We have audited the accompanying standalone financial
statements of Arvind Fashions Limited (the "Company"),
which comprise the Balance Sheet as at March 31,2025,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flows and
the Statement of Changes in Equity for the year ended on
that date, and notes to the financial statements, including
a summary of material accounting policies and other
explanatory information.
In our opinion and to the best of our information and
according to the explanations given to us, 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
prescribed under section 133 of the Act, ("Ind AS") and
other accounting principles generally accepted in India, of
the state of affairs of the Company as at March 31, 2025,
and its profit, total comprehensive income, its cash flows
and the changes in equity for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the standalone financial
statements in accordance with the Standards on Auditing
("SA"s) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further
described in the Auditor's Responsibility 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 made thereunder, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI's Code of Ethics. We
believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion
on the standalone financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
standalone financial statements for the financial year ended March 31, 2025. 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. We have determined the matters described below to be the key audit
matters to be communicated in our report.
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S r
N0" Key Audit Matter
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Auditor's Response
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1. Revenue Recognition (Wholesale business): [Assertion- Cut off]
and provision for sales return.
Revenue recognition involves certain key judgements relating to
identification of distinct performance obligations, determination
of transaction price of the identified performance obligations, the
appropriateness of the basis used to measure revenue recognized
at a point of time and provision for sales return.
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Principal Audit Procedures Performed:
The details of audit procedures performed by us are as
follows:
• Evaluated the company's accounting policies with
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respect to revenue recognition and provision for sales
return in accordance with Ind As 115 "Revenue from
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Contracts with customer".
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Cut-off is the key assertion in so far as revenue recognition is
concerned.
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• Selected a sample and tested the operating
effectiveness of the internal control, relating to
identification of the distinct performance obligations
and determination of transaction price. We carried
out a combination of procedures involving enquiry
and observation, re-performance and inspection of
evidence in respect of operation of these controls.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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There is a risk that revenue is recognized on sale of goods around
the year end without substantial transfer of control and is not
in accordance with Ind AS-115 "Revenue from Contracts with
Customers".
Also, Company has contracts with customers which entitles them
to right of return. At year end, amount of expected returns that
have not yet been settled with the customers are estimated and
accrued.
Estimating the amount of such accrual at year end is considered a
key audit matter due to assumptions and judgments required to
be made by management.
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• We obtained an understanding of process and
evaluated the design and operating effectiveness of
key controls, over timing of revenue recognition and
calculating, reviewing and approving sales returns.
• Selected samples and performed the following
procedures:
- Read, analyzed and identified the distinct
performance obligations in these contracts and
compared these performance obligations with
that identified and recorded by the Company.
- For the selected samples, tested with the
performance obligations specified in the
underlying contracts.
- Performed analytical procedures for
reasonableness of revenues with comparative
period.
- Analyzed historical trends for returns and held
discussions with management to understand
changes in provisioning norms/additional
provisions made based on management's
assessment of market conditions and based on
that, we have tested the estimates of returns
related accruals with underlying documentation
such as management approved norms,
customer agreements, sales data and customer
reconciliations, as applicable.
• At the year-end on the selected samples, we have
performed early and late cut off to test that the
revenue is recorded in the appropriate period. We
have traced sales with proof of delivery (POD) to
confirm the recognition of sales.
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2.
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Assessment of Impairment of Investment in Subsidiaries -
The carrying values of Company's investments in subsidiaries
is assessed annually by management for potential indicators
of impairment by reference to the requirements of Ind AS 36
'Impairment of Assets".
The company has direct equity investments (including perpetual
debt) of ' 1,824.60 crores and ' 46.91 crores in Arvind Lifestyle
Brands Limited (ALBL) and Arvind Youth Brands Private Limited
(AYBPL) respectively and indirect investment in AYBPL from ALBL
is ' 68.16 crores. [Refer note 7(a)].
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Principal Audit Procedures Performed:
• Evaluated the Company's accounting policies with
respect to impairment of financial asset in accordance
with Ind AS 36 "Impairment of Assets".
• We have obtained and discussed with management
and evaluated the key judgements / assumptions
underlying management's assessment of potential
indicators of impairment.
• Evaluated the design and implementation of the
relevant internal controls and tested the operating
effectiveness of such internal controls over impairment
assessment process, which inter-alia included the
management's control over reasonableness of key
assumptions considered in related forecasts of
future cash flows principally related to revenue and
profitability growth, terminal growth rate and discount
rates used.
We obtained the investment valuations from the
management and performed the following substantive
procedures:
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S r
N0" Key Audit Matter
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Auditor's Response
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The Company has carried out detailed evaluation of recoverable
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• Assessed the reasonableness of the key business
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value of its equity investments in ALBL and AYBPL given considering
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assumptions such as revenue growth and EBIDTA
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various factors, as further explained in Note 7(a)(6) to the
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margins, by understanding the management's plan
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standalone financial statements. As per Ind AS 36, the Company
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and performing retrospective testing.
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has considered the recoverable amount to be higher of (i) value in
use and (ii) fair value less cost to sell as applicable. Value is use has
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• Evaluated the valuation approach and assumptions
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been determined, which requires management to make significant
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used by the independent valuation expert appointed
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estimates and assumptions related to forecasts of future cash
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by the Management. This involved assessing
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flows principally related to revenue, profitability growth, terminal
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the competence, expertise and objectivity of the
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growth rate and discount rates used. Furthermore, the value in
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independent valuer.
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use is highly sensitive to changes in some of the inputs used in
forecasting the future cash flows.
Fair value less cost to sell, wherever applicable, has been
determined using the Comparable Companies Multiple (CCM)
approach, as evaluated by management with the assistance of an
external valuation expert.
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• Where potential indicators of impairment were
identified, we evaluated management's impairment
assessment and assumptions around key drivers
of the cash flow forecasts, discount rates, expected
growth rates and terminal growth rates used by
comparison with available financial information
including considerations of audited financial
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Based on such assessment the management has concluded
that the carrying value of the equity investments is good and
recoverable. Any adverse changes in these assumptions could
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statements of the subsidiary.
• With internal fair-value specialists, we evaluated the
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have a significant impact on either the recoverable value, or the
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reasonableness of (1) the valuation methodology and
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amount of any impairment charge, or both.
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(2) the discount rate considered, by
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Accordingly, we identified the assessment of potential impairment
of investments in above mentioned subsidiaries as a key audit
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• Testing the source information underlying the
determination of the discount rate.
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matter because materiality of equity investments in subsidiaries
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• Developing a range of independent estimates and
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and impairment assessment involves significant degree of
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comparing those to the discount rate selected by
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management judgement in determining the key assumptions.
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management.
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• We also performed sensitivity analysis to determine
impact of changes in key assumptions both individually
and in aggregate.
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INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR'S REPORT THEREON
• The Company's Board of Directors is responsible
for the other information. The other information
comprises the information included in the Director's
report including annexures thereof, but does not
include the consolidated financial statements,
standalone financial statements and our auditor's
report thereon.
• Our opinion on the standalone financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
• In connection with our audit of the standalone
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent with
the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise
appears to be materially misstated.
• If, based on the work we have performed, we
conclude that there is a material misstatement of
this other information, we are required to report that
fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND
BOARD OF DIRECTORS FOR THE STANDALONE
FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for
the matters stated in section 134(5) of the Act with
respect to the preparation of these standalone
financial statements that give a true and fair view of
the financial position, financial performance including
other comprehensive income, cash flows and changes in
equity of the Company in accordance with the accounting
principles generally accepted in India, including Ind AS
specified under section 133 of the Act. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding 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.
In preparing the standalone financial statements,
management and Board of Directors are 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 intend to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Company's Board of Directors is also responsible for
overseeing the Company's financial reporting process.
AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF
THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal financial
controls 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 standalone financial
statements in place and the operating effectiveness
of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the management.
• Conclude on the appropriateness of management's
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.
• 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.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or
in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the
standalone financial statements may be influenced.
We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the
effect of any identified misstatements in the standalone
financial statements.
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 financial controls
that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1. As required by Section 143(3) of the Act, based on our
audit we report that:
a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books.
c) The Balance Sheet, the Statement of Profit and
Loss including Other Comprehensive Income,
the Statement of Cash Flows and Statement of
Changes in Equity dealt with by this Report are in
agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified
under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on March 31,
2025 taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2025 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 to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer
to our separate Report in "Annexure A". Our
report expresses an unmodified opinion on
the adequacy and operating effectiveness of
the Company's internal financial controls with
reference to standalone financial statements.
g) With respect to the other matters to be included
in the Auditor's Report in accordance with the
requirements of section 197(16) of the Act, as
amended, in our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid by the
Company to its directors during the year is in
accordance with the provisions of section 197
of the Act.
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 has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements
- Refer Note 25 to the standalone
financial statements;
ii. The Company did not have any long-term
contracts including derivative contracts
for which there were any material
foreseeable losses.
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Company.
iv. (a) The Management has represented that,
to the best of its knowledge and belief,
as disclosed in the note 39(a)(iv)(I) to
the financial statements no funds have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediaries"),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, directly
or indirectly lend or invest in other
persons or entities identified in any
manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries")
or provide any guarantee, security
or the like on behalf of the
Ultimate Beneficiaries.
(b) The Management has represented,
that, to the best of its knowledge and
belief, as disclosed in the note 39(a)
(iv)(II) to the financial statements,
no funds have been received by
the Company from any person(s)
or entity(ies), including foreign
entities ("Funding Parties"), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, directly or indirectly, lend or
invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures
performed that have been considered
reasonable and appropriate in the
circumstances, nothing has come
to our notice that has caused us to
believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above,
contain any material misstatement.
v. The final dividend proposed in the previous
year, declared and paid by the Company
during the year is in accordance with
section 123 of the Act, as applicable.
As stated in note 42 to the standalone
financial statements, the Board of Directors
of the Company has proposed final dividend
for the year which is subject to the approval
of the members at the ensuing Annual
General Meeting. Such dividend proposed
is in accordance with section 123 of the Act,
as applicable.
vi. Based on our examination, which included
test checks, the Company has used an
accounting software for maintaining its
books of account for the year ended
March 31, 2025 which has a feature of
recording audit trail (edit log) facility and
the same has 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 the audit trail feature being
tampered with.
Additionally audit trail has been preserved
by the Company as per the statutory
requirements for record retention
as stated in note 39(b) of standalone
financial statement.
2. As required by the Companies (Auditor's Report)
Order, 2020 ("the Order") issued by the Central
Government in terms of Section 143(11) of the Act,
we give in "Annexure B" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 117365W)
Kartikeya Raval
(Partner)
(Membership No. 106189)
(UDIN: 25106189BMNRJG9903)
Place: Ahmedabad
Date: May 17, 2025
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