Auditors of Vishal Retail Ltd, a listed organised retail firm, have found some accounting discrepancies by the company when it conducted a limited review on unaudited financial results of the company for the quarter ended June 30.
They said the company understated deferred tax asset by Rs 17.26 crore and also had made no provision for shrinkage or obsolete and damaged goods.
When contacted Ambeek Khemka, group president, Vishal Retail Ltd said, “Considering the scale of our operations it is difficult to identify slow moving and obsolete stock. Thus, it is practically impossible to provide for such items. As and when we identify such items, they will be sold at a discount, which will have an impact on our gross margins.”
The company has 174 stores running across the country and incurred a loss after tax of Rs 39.86 crore for the quarter ended 30 June 2009. It has been actively relocating stores, closing down unviable ones, merging warehouses to cut costs.
While auditors pointed to published results not including consolidated figures for turnover, net profit and and earnings per as required under the listing agreement, the management said it will do so in the next quarter.