1. We have audited the accompanying standalone financial
statements of Electronics Mart India Limited (‘the Company5),
which comprise the Standalone Balance Sheet as at 31 March
2025, the Statement of Profit and Loss (including Other
Comprehensive Income), the Standalone Statement of Cash
Flow and the Standalone Statement of Changes in Equity
for the year then ended, and notes to the standalone financial
statements, including material accounting policy information
and other explanatory information.
2. In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information required
by the Companies Act, 2013 (‘the Act5) in the manner so
required and give a true and fair view in conformity with
the Indian Accounting Standards (‘Ind AS’) specified under
Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015 and other accounting
principles generally accepted in India, of the state of affairs
of the Company as at 31 March 2025, and its profit (including
other comprehensive income), its cash flows and the changes
in equity for the year ended on that date.
BASIS FOR OPINION
3. We conducted our audit in accordance with the Standards
on Auditing specified under Section 143(10) of the Act. Our
responsibilities under those standards 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 (‘ICAI’)
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 we have obtained is sufficient and appropriate
to provide a basis for our opinion.
KEY AUDIT MATTERS
4. 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 year. 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.
5. We have determined the matters described below to be the key
audit matters to be communicated in our report.
|
Key audit matters
|
How our audit addressed the key audit matters
|
|
Revenue recognition — Incentive income:
1. Refer note 2(o) for the accounting policy and note 21 for
|
Our audit procedures relating to revenue recognition included,
but were not limited to the following:
|
| |
the relevant disclosures in the accompanying standalone
financial statements.
|
i)
|
Enquired with management to understand and reconfirm our
understanding of the accounting policy adopted by the Company,
|
|
2.
|
Pursuant to the terms of the arrangement with vendors,
the Company is entitled for income in the form of
incentives; computation thereof is based on the terms
and conditions as specified in the scheme documents, duly
|
|
and the process followed by the Company for estimating
the amount of incentive income, during the current year, in
accordance with the requirements of applicable accounting
standards.
|
| |
issued by its vendors. During the year ended 31 March 2025
the Company has accrued incentive income aggregating to
' 2,589.45 million [FY 31 March 2024'2,504.02 million].
|
ii)
|
Evaluated the design and tested the operating effectiveness of
Company’s key manual controls over computation of incentive
income.
|
|
3.
|
Accrual and measurement of such incentive income,
especially as on balance sheet date, is a complex process
due to volume of the schemes, significant estimates and
|
iii)
|
Recomputed, on a sample basis, incentive income as measured
and recorded by management in accordance with the terms and
conditions laid out in the relevant scheme document.
|
| |
judgments towards expected volume of sales covering the
scheme periods, assessing the Company’s ability to comply
with other terms and conditions of underlying schemes
|
iv)
|
On a sample basis, verified the incentive income accounted with
the communication received from vendors accepting such claims.
|
| |
and the manual process being applied for computation of
incentive income.
|
v)
|
On a sample basis, tested management reconciliation for closing
accruals with the confirmation provided by the relevant vendors.
|
|
Key audit matters
|
How our audit addressed the key audit matters
|
|
4.
|
Considering the volume and significance of manual
intervention and the degree of judgment involved, we have
identified recognition of such incentives as a key audit
matter, as this involved significant auditor attention for the
current year audit.
|
vi)
vii)
|
With respect to accruals for on-going schemes as at 31 March
2025, examined historical incentive accruals together with
our understanding of current year developments to form an
expectation of the incentive accrual as at year-end and compared
this expectation against the actual accruals. Further, we also
performed retrospective review to evaluate the precision with
which management makes estimates including the subsequent
receipt of such income.
Assessed adequacy of disclosures made in the financial
statements in accordance with the requirements of applicable
accounting standards.
|
|
Valuation of inventories:
1. Refer note 2(l) for accounting policies and note 10 for
|
Our audit procedures in relation to valuation of inventories
included, but were not limited to the following:
|
|
2.
|
the related disclosures in the accompanying consolidated
financial statements.
Inventories as at 31 March 2025 comprises of Stock-in¬
trade aggregating to '12,421.85 million [FY 31 March 2024
'9,692.76 million], carried at net of adjustment towards
realizable value (‘NRV’) and provision for slow moving
|
i)
|
Enquired with management to understand and reconfirm
our understanding of the accounting policy adopted by the
Company, and the process followed for valuation of inventories
including the process to estimate and accrual of rebate/discount,
in accordance with the requirements of applicable accounting
standards.
|
| |
inventory.
|
ii)
|
Evaluated the design and tested the operating effectiveness of
|
|
3.
|
The inventory of stock in trade is also subject to appropriate
adjustments towards purchase rebate/discount, which
are linked and are subject to compliance with the terms
and conditions specified under various schemes offered
by vendors. Accrual of such rebate/discount in respect
of schemes having a validity period extending beyond
the financial year is a complex manual activity, as accruals
of rebate/discount under such schemes is dependent on
|
iii)
|
Company’s key manual controls over:
o Valuation of inventories; and
o Accruals of rebate and discount having impact on the
carrying value of inventories
Tested the purchases prices of closing stock of inventories on a
sample basis and performed recomputation of weighted average
cost considered for valuation as at year end.
|
|
4.
|
estimation of value and volume of inventories expected to
be purchased during the period covered by the underlying
schemes.
Assessment of net realizable values of inventory of stock
|
iv)
|
Recomputed, on a sample basis, rebate/discount as measured
and recorded by management of the Company in accordance
with the terms and conditions laid out in the relevant scheme
documents.
|
| |
in trade, involve estimation of future selling price together
with assessment of incentives, if any, in the form of
compensation for lower realization.
|
v)
|
On a sample basis, tested management reconciliation for closing
accruals with the confirmation provided by the respective
vendors.
|
|
5.
|
Considering the significance of carrying value of
inventories to the overall balance sheet, significant manual
efforts to assess the value of closing stock after considering
impact of incentives and detailed assessment of provision
required relating to net realizable values and the judgements
|
vi)
|
Tested the inventory ageing on a sample basis from underlying
source documents and examined the historical trend of obsolete
inventory together with our understanding of current year
developments to form an expectation of the reasonableness of
management provision for slow moving inventory.
|
| |
applied for determining the allowance for slow moving
inventory, we have identified valuation of the inventories
as a key audit matter for current year’s audit.
|
vii)
viii)
|
On sample basis, tested management’s estimate of ‘net realisable
value’ of inventory based on expected future selling prices by
verifying the sale prices of inventory sold near to and subsequent
to year end.
Assessed the adequacy of the disclosures made in the consolidated
financial statements in accordance with the requirements of the
accounting standards.
|
INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITOR’S REPORT
THEREON
6. The Company’s Board of Directors are responsible for the
other information. The other information comprises the
information included in the Annual Report, but does not
include the standalone financial statements and our auditor’s
report thereon. The Annual Report is expected to be made
available to us after the date of this auditor’s report.
Our opinion on the standalone financial statements does not
cover the other information and we will 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
identified above when it becomes available 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.
When we read the Annual Report, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
RESPONSIBILITIES OF MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE FOR THE
STANDALONE FINANCIAL STATEMENTS
7. The accompanying standalone financial statements have
been approved by the Company’s Board of Directors.
The Company’s Board of Directors are responsible for the
matters stated in Section 134(5) of the Act with respect to
the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial
position, financial performance including other comprehensive
income, changes in equity and cash flows of the Company in
accordance with the Ind AS specified under Section 133 of
the Act and other accounting principles generally accepted
in India. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Company 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 financial statements that give a true and
fair view and are free from material misstatement, whether due
to fraud or error.
8. In preparing the standalone financial statements, the Board of
Directors is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the Board of Directors either intends
to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeing the
Company’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE STANDALONE FINANCIAL STATEMENTS
10. 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 Standards on Auditing 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.
11. As part of an audit in accordance with Standards on Auditing,
specified under Section 143(10) of the Act 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 management;
• Conclude on the appropriateness of Board of Directors’
use of the going concern basis of accounting 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; and
• 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.
12. We communicate with those charged with governance
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.
13. 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.
14. 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.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
15. As required by Section 197(16) of the Act, based on our audit,
we report that the Company has paid remuneration to its
directors during the year in accordance with the provisions of
and limits laid down under Section 197 read with Schedule V
to the Act.
16. As required by the Companies (Auditor’s Report) Order, 2020
(‘the OrdeF) issued by the Central Government of India in
terms of Section 143(11) of the Act we give in the Annexure I
a statement on the matters specified in paragraphs 3 and 4 of
the Order, to the extent applicable.
17. Further to our comments in Annexure I, as required by Section
143(3) of the Act based on our audit, 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 purpose of our audit of the
accompanying standalone financial statements;
b) Except for the matters stated in paragraph 17(h)(vi)
below on reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 (as amended), 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;
c) The standalone financial statements dealt with by this
report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial
statements comply with Ind AS specified under Section
133 of the Act;
e) On the basis of the written representations received
from the directors and taken on record by the Board of
Directors, none of the directors is disqualified as on 31
March 2025 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 paragraph 17(b) above on reporting under section
143(3)(b) of the Act and paragraph 17(h)(vi) below on
reporting under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014 (as amended);
g) With respect to the adequacy of the internal financial
controls with reference to standalone financial statements
of the Company as on 31 March 2025 and the operating
effectiveness of such controls, refer to our separate
report in Annexure II wherein we have expressed an
unmodified opinion; and
h) 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
(as amended), in our opinion and to the best of our
information and according to the explanations given to
us:
i. The Company, as detailed in note 34 to the
standalone financial statements, has disclosed
the impact of pending litigations on its financial
position as at 31 March 2025;
ii. The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses as at 31
March 2025;
iii. There were no amounts which were required to
be transferred to the Investor Education and
Protection Fund by the Company during the year
ended 31 March 2025;
iv. a. The management has represented that, to the
best of its knowledge and belief, as disclosed
in note 40 to the standalone financial
statements, no funds have been advanced
or loaned or invested (either from borrowed
funds or securities premium or any other
sources or kind of funds) by the Company
to or in any persons or entities, including
foreign entities (‘the intermediaries’), with
the understanding, whether recorded in
writing or otherwise, that the intermediary
shall, whether, directly or indirectly lend or
invest in other persons or entities identified
in any manner whatsoever by or on behalf of
the Company (‘the Ultimate Beneficiaries’) or
provide any guarantee, security or the like on
behalf the Ultimate Beneficiaries;
b. The management has represented that, to the
best of its knowledge and belief, as disclosed
in note 40 to the standalone financial
statements, no funds have been received by
the Company from any persons or entities,
including foreign entities (‘the Funding
Parties’), with the understanding, whether
recorded in writing or otherwise, that the
Company shall, whether directly or indirectly,
lend or invest in other persons or entities
identified in any manner whatsoever by or
on behalf of the Funding Party (‘Ultimate
Beneficiaries’) or provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries; and
c. Based on such audit procedures performed
as considered reasonable and appropriate
in the circumstances, nothing has come to
our notice that has caused us to believe that
the management representations under sub¬
clauses (a) and (b) above contain any material
misstatement.
v. The Company has not declared or paid any dividend
during the year ended 31 March 2025.
vi. As stated in note 41 of the standalone financial
statements and b ased on our examination
which included test checks, except for instances
mentioned below, the Company, in respect of
financial years commencing on 1 April 2024,
has used an accounting software for maintaining
its books of account which have a feature of
recording audit trail (edit log) facility and the
same have been operated throughout the year for
all relevant transactions recorded in the software.
Further, during the course of our audit we did not
come across any instance of audit trail feature being
tampered with, other than the consequential impact
of the exceptions given below. Furthermore, the
audit trail has been preserved by the Company as
per the statutory requirements for record retention.
|
Nature of Exception noted
|
Details of Exception
|
|
Instances of accounting software for maintaining
books of account for which the feature of
recording audit trail (edit log) facility was not
operated throughout the year for all relevant
transactions recorded in the software.
|
i) The audit trail feature was not enabled at the database level for
accounting software to log any direct data changes, used for
maintenance of accounting transactions by the Company.
ii) The audit trail (edit logs) was not retained for the period 01 April
2024 to 06 August 2024 at the database level for the accounting
software to log any direct data changes, used for maintenance of
sales transactions by the Company.
|
For Walker Chandiok & Co LLP
Chartered Accountants
Firm’s Registration No.: 001076N/N500013
Sanjay Kumar Jain
Partner
Membership No.: 207660
UDIN: 25207660BMMIQQ2574
Place: Hyderabad
Date: 20 May 2025
|