raise money by way ofinitial public offer or further public offer (including debt instruments) and term loansduring the year. Accordingly paragraph 3(ix) of the Order is not applicable.
(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid orprovided by the Company in accordance with the provisions of Section 197 read withSchedule V to the Act.
(xii) Accor ding to the information and explanations given to Company is not a NidhiCompany. Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii)According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the transactions entered into by the Companywith the related parties are in compliance with Section 177 and 188 of the Act whereapplicable and have been disclosed in the accompanying standalone financial statements ofthe 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.
(xv) According to information and explanations given to us the Company has not enteredinto any non-cash transaction with directors or to us thepersons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable.
(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.
ForB S R & Co. LLP
ICAI Firm's Registration number: 101248W/W-100022
Place: London Partner Date: 21 May 2019 Membership No.: 094549
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
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 1(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 31 March 2019 in conjunction with ouraudit 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 31 March 2019 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 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.
ForB S R & Co. LLP
ICAI Firm's Registration number: 101248W/W-100022
Place: London Partner Date: 21 May 2019 Membership No.: 094549