We have audited the accompanying standalone financial statements of Khadim India Limited (“the Company”),which comprise the standalone Balance Sheet as at March 31, 2025, the standalone Statement of Profit and Loss(including Other Comprehensive Income), the standalone Statement of Changes in Equity and the standaloneStatement of Cash Flows for the year then ended, notes to the standalone financial statements including materialaccounting policies and other explanatory information (hereinafter referred to as “standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaidstandalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in themanner so required and give a true and fair view in conformity with the Indian Accounting Standards, prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended(“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as atMarch 31, 2025, its profit, total comprehensive income, changes in equity and its cash flows for the year ended onthat date.
We conducted our audit of standalone financial statements in accordance with the Standards on Auditing (SAs)specified under Section 143(10) of the Act. Our responsibilities under those standards are further described inthe Auditor’s Responsibilities for the Audit of the Standalone Financial Statements paragraph of our report. Weare independent of the Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India ('ICAI') together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the rules made thereunder, and we have fulfilled ourethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalonefinancial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our auditof the standalone financial statements of the current period. These matters were addressed in the context ofour audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We have determined the matters described below to be the keyaudit matters to be communicated in our report
Sr. Key Audit Matter
Auditor’s Response
1. Scheme of Arrangement
Principal Audit Procedures Performed
The Board of Directors of the Company, at itsmeeting dated 29th September, 2023, had approveda 'Scheme of Arrangement ('the Scheme’) betweenKhadim India Limited (KIL) and KSR FootwearLimited (KFL) and their respective shareholders and
Our audit procedures related to the checking andverification of 'the Scheme’ is as detailed below:
Ý Obtained and checked the Board Resolutionapproving the Scheme;
creditors under relevant provisions of the Companies
Ý Obtained the copy of the Scheme sanctioned
Act, 2013. Pursuant to the Scheme, KIL shall demerge
by NCLT;
its Distribution Business, as a going concern, into KFL.The Hon’ble National Company Law Tribunal, KolkataBench (NCLT), vide its Order dated 27th March,2025, has sanctioned the Scheme. Accordingly, theAppointed Date and Effective Date of the Scheme is1st April, 2025 and 1st May, 2025 respectively.
Ý Checked the approvals in the form of 'NoObjection’ from respective stock exchanges,NSE and BSE;
Sr.
Key Audit Matter
Upon the Scheme being sanctioned by the Hon'ble
Ý Checked the relevant accounting standard
NCLT and in terms of the requirements of Accounting
(Ind AS) regarding presentation and disclosure
Standards (Ind. AS), the operations pertaining to
of its Distribution Business as 'Discontinued
the distribution business have been presented
Operations'.
as 'Discontinued Operations'. Consequently, thestandalone financial statements of the Company
Audit Conclusions
for the comparative periods and for the year ended
Our procedures did not identify any material
31st March, 2025 have been presented accordingly.
Refer Note 35 to the Notes to Standalone FinancialStatements.
exceptions.
2.
Revenue Recognition
In order to address the risk of misstatement
Revenue from the sale of goods (hereinafter referred
related to timing of revenue recognition on sale
to as “Revenue”) is recognized when the Company
to Wholesale customers, we have performed the
performs its obligation to its customers, the amount
following procedures: -
of revenue can be measured reliably and recovery
Our audit approach was a combination of test
of the consideration is probable. The timing of such
of internal controls and substantive procedures
recognition is when the control over the same istransferred to the customer, which is upon delivery.
including:
• Assessing the appropriateness of the
The timing of revenue recognition is relevant to
Company's revenue recognition accounting
the reported performance of the Company. The
policies in line with Ind AS 115 (“Revenue
management considers revenue as a key measure for
from Contracts with Customers”) and testing
evaluation of performance. There is a risk of revenue
thereof.
being recorded before control is transferred.
• Evaluating the integrity of the generalinformation and technology control
The Company operates through two different
environment and testing the operating
revenue streams - sale to Wholesale customers andRetail customers.
effectiveness of key IT application controls.
• Evaluating the design and implementation
The Retail revenues consist of small transactions
of Company's controls in respect of revenue
under cash and carry model. Hence the likelihood
recognition. Testing the effectiveness of such
of occurrence and magnitude of a potential
controls over the timing of recognition of
misstatement arising out of revenue recognition
revenue at the year-end.
before transfer of control is minimal.
• Testing the effectiveness of such controls overthe timing of recognition of revenue at the year
Accordingly, we focused our work on the risk of
end.
revenue being recognized before control is transferred
in respect of its revenue from Wholesale customers.
• Testing the supporting documentation forsales transactions recorded during the period
Refer Note 3.9 to the Standalone Financial
closer to the year end and subsequent to the
Statements - Material Accounting Policies.
year end, including examination of credit notesissued after the year end to determine whetherrevenue was recognized in the correct period.
• Performing analytical procedures on currentyear revenue based on monthly trends andwhere appropriate, conducting furtherenquiries and testing.
The Company's Board of Directors are responsible for the other information. The other information comprisesthe information included in the Management Discussion and Analysis, Board's Report including annexures tothe Board's Report, Corporate Governance and Shareholder's Information but does not include the consolidatedfinancial statements and standalone financial statements and our auditor's reports thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not expressany form of assurance or conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the otherinformation and in doing so, consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Act with respectto the preparation and presentation of these standalone financial statements that give a true and fair view ofthe financial position, financial performance including other comprehensive income, cash flows and changesin equity of the Company in accordance with the IND AS specified under Section 133 of the Act and otheraccounting principles generally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatements, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible forassessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless the Board of Directors either intends to liquidatethe 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.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includesour opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conductedin accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be expectedto 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 skepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether dueto fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement 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 proceduresthat are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible forexpressing our opinion on whether the Company has adequate internal financial controls with reference tostandalone financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting in preparationof standalone financial statements and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company's ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the dateof our auditor's report. However, future events or conditions may cause the Company to cease to continue asa going concern.
• Evaluate the overall presentation, structure, and content of the standalone financial statements, includingthe disclosures, and whether the standalone financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or inaggregate, makes it probable that economic decisions of a reasonably knowledgeable user of the standalonefinancial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters thatmay 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 wereof most significance in the audit of the standalone financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
1. As required under 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 knowledgeand belief were necessary for the purposes of our audit of the accompanying standalone financialstatements.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as itappears from our examination of those books.
c) The standalone Balance Sheet, the standalone Statement ofProfit and Loss including Other ComprehensiveIncome, standalone Statement of Changes in Equity and the standalone Statement of Cash Flows dealtwith by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified undersection 133 of the Act read with relevant rules issued thereunder.
e) On the basis of the written representations received from the directors as on March 31, 2025 taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from beingappointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting with reference tostandalone financial statements of the Company and the operating effectiveness of such controls, referto our separate report in “Annexure B”. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financial reporting withreference to standalone financial statements of the Company.
g) With respect to the other matters to be included in the Auditor's Report in accordance with therequirements of Section 197 (16) of the Act as amended, in our opinion and to the best of our informationand according to the explanations given to us, the remuneration paid by the Company to its directorsduring 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 ofthe Companies (Audit and Auditors) Rules, 2014, as amended by the Companies (Audit and Auditors)Second Amendment Rules, 2021, in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in Note No. 39of the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which therewere any material foreseeable losses.
iii. There were no amounts that are required to be transferred to the Investor Education and ProtectionFund by the Company during the year ended March 31, 2025.
iv. a) The management has represented that, to the best of its knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium orany other sources or kind of funds) by the Company to or in any other person(s) or entity(ies),including foreign entities ('the intermediaries'), with the understanding, whether recorded inwriting or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest inother 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 UltimateBeneficiaries;
b) The management has represented, that, to the best of its knowledge and belief that nofunds (which are material either individually or in the aggregate) have been received by theCompany from any person(s) or entity(ies), including foreign entities ('Funding Parties') withthe understanding, whether recorded in writing or otherwise, that the Company shall, whetherdirectly or indirectly, lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the Funding Party ('Ultimate Beneficiaries') or provide any guarantee, securityor the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed as considered reasonable and appropriate in thecircumstances, nothing has come to our attention that causes us to believe that the managementrepresentations under sub-clauses (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,contain any material misstatement.
v. The Company has not declared or paid any dividend during the year ended March 31, 2025.
vi. Based on our examination, which included test checks, the Company has used accounting softwarefor maintaining its books of accounts which has a feature of recording audit trail (edit log) facility andthe 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 featurebeing tampered with. Furthermore, the audit trail has been preserved by the Company as per thestatutory requirements for record retention.
2. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Governmentof India in terms of Section 143(11) of the Act, we give in the “Annexure A”, a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
Chartered AccountantsFirm Registration No. 301072E
Partner
Place: Kolkata (Membership No. 056359)
Date: 20th May, 2025 UDIN: 25056359BMIWFW2532