o) Provisions
Provisions are recognized when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. When the Company expects some or
all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is
recognized as a separate asset, but only when the
reimbursement is virtually certain. The expense
relating to a provision is presented in the statement
of Profit and Loss net of any reimbursement.
Provisions are measured at the present value of
management's best estimate of the expenditure
required to settle the present obligation at the end
of the reporting period. The discount rate used to
determine the present value is a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
p) Earnings per share
Basic earnings per share is calculated by dividing the
net profit or loss for the period attributable to equity
shareholders (after deducting attributable taxes)
by the weighted average number of equity shares
outstanding during the period. The weighted average
number of equity shares outstanding during the
period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the weighted
average number of shares outstanding during the
period are adjusted for the effects of all dilutive
potential equity shares.
Potential ordinary shares shall be treated as dilutive
when, and only when, their conversion to ordinary
shares would decrease earnings per share or
increase loss per share from continuing operations.
q) Taxes
Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the
reporting date in the countries where the Company
operates and generates taxable income.
Current income tax relating to items recognized
outside profit or loss is recognized outside profit
or loss (either in other comprehensive income
or in equity). Current tax items are recognized in
correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred tax
Deferred tax is provided on temporary differences
between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable
temporary differences. Deferred tax assets are
recognized for all deductible temporary differences
and any unused tax losses. Deferred tax assets are
recognized to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences and unused tax losses can
be utilized. Deferred tax relating to items recognized
outside profit or loss is recognized outside profit or loss
(either in other comprehensive income or in equity).
Deferred tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit
or loss is recognized outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognized in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are
offset, if a legally enforceable right exists to set¬
off current tax assets against current tax liabilities
and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same
taxation authority.
r) Cash and cash equivalents
Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months
or less, which are subject to an insignificant risk of
changes in value.
s) Contingent liabilities
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or
more uncertain future events beyond the control
of the Company or a present obligation that is not
recognized because it is not probable that an outflow
of resources will be required to settle the obligation. A
contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses
its existence in the financial statements.
t) Significant management judgements in applying
accounting policies and estimation uncertainty
The following are the critical judgments and the key
estimates concerning the future that management
has made in the process of applying the Company's
accounting policies and that may have the most
significant effect on the amounts recognized in the
financial Statements or that have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year.
i. Useful lives of depreciable/amortizable assets/
Right of use assets - Management reviews its
estimate of the useful lives of depreciable/
amortizable/Right of use assets at each
reporting date, based on the expected utility
of the assets. Uncertainties in these estimates
relate to technical and economic obsolescence
that may change the utility of certain software,
IT equipment and other plant and equipment.
ii. Defined benefit obligation (DBO) -
Management's estimate of the DBO is based
on a number of critical underlying assumptions
such as standard rates of inflation, mortality,
discount rate and anticipation of future salary
increases. Variation in these assumptions may
significantly impact the DBO amount and the
annual defined benefit expenses.
iii. Evaluation of indicators for impairment of
assets - The evaluation of applicability of
indicators of impairment of assets requires
assessment of several external and internal
factors which could result in deterioration of
recoverable amount of the assets.
iv. Recognition of deferred tax assets - The extent
to which deferred tax assets can be recognized
is based on an assessment of the probability
of the future taxable income against which the
deferred tax assets can be utilized.
v. Provision for income tax - Determining
the provision for income taxes, including
amount expected to be paid/recovered for
uncertain tax positions.
vi. Contingent liabilities - The Company is the
subject of legal proceedings and tax issues
covering a range of matters, which are pending
in various jurisdictions. Due to the uncertainty
inherent in such matters, it is difficult to predict
the final outcome of such matters. The cases
and claims against the Company often raise
difficult and complex factual and legal issues,
which are subject to many uncertainties,
including but not limited to the facts and
circumstances of each particular case and
claim, the jurisdiction and the differences
in applicable law. In the normal course of
business, management consults with legal
counsel and certain other experts on matters
related to litigation and taxes. The Company
accrues a liability when it is determined that an
adverse outcome is probable and the amount
of the loss can be reasonably estimated.
vii. Inventories - The Company estimates the net
realizable values of inventories, taking into
account the most reliable evidence available
at each reporting date. The future realisation
of these inventories may be affected by future
technology or other market-driven changes that
may reduce future selling prices. Further, the
Company also estimate expected loss due to
shrinkage, pilferage etc. along with NRV impact
on old inventory taking into account most reliable
information available at the reporting date.
viii. Employee stock option plan - Assessment
of appropriate input to the Black Scholes
valuation model for valuation of share based
payment including expected life of share
option, volatility and divided yield and making
assumption about them.
ix. Fair values hierarchy-Assessment of reliability
of inputs considered for fair valuation of
financial assets and liabilities falls under
hierarchy Level 3.
u) Standard issued but not yet effective
Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. During the
year ended March 31, 2025, MCA has not notified
any new standards or amendments to existing
standards, but not yet effective as of March 31,2025.
(b) Terms/rights attached to equity shares/warrants
The Company has only one class of equity shares having par value of H 10 per share. Each holder of equity shares is entitled
to one vote per share. The Company declares and pays dividend in Indian rupees. Dividend, if any, proposed by the board of
Directors is subject to approval of shareholders in an annual general meeting except in the case of interim dividend. In the
event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by
the shareholders.
*During the year ended 31 March 2024, the Company had allotted of 200,000 equity shares at H10 per equity share to the eligible employees upon
exercise of option under the employee stock option scheme.
(a) The Company restructured its business in the financial year 2010-11 resulting in creation of Capital Reserve amounting to
H 60,523.24 lakhs. The aforementioned reserve has been reconciled to amount recognised in the books of accounts except
for H 365.36 lakhs. In view of very old matter, probability of reconciliation is remote and also being amount not material in
comparison to total capital reserve, the Company, as conservative measure, has decided to carry the same under Capital
Reserve. The management believes that there is no impact of the same on statement of profit and loss.
(b) Nature and purpose of other reserves:
(i) Securities premium
Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the
provisions of the Companies Act, 2013.
(ii) Capital reserve:
This reserve represents the excess of net assets taken, over the cost of consideration paid at the time of amalgamation
done in prior years. This reserve is not available for the distribution to the shareholders.
(iii) Employees' stock options outstanding account
The account is used to recognise the grant date value of options issued to employees under Employee stock option plan
and adjusted as and when such options are exercised or otherwise expire.
(iv) Retained earnings
Retained earnings comprise of the Company's accumulated undistributed profits/(losses) after taxes.
Notes:
(a) Vehicle loan of H 150.00 lakhs from ICICI Bank Limited against which outstanding H 127.77 lakhs (31 March 2024: H 143.92
lakhs) carries an interest @ 10.25% per annum and repayable in 84 EMI (remaining EMIs 67). The loan is secured against
hypothecation of vehicle.
Vehicle loan of H 71.68 lakhs from Axis Bank Limited against which outstanding H 49.86 lakhs (31 March 2024: H 62.63
lakhs) carries an interest @ 8.75% per annum and repayable in 60 EMIs (remaining EMIs 39). The loan is secured against
hypothecation of vehicle.
Commercial vehicle loans of H 299.18 lakhs from HDFC Bank Limited against which outstanding H 209.41 lakhs (31 March 2024:
H 262.27 lakhs) carries an interest @ 8.56% to 9.17% per annum and each loan repayable in 60 EMIs (remaining EMIs 38-39).
The loans are secured against hypothecation of respective vehicles.
Vehicle loan of H 638.00 lakhs from PNB Bank against which outstanding H 632.68 lakhs (31 March 2024: H Nil) carries an interest
@ 8.55% per annum and repayable in 84 EMI (remaining EMIs 83). The loan is secured against hypothecation of vehicle.
Commercial vehicle loans of H 548.75 lakhs from HDFC Bank Limited against which outstanding H 503.96 lakhs (31 March 2024:
H Nil) carries an interest @ 9.00% per annum and each loan repayable in 60 EMIs (remaining EMIs 54). The loans are secured
against hypothecation of respective vehicles.
(b) Refer note 42 and 42(a) for disclosure of fair values in respect of financial liabilities measured at amortised cost and analysis
of their maturity profiles.
(i) The Company has certain cases/disputes aggregating to H 1,586.94 lakhs (31 March 2024: H1,579.67 lakhs) involving
customers, vendors and ex-employees. Whilst the impact of these litigations on these financial statements can only be
ascertained on the settlement of such cases/disputes, management has broadly assessed that based on the merits of
such cases, the Company has reasonably good chances of succeeding and accordingly, no provision has been recognised
in these standalone financial statements.
(ii) The Company has certain litigations related to Sales tax and Values added tax (VAT) pending under West Bengal Value
Added Tax Act, 2003 aggregating to H 11.97 lakhs (31 March 2024: H 2,250 lakhs), The Uttar Pradesh Value Added Tax Act,
2008 aggregating to H 663.98 lakhs (31 March 2024: H 261.72 lakhs), The Haryana Value Added Tax Act, 2003 aggregating
to H 372.10 lakhs (31 March 2024: H 59.79 lakhs) and The Bihar Value Added Tax Act, 2005 H Nil (31 March 2024 H 381.69
lakhs). Whilst the impact of these litigations on these financial statements can only be ascertained on the settlement
of such cases/disputes, management has broadly assessed that based on the merits of such cases, the Company
has reasonably good chances of succeeding and accordingly, no provision has been recognised in these standalone
financial statements.
(iii) The Company has pending litigation related to service tax under Finance Act, 1994 amounting to H 302.08 lakhs (31
March 2024: H 302.08 lakhs). Whilst the impact of these litigations on these financial statements can only be ascertained
on the settlement of such cases/disputes, management has broadly assessed that based on the merits of such cases,
the Company has reasonably good chances of succeeding and accordingly, no provision has been recognised in these
standalone financial statements.
36 Segment information
In accordance with Ind AS 108, the Board of directors, being the Chief operating decision maker of the Company, has determined
that the Company is engaged in the business of retail trade of garments, textiles and accessories in India and there are no separate
reportable segments as per Ind AS 108. The Company's operations are confined only to India. There are no customer accounting
for more than 10% of its revenue.
37
a) During the year provision of H 1,841.10 lakhs (31 March 2024: H 1,646.50 lakhs) on account of written down of inventories has
been charged to Statement of Profit and Loss and included in change of inventories of stock in trade.
b) The Company carries a provision of H 1,969.55 lakhs as at 31 March 2025 (31 March 2024: H 2,343.16 lakhs) in view of
management this provision is adequate to meet future realisation loss on sale of old inventories.
c) In the normal course of business, due to the nature and volume of operations, certain inventory items experienced barcode
damage. Such items were subsequently either sold under newly generated barcodes or disposed of through bulk scrap sales.
This resulted in mismatches between the item-level inventory records, which were identified through physical verification of
inventories and subsequent reconciliation with the item-level inventory. The variances have been appropriately adjusted in
the books of account (including inventory records) against the provision of H 2,214.73 lakhs for inventories, which had been
created in earlier years based on consistent practice followed by the Company.
A Gratuity
The Company operates gratuity plan wherein every employee is entitled to benefit equivalent to 15 days' salary (includes
dearness allowance) last drawn for each completed year of service. The same is payable upon termination of service, or
retirement, or death whichever is earlier. The benefit vests after five years of continuous service. Gratuity benefits are valued
in accordance with the Payment of Gratuity Act, 1972.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and
amounts recognised in the balance sheet for the Gratuity plan:
Notes:
1 The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet
date for the estimated term of obligations.
2 The estimates of future salary increase considered takes into account the inflations, seniority, promotion and other
relevant factors on long term basis.
3 The weighted average duration to the payment of these cash flows is 1.63 years (31 March 2024: 1.71 years).
B Defined contribution scheme
The Company's state governed provident fund scheme and employee state insurance scheme are considered as defined
contribution plans. The contribution under the schemes is recognised as an expense in the statement of profit and loss, when
an employee renders the related service. There are no other obligations other than the contribution payable to the respective
funds. The amount of contribution made by the Company to employees' provident fund and employee state insurance is
H 810.83 lakhs and H 174.41 Lakhs, respectively (31 March 2024: H 435.30 lakhs and H 107.11 lakhs).
B Fair values hierarchy
The fair value of financial instruments as referred to in note (A) above has been classified into three categories depending
on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for
identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].
Level 1: Quoted prices for identical instruments in an active market;
Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and
Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or
in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable
current market transactions in the same instrument nor are they based on available market data.
C Fair value of instruments on recurring basis measured at amortised cost
Fair value of instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are
calculated using Level 3 inputs:
The management assessed that fair values of cash and cash equivalents, trade payables, Interest accrued on bank deposits
with banks, other current financial assets and other current financial liabilities approximates their carrying amounts largely
due to the short-term maturities of these instruments.
The fair values of borrowings, lease liabilities and other financial assets and liabilities are considered to be the same as their
fair values, as there is an immaterial change in the lending rates.
42(a) Financial risk management
i) Risk manage ment framework
The Company's activities expose to market risk, liquidity risk and credit risk. This note explains the sources of risk which the
entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company's receivables. The carrying amount of financial assets
represents the maximum credit exposure.
- cash and cash equivalents,
- loans and receivables carried at amortised cost, and
- deposits with banks
- financial guarantee
a) Credit risk management
The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring
defaults other counterparties, identified either individually or by the company, and incorporates this information
into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different
characteristics. The Company assigns the following credit ratings to each class of financial assets based on the
assumptions, inputs and factors specific to the class of financial assets.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature
of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis
of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity of Company based on their contractual
maturities for all non-derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances as the impact of discounting is not significant.
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices
- will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
a) Interest rate risk
i) Liabilities
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. As at 31 March
2025, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.
Interest rate risk exposure
Below is the overall exposure of the Company to interest rate risk:
ii) Assets
The Company's fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not
subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will
fluctuate because of a change in market interest rates.
43 Capital management
The Company's capital management objectives are
- to safeguard their ability to continue as a going concern
- to maintain an optimal capital structure to reduce the cost of capital
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the
face of balance sheet.
Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure while
avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes of debt. The
Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
44 Advertising advance to Bennett, Coleman and Company Limited (BCCL)
The Company executed an Advertisement contract dated 7 July 2015 for the period of 5 years with Bennet Coleman and Company
Limited (BCCL), pursuant to which the Company has agreed to give advertisements of H 5,000 lakhs, being the total commitment
and BCCL has extended credit facility of H 3,250 lakhs to be utilized in accordance with the terms of aforesaid agreement. The total
commitment was reduced to H 2,500 lakhs and the credit amount was reduced to H 1,625 lakhs vide 1st amendment agreement
dated 17 July 2022. The aforesaid agreement was extended five times for a term of one year each and the management is confident
of its renewal beyond July 7, 2025 basis its ongoing discussion with BCCL and past practice. The Company has paid H 1,494.23 lakhs
till year ended 31 March 2025 (outstanding since April, 2019,) pursuant to this contract and disclosed this amount under "other
non-current assets" as at 31 March 2025. Further, the management is confident of utilising the above advance with in extended
contractual period and therefore, has considered the aforesaid advance as good and recoverable.
46 Ind AS 116 - Leases
The Company has leases for the office, warehouse, retail stores and others. With the exception of short-term leases and leases with
variable lease payments, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The lease terms for
office premises, warehouse and store sites are for an period of one year to sixteen years and having a lock-in period ranging from
one to three years. The lease are further renewable on expiry of total lease term subject to mutual consent of both the parties. The
Company also sub lease portion of retail stores. However, the sub-lease income is not material to the total lease outflows.
For movement of lease liability refer note no. 3(i) and for maturity profile of lease liability refer note 42(a).
47 The Company has performed physical verification of property, plant and equipment during the year ended 31 March 2023 in
accordance with the phased program of conducting such verification over a period of 3 years. However, the Company is in
process of performing related reconciliation of such physical verification with the underlying fixed asset register maintained by
the Company. The management does not expect any adjustment to be material to the financial statements.
48 No adjusting or significant non-adjusting events have occurred between 31 March 2025 and the date of authorisation.
49 Other Statutory Information
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property.
(ii) The Company did not have any transactions with struck off companies during the current year and the previous year, except
for transactions with one company during the year. The details of the outstanding balance with the struck off company
are as follows:
(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous financial year.
(vii) The Company has not advanced or loaned or invested funds during the year to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(viii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) during the
year and previous year, with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(ix) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year and previous year in the tax assessments under the Income Tax Act, 1961 (such as, search
or survey or any other relevant provisions of the Income Tax Act, 1961
(x) Borrowings obtained during the year and previous year by the Company from banks and financial institutions have been
applied for the purposes for which such loans were taken.
(xi) The Company has been sanctioned working capital limit from bank on the basis of security of current assets. There are
following differences between books of account of the respective quarters and latest quarterly returns/statements filed by the
Company with the bank:
52 The Board of Directors of the Company has not declared any dividend during the current year and previous year.
53 Previous year's figures has been regrouped and/or reclassified wherever necessary to conform to the current year's groupings
and classifications, however, the regrouping is not material therefore, details are not given.
As per our report of even date attached For and on behalf of the Board of Directors of V2 Retail Limited
For Singhi & Co. Ram Chandra Agarwal Uma Agarwal Akash Agarwal
Chartered Accountants Chairman and Managing Director Whole Time Director Chief Executive Officer
Firm Registration Number: 302049E DIN: 00491885 DIN: 00495945 DIN: 03194632
Bimal Kumar Sipani Pratik Adukia Shivam Aggarwal
Partner Chief Financial Officer Company Secretary
Membership No. 088926 M.No. A55785
Place: Noida (Delhi-NCR) Place: Gurgaon
Date: 27 May 2025 Date: 27 May 2025
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