To the Members of Globus Spirits Limited
Report on the Audit of the Standalone Financial Statements
Opinion
1. We have audited the accompanying standalone financial statements of Globus Spirits 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 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. I n 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 March 31, 2025, and its profit (including other comprehensive
income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current 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.
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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 matter
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Revenue recognition
Refer Note 2(t) in the material accounting policy and other explanatory information relating to revenue recognition and Note 24 for the details of revenue recognized by the Company during the year.
The Company derives its revenue from sale of liquor products to a wide range of customers through a network of private distributors (open market), part corporation market and full corporation market. Such revenue is recognized in accordance with the principles of Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115’) which requires management to make certain key judgements, such as, identification of performance obligations in contracts with customers, determination of transaction price for the contract including variable consideration, and assessment of satisfaction of the performance obligations under each contract represented by the transfer of control of the products sold to the customers.
Owing to the multiplicity of the Company's products, volume of sales transactions, size of distribution network, nature of customers and varied terms of contracts with different customers, revenue recognition is determined to be an area involving significant risk in line with the requirements of the Standards on Auditing.
Due to the extent of industry knowledge and skills required to design and execute audit procedures to address the risks of material misstatements in revenue recognition, significance of the amounts and judgments involved, revenue recognition is considered to be a key audit matter for the current year audit.
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Our audit procedures with respect to revenue recognition included, but
were not limited, to the following:
a. Understood the process for revenue recognition and evaluated the appropriateness of the accounting policy adopted by the management on revenue recognition including determination of transaction price and satisfaction of performance obligations, in accordance with Ind AS 115;
b. Evaluated the design and implementation, and tested the operating effectiveness of Company's key internal controls around revenue recognition including relating to determination of variable consideration and satisfaction of performance obligations;
c. On a sample basis, tested revenue transactions recorded during the year, and transactions recorded before and after year end basis inspection of supporting documents such as customer contracts, purchase orders, price lists, invoices, proof of dispatch and delivery including regulatory documents used for movement of liquor as per applicable regulations, in order to ensure revenue is recorded with the correct amount and in the correct period;
d. Performed substantive testing by selecting a sample of discounts, rebate and other pay-out transactions with distributors recorded during the year as well as period end accrual basis the promotion schemes offered by the Company;
e. Performed substantive analytical procedures for reasonableness of revenue recorded during the year such as variance analysis, trend analysis on revenue to identify any unusual trends;
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f.
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Tested unusual non-standard journal entries impacting revenue, selected based on risk-based criteria;
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g.
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Assessed the appropriateness and adequacy of the disclosures made in the accompanying standalone financial statements in respect of revenue recognition in accordance with financial reporting framework.
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Evaluation of provisions and contingencies with respect to
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Our audit procedures in relation to the assessment of litigations and
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direct and indirect taxes matters
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provisions included, but were not limited, to the following:
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Refer Note 2(v) in the material accounting policy and other
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a.
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Obtained an understanding of the Company's process for
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explanatory information and Note 35(a) and Note 46 for disclosures
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evaluating the outcome of litigations, including assessment of
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of the contingent liabilities and provisions relating to litigations as at
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accounting treatment as per Ind AS 37;
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March 31,2025.
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b.
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Evaluated the design and implementation, and tested the operating
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The Company is exposed to multiple litigations from statutory
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effectiveness of key controls implemented by the management
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authorities including matter related to direct tax demands (including
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relating to aforesaid process;
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interest thereon) relating to past assessment years, specifically those
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c.
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Assessed the appropriateness of accounting policy for recognising
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pursuant to search and seizure proceedings conducted by the
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provision and disclosure of contingent liabilities, as applicable, with
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Income-tax authorities under Section 132 of the Income-tax Act, 1961 in the previous year and ongoing indirect tax matters (Goods
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d.
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the requirements of Ind AS 37;
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and Services Tax) which is pending adjudication. The Company has
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Obtained and reviewed management's evaluation on the expected
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paid certain amounts under protest and has also filed appeals with
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outcome of the litigations including legal advice obtained by
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appellate authorities against these demands.
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management from external direct tax and indirect tax experts, and correspondences with the concerned authorities;
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Significant judgement is applied by the management in application and interpretation of tax laws and judicial pronouncements, and
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e.
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Assessed the objectivity and competence of the management's
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evaluating the likely outcome / or timing of the cash outflows, which
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external tax experts and independent professional firm engaged by
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is supported by opinion obtained from external tax counsels to
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the management;
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determine whether the related obligation, if any, requires recognition
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f.
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Involved auditor's tax experts to understand the current status of the
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of a provision or a disclosure as a contingent liability in accordance
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matters, review the legal/tax advice obtained by the management
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with principles enunciated in Ind AS 37, Provisions, Contingent
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and assist in evaluating the tax position taken by management by
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Liabilities and Contingent Assets (‘Ind AS 37').
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applying and interpreting tax laws, relevant judicial pronouncements
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The management also hired an independent professional firm to
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and available precedents to challenge management's assumptions
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assess the financial reporting impact of the matters alleged in the
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in estimating the possible outcome of the ongoing proceedings;
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demand notice raised under search and seizure proceedings
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g.
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Involved auditor's experts to review the adequacy of work performed
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conducted by the income tax authorities. Such matter, as fully
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and conclusions reached by the independent professional firm
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described in Note 46, is also considered to be fundamental to the
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appointed by the management in relation to the assessment of
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understanding of the users of the accompanying standalone financial
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the financial reporting impact of the matters alleged in the demand
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statements.
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notice raised under search and seizure proceedings conducted by
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Considering the significance of amounts, high estimation uncertainty
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the income tax authorities;
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and use of significant management judgement in determining the
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h.
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Assessed the appropriateness and adequacy of the disclosures
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likely outcome of the litigations as explained above, this matter has
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made in the standalone financial statements in accordance with
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been considered to be a key audit matter for the current year audit.
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the Indian accounting standards.
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Implementation of a new Information Technology (‘IT’)
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Our audit procedures with respect to implementation of new IT system
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system for financial reporting and related migration of data
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included, but were not limited to, the following:
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The Company has implemented a new IT system, SAP (new IT
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a.
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Obtained the understanding of the process followed and controls
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system') with effect from April 1,2024, for supporting its operations
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implemented by the Company for implementing the new IT system
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and financial reporting, which required an extensive exercise of
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and for migration of standing data from erstwhile IT systems into
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data migration from the erstwhile IT system RAMCO (‘erstwhile IT
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the new IT system. This includes understanding the overall project
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system').
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implementation plan, project roles and responsibilities, determination
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Such significant IT system change increases the risks to the internal
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of new system requirements, including customisations made to
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financial controls environment of the Company. These changes
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standard IT system, and the plan for go-live;
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create a financial reporting risk as processes and controls that have
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b.
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Evaluated the design and implementation, and tested the operating
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been established over a number of years are migrated and updated
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effectiveness of key controls over the new system implementation
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into a new IT environment. The significant data migration required
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and data migration, which includes controls over change
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for the above exercise also leads to a risk of error/fraud.
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management and system development;
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Considering the significance of the activity and its pervasive impact
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c.
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Reviewed the reconciliations prepared by the management relating
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on the standalone financial statements, this matter has been
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to the data migration and tested movement of a sample of general/
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determined as a key audit matter for the current year audit.
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sub-ledger accounts and balances, including standing data masters, from erstwhile IT systems to the new IT system;
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d.
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Validated whether appropriate approvals and go-live sign-offs were taken from the respective authorised users; and
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e.
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Evaluated the design and tested the operating effectiveness of the IT General Controls (‘ITGC') and business process controls postmigration of the new IT system, and evaluated the impact of results in planning our audit procedures.
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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.
I n connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
7. The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. I n preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management;
• Conclude on the appropriateness of Board of
Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory
Requirements
15. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order’) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, 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 A, 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) I n 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 March 31, 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 March 31, 2025 and the operating effectiveness of such controls, refer to our separate
report in ‘Annexure B’ 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 35(a) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at March 31, 2025;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at March 31, 2025;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund 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, as disclosed in note 48(iv) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 48(v) to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties’), with the
understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under subclauses (a) and (b) above contain any material misstatement.
v. The final dividend paid by the Company during the year ended March 31, 2025 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 43(B) to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended March 31, 2025 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As stated in Note 49 to the standalone financial statements and based on our examination which included test checks, the Company, in respect of financial year commencing on or after April 1,2024, has used an accounting software for maintaining its books of account which has a feature of recording audit trail facility and the same has been operated throughout the year for all relevant transactions recorded in the software at the application level. In absence of an ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with SAE 3402, Assurance Reports on Controls at a Service Organization), we are unable to comment on whether audit trail feature of the said software
was enabled and operated throughout the year for all relevant transactions or whether there were any instances of audit trail feature being tampered with at the database level. The audit trail has been preserved at the application level by the Company as per the statutory requirements for record retention. Further, due to absence of the Type 2 report, we are unable to comment on preservation of audit trail at the database level.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm’s Registration No.: 001076N/N500013
Abhishek Lakhotia
Partner
Membership No.: 502667
UDIN: 25502667BMUJKN1906
Place: New Delhi
Date: May 19, 2025
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