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ZOMATO LTD.

02 February 2023 | 12:00

Industry >> E-Commerce - Electronics/Food/Others

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ISIN No INE758T01015 BSE Code / NSE Code 543320 / ZOMATO Book Value (Rs.) 19.40 Face Value 1.00
Bookclosure 52Week High 100 EPS 0.00 P/E 0.00
Market Cap. 40629.17 Cr. 52Week Low 41 P/BV / Div Yield (%) 2.45 / 0.00 Market Lot 1.00
Security Type Other

AUDITOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2022-03 

To the Members of Zomato Limited (formerly known as Zomato Private Limited) Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone financial statements of Zomato Limited (formerly known as "Zomato Private Limited") ("the Company"), which comprise the Balance Sheet as at March 31, 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year ended, and a summary of significant accounting policies and other explanatory information (herein referred to as "the Standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of report of the other auditor on financial information of Foodie Bay Employees ESOP Trust ("trust") referred to in the Other Matters section below, 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 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 at March 31, 2022, and its loss, total comprehensive loss, 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 specified under section 143(10) of the Act (SAs). 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 and the audit evidence obtained by the other auditor in terms of their reports in other Matters Section below is sufficient and appropriate to provide a basis for our audit opinion on the consolidated 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 of the current year. 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.

Sr.

No.

Key Audit Matter

Auditor's Response

1

Impairment of investment in a subsidiary

(Refer note 41 of the Standalone financial statement)

Investments in subsidiaries are accounted for at cost less impairment in the Company's Standalone financial statements;

Principal audit procedures performed:

• Evaluated the design, implementation and tested the operating effectiveness of relevant internal controls relating to impairment assessment of investment in subsidiaries.

• Evaluated the reasonableness of the business assumptions relating to future revenue growth;

Sr.

No.

Key Audit Matter

Auditor's Response

If impairment indicators exist, the

> Evaluated the objectivity and independence of the

recoverable amounts of the investments

specialist engaged by the Company and reviewed

in subsidiaries are estimated in order to

the valuation report issued by such specialist;

determine the extent of the impairment loss, if any. Any such impairment loss is recognised in the Statement of Profit and Loss;

> We have used our valuation specialists to assess overall reasonableness of the assumptions used particularly those relating to the weighted

During the current year, based on identified

average cost of capital and terminal growth rate.

impairment indicators, management has carried out impairment assessment by comparing the carrying value of these investments to their recoverable amount

> Performed sensitivity analysis on the key assumptions such as weighted average cost of capital and terminal growth rate;

to determine whether an impairment was required to be recognized.

> Assessed the adequacy of the disclosures made in the financial statements.

We considered the assumptions relating to future revenue growth and the valuation assumptions, specifically, the assumptions relating to weighted average cost of capital and terminal growth rate, used in estimation of recoverable value of the investment in Zomato Hyperpure Private Limited (with carrying value of INR 3,609 million as on March 31, 2022) as a key audit matter due to the significance of the investment amount and the significant estimates and judgement involved in estimation of these assumptions.

2.

Fair valuation of investment in other entities 1

Principal audit procedures performed:

(Refer note 33 (b) of the Standalone financial

> Evaluated the design, implementation and tested

statement)

operating effectiveness of relevant internal

The Company has made investments in Blink Commerce Private Limited (formerly known

controls relating to determination of the fair value of investment in the said other entities.

as Grofers India Private Limited) and its fellow

> Evaluated the reasonableness of the business

subsidiary Hands on Trades Private Limited

assumptions relating to future revenue growth;

where the aggregate carrying value of these investments as on March 31, 2022 is INR 7,410 million. These investments are measured at Fair Value through Other Comprehensive

> Evaluated the objectivity and independence of the specialist engaged by the Company and reviewed the valuation report issued by such specialist;

Income ('FVTOCI') as at the year-end.

> We have used our valuation specialists to assess

We considered the assumptions relating to future revenue growth and the valuation assumptions, specifically the assumptions

overall reasonableness of the assumptions used particularly those relating to the weighted average cost of capital and terminal growth rate.

relating to weighted average cost of capital

> Performed sensitivity analysis on the key

and terminal growth rate, used in the fair

assumptions such as weighted average cost of

valuation of these investments as a key

capital and terminal growth rate;

audit matter due to the significance of the investment amount and the significant estimates and judgement involved in estimation of fair value.

> Assessed the adequacy of the disclosures made in the financial statements.

Sr.

No.

Key Audit Matter

Auditor's Response

3.

Revenue Recognition

Principal audit procedures performed:

(Refer note 2 (ix) 22 and 28 of the financial

• We obtained an understanding, evaluated the

statement)

design and tested the operating effectiveness of

The Company provides an e-commerce

(i) the general IT controls, automated controls and

control over system generated reports relevant

platform that enables merchants to sell their

for revenue recognition by involving our IT

food items to users through the platform.

specialist; (ii) controls over recording of revenue

Judgement is required to assess

relating to food delivery business; (iii) control

classification and presentation of the

over determination of commission rate and (iv)

discounts offered to the users of its platform.

control over reconciliations performed between the commission revenue recorded and amount

Additionally, the Company revenue process is largely automated and relies significantly

received from payment gateway;

on its IT systems.

• We have evaluated the appropriateness of the accounting policies followed by the Company

We considered the Company's determination

relating to the presentation of the discounts

of presentation of the discounts offered to the users of its platform as a key audit matter

offered to the users of its platform;

because of the judgement involved in this

• We tested inter se reconciliations between

matter.

reports generated from relevant IT systems with general ledger;

Additionally, accuracy of revenues relating to food delivery business as a key audit matter

• We tested, on a sample basis, underlying

because of the significance of volumes of

contracts, identifying the key terms and attributes from the contracts and checking them against

data processed by the IT systems.

the underlying data from the system used in the transaction processes and then recalculating the revenue amount.

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 Board's Report but does not include the 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.

Management's Responsibility 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 Ind AS 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 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 statement 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 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are 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 scepticism 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)0) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system 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.

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company and the trust to express an opinion on the Standalone financial statements. We

Our opinion on the Standalone financial statement is

not modified in respect of above matter with respect

to our reliance on the reports of the other auditors.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditor on the separate financial information of the trust referred to in the Other Matters section above, 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 Cash Flow Statement 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, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 over financial reporting 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 over financial reporting.

are responsible for the direction, supervision and performance of the audit of such entities included in the Standalone financial statements of which we are the independent auditors. For the other entities included in the Standalone financial statements, which have been audited by other auditor, such other auditor remains responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

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 control 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.

Other Matter

We did not audit the financial information of one trust, whose financial information reflects total assets of INR 82 million as at March 31, 2022, total revenues of INR Nil million, net cash inflow amounting to INR 81 million for the year ended March 31, 2022, as considered in the Standalone financial statement. This financial information has been audited by other auditor, whose reports have been furnished to us by the Management and our conclusion on Standalone financial statements, in so far as it relates to the amounts and disclosures included respect of trust is based solely on the audit report of the other auditor.

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.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has no amount required to be transferred, to the Investor Education and Protection Fund by the Company during the year March 31, 2022.

iv. (a) The Management has represented, to

the best of their knowledge and belief, as disclosed in the notes to the accounts, no funds (which are material either individually or in the aggregate) 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 Parent Company or any of such subsidiaries ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, to the best of their knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) have been received by Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Parent Company or any of such subsidiaries 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 that has been considered reasonable and appropriate in the circumstances, nothing has come to our or other auditor's notice that has caused us or the other auditors 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 company has not declared or paid any dividend during the year and has not proposed final dividend for the year

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. 015125N)

Sd/-

Vikas Khurana

(Partner)

Place: Gurugram (Membership No. 503760)

Date: May 23, 2022 UDIN: 22503760AJKHGH3111