1. We have audited the accompanying standalone
financial statements of Vishal Mega Mart Limited
(formerly known as Vishal Mega Mart Private Limited)
('the Company'), which comprise the Standalone
Balance Sheet as at 31 March 2025, the Standalone
Statement of Profit and Loss (including Other
Comprehensive Loss), 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 Act') 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 loss), its cash flows and the changes
in equity for the year ended on that date.
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 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.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key audit matters
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How our audit addressed the key audit matters
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Impairment assessment of Goodwill
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Refer note 2(k) for the material accounting policy information
and note 4 of the accompanying standalone financial
statements for the related disclosures of Goodwill and its
impairment assessment.
As at 31 March 2025, the Company is carrying Goodwill
amounting to ? 36,142.28 millions in the standalone financial
statements, which represents 46% of the total assets of the
Company.
The management has identified "contract manufacturing
and wholesale and retail trading" as a cash generating unit
(CGU) and entire Goodwill has been allocated to this CGU. In
accordance with Ind AS 36, "Impairment of Assets" ('Ind AS
36'), the Company performs annual impairment assessment
of Goodwill by comparing the carrying amount of the CGU,
including the goodwill, with the recoverable amount of the
CGU, which is higher of its value in use and fair value less
costs of disposal.
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Our audit procedures in relation to impairment assessment
of goodwill included, but were not limited to, the following:
• Obtained an understanding of management's process
for identification of CGU and impairment assessment
of goodwill and assessed the appropriateness of the
Company's accounting policies relating to impairment
of non-financial assets in accordance with Ind AS 36;
• Evaluated the design and tested the operating
effectiveness of key controls over the impairment
assessment process;
• Obtained management's external valuation expert's
report for determining recoverable amount of CGU and
assessed the objectivity, professional competency and
independence of the management expert;
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Key audit matters
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How our audit addressed the key audit matters
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The management's assessment of the recoverable amount
of CGU involves significant management judgement and
estimation such as forecasting future cash flow projections,
expected growth rates and discount rate which are affected
by management's future market expectations and economic
conditions.
Considering the significance of the amounts involved and
high estimation uncertainty and significant management
judgment involved in determining recoverable amount, the
impairment assessment of goodwill is considered as a key
audit matter for the current year audit.
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• Involved auditor's expert to assist in evaluating
appropriateness of valuation methodology and
reasonableness of the assumptions used by the
management's expert to calculate the recoverable value
of the CGU;
• Traced the cash flow projections used in the impairment
assessment with approved business plans;
• Assessed the reasonableness of the assumptions
used in the valuation model based on historical trends,
current developments, and future plans;
• Assessed the robustness of the cashflow projections
by comparing projections for previous year with actual
results for such years to understand significant variance,
if any;
• Tested the arithmetical accuracy of valuation model and
performed sensitivity analysis on the key assumptions
such as expected growth rates and discount rate
to evaluate the possible variation on the current
recoverable amount to ascertain the sufficiency of
headroom available; and
• Assessed the appropriateness and adequacy of the
disclosures made in the standalone financial statements
in accordance with the requirements of applicable
accounting standards.
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Valuation of Employee Stock Options Plan (ESOP)
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Refer note 2(p) to the material accounting policy information
and note 26 of the accompanying standalone financial
statements for the related disclosures of ESOP
The management of the Company has framed various ESOP
schemes such as time linked and non-market performance
linked, under which remuneration is paid to the employees
for services received in the form of equity-settled share-
based payment transactions.
In accordance with the principles of Ind AS 102, "Share Based
Payments" ('Ind AS 102'), the fair value of the aforesaid
employee stock options determined as at the grant date is
recognised as employee compensation cost over the vesting
period of such options.
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Our audit procedures in relation to valuation of ESOP included,
but were not limited to, the following:
• Assessed the appropriateness of the Company's
accounting policies relating to ESOP in accordance with
Ind AS 102;
• Obtained an understanding of the terms and
arrangements of various ESOPs;
• Evaluated the design and tested the operating
effectiveness of key controls over the methodology,
models and assumptions used by the management to
determine the fair value of shares and options granted
as at the respective grant dates;
• Obtained management's external valuation expert's
report on fair value of shares and options granted and
assessed the professional competency, objectivity and
independence of the management expert;
• Involved auditor's expert to assist in evaluating
appropriateness of valuation methodology and
reasonableness of assumptions used by the
management's expert in determining the fair value of
shares and options granted;
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Key audit matters
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How our audit addressed the key audit matters
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The fair valuation of options granted to employees for the
services rendered has been performed by management's
external valuation expert as at the grant date using Black-
Scholes valuation model which requires the management
to make certain key estimates and assumptions including
determination of fair value of underlying equity share,
expected volatility, dividend yield, risk-free interest rate and
achievement of performance conditions.
Further, the fair valuation of underlying equity share as at
grant date has been performed by managements expert
applying appropriate weight on the value derived from
two methods i.e. Discounted Cash-Flow model ('DCF') and
Comparable Company Multiple ('CCM'), which involves
the key estimates and assumptions such as discount rate,
expected growth rates and identification of appropriate
comparable companies for the CCM method of valuation.
Considering significant management judgments and
estimates involved and materiality of amount involved,
valuation of ESOP is considered as a key audit matter for the
current year audit.
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• Assessed the reasonableness of the management
assumptions and estimates and verified the accuracy
of inputs used for the valuation purpose on a sample
basis;
• Traced the cash flow projections used in determining
fair value of shares with approved business plans;
• Tested the arithmetical accuracy of computation of
share-based payment expense; and
• Assessed the appropriateness and adequacy of the
disclosures made in the standalone financial statements
in accordance with the requirements of applicable
accounting standards.
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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
loss, 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
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 41(viii) to
the standalone financial statements,
no funds have been received by the
Company from any person(s) or
entity(ies), 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
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 Order') 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 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 33 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 41 (vii) 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 person(s) or entity(ies), 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
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 43 to the standalone
financial statements and based on our
examination which included test checks,
except for matters mentioned below, the
Company, in respect of financial year
commencing on or after 1 April 2024, has
used an accounting software for maintaining
its books of account which has a feature of
recording audit trail (edit log) facility and the
same has 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
exception given below. Furthermore, except
for matters mentioned below, the audit trail
has been preserved by the Company as
per the statutory requirements for record
retention.
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Nature of exception noted
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Details of exception
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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
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The audit trail feature was not enabled at database level for accounting software
to log any direct data changes used for maintenance of all accounting records by
the Company
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Instances of accounting software
maintained by a third party where we
are unable to comment on the audit trail
feature.
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The accounting software used for maintenance of payroll records of the Company
is operated by a third-party software service provider. In the absence of any
information on the existence of audit trail feature in the 'Independent Service
Auditor's Assurance Report on the Description of Controls, their Design and
Operating Effectiveness' ('Type 2 report' issued in accordance with AICPA Standard
on Attestation Engagement SSAE 18 : Service organisation), we are unable to
comment on whether audit trail feature at the database of the said software was
enabled and operated throughout the year.
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For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Neeraj Goel
Partner
Place: Gurugram Membership No.: 099514
Date: 29 April 2025 UDIN: 25099514BMJKDL8797
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