Super Stores Limited (SSL) is a public listed (in top 1000) company and is one of India's largest retailers (by revenue and store count), operating…

Super Stores Limited (SSL) is a public listed (in top 1000) company and is one of India's largest retailers (by revenue and store count), operating a chain of hypermarkets, discount department stores, and grocery stores. Founded in 2001 by Mr. G, SSL has grown into a national powerhouse with hundreds of stores in multiple locations. SSL is having subsidiaries also as part of the group with each subsidiary being managed by separate directors (no common director). Out of all subsidiaries, RLV is considered as a material subsidiary. SSL has been successful due to its ability to offer low prices achieved through: Efficient Supply Chain Management. Economies of Scale. Minimal Operating Costs. With a strong presence in both physical and online retail, SSL has revolutionized India's shopping experience.SSL also imports premium chocolates (Ziva) from Europe by paying applicable Indirect taxes and sell them in the domestic market.However, with the emergence of e-commerce company like "FAST DELIVERY" that specializes in delivering groceries and daily essentials to customers' doorsteps, often within 10 minutes, SSL's turnover is moving southwards as compared to previous years. (Customers can order from a selection of over 7,000 products, including groceries, fresh fruits and vegetables, bakery items, meats, personal care products, and more, through the FAST DELIVERY mobile app or website).The impact of increasing competition was also reflected in the sales performance of SSL's major retail categories. During the year, SSL had budgeted sales of 80,000 units of Grocery Products and 20,000 units of Premium Products, whereas the actual sales were 75,000 units and 15,000 units, respectively. The standard selling prices per unit of Grocery Products and Premium Products were ₹ 100 and ₹ 200, respectively, while the corresponding standard variable costs were ₹ 70 and ₹ 120 per unit.To combat this competition, SSL decided to acquire a private unlisted entity "DAILY NEEDS" which is into the same business as FAST DELIVERY but not at such a large scale operation. SSL identified DAILY NEEDS as a potential target based on market research. A preliminary assessment was conducted to evaluate its financial health, technological assets and strategic fitness. However, as a private unlisted entity, determining its valuation posed challenges. Accordingly, a financial consultant was hired for calculating the business value of DAILY NEEDS.As soon as the news got out in the market, its effect on share price was showing positive move and those gains stabilized indicating that market took it positively. However, data analysis showed that one Investment entity "APJ Limited" has bought shares of SSL on a consistent basis. This has been done through two different modes, open market purchase and block deal. Total equity bought by it is to the tune of 11%. Management got feared of aggressive buyout and started getting deep in the reason of buying. To its surprise, the investment entity was a subsidiary of its competitor and when this fact came to light, management called the meeting of various stakeholders. Financial consultants were also invited to give suggestions on how to defend against this type of attack by the competitors.SSL's Board of Directors consists of the following directors:Ravi, Rahul and Rohit: Graduated in Science.Vijay, Raman and Mohit Graduated in Commerce.(Rahul, Raman and Mohit being Independent Directors).While preparing standalone financial statements for the year ended 31-03-2025, SSL disclosed the following ratios: 31-03-2024 31-03-2025 Return on Investment 2.75% 20.61% Inventory Turnover Ratio 8.01 6.10 Return on Capital Employed 15.92% 12.45% Return on Investment 1.00% 1.75% Besides this, no other disclosures were made in the notes to financial statements.Also, these ratios were not disclosed in the Consolidated Financial Statements.Further, in relation to inventory, SSL has disclosed the following supplementary information in the financial statements for the year ended 31-03-2025: (i) Breakdown of Inventory Categories Additional details on raw-materials, work-in-progress and finished goods beyond what is required in the notes. (ii) Aging of Inventory - Categorization of inventory based on age to highlight obsolescence risks. (iii) Geographical Segmentation Breakdown of inventory held in different locations or regions. (iv) Obsolete and Slow-Moving Inventory - Additional disclosures on provisions for obsolete inventory and write-offs. (v) Inventory Purchase Commitments Information on significant future purchase commitments that might impact inventory levels. (vi) Impact of Inflation or Price Changes Analysis of how inflation, foreign exchange fluctuations, or commodity price changes affect inventory valuation. (vii) Seasonality Effects Explanation of seasonal fluctuations in inventory levels and their impact on financial performance. Stock includes sizeable quantity and amount of Ziva also. SSL got order from M/s. TFC Limited (a unit situated in SEZ in Mohali, Punjab) for supply on the occasion of valentine day. Chocolates were delivered on 13-02-2026 with invoice value of ₹ 2.5 crore. The Accounts department of the company intimated that SSL is eligible for refund of GST paid at the time of import (₹ 38 lakh) and standing in the books as ITC as supply to SEZ is treated as an exempt supply. They further intimated that within 10 days of filing the claim, SSL will get refund of ₹ 28.5 lakh and balance after the documents get verified by the department.Ravi, being the Promoter Director has seen the growth of the company since beginning and want his next generation to take the company forward with same zeal and enthusiasm. Ravi's son Rajeev will be inducted after he gets married which is scheduled on 03-02-2026 and lavish arrangements have been made for the ceremony in which top businessman, state level leaders and Bollywood celebrities have been invited. Ravi has delegated the work of arrangements to one of his friends "Rustom" who is taking care of every small thing and arrangements and is aware of the estimated cost of the ceremony. Market news is that this will be one of the high end marriage function which everybody dreams of. One of the Inspectors of the Income Tax Department who is in charge of the Range in which ITR of Ravi falls, is aware of the developments and thinks that the real time information collected today will help him at the time of making assessment. Evidence collected today will be matched with the ITR and any substantial differences can be identified. The Inspector visited the office of Ravi on 31-01-2026 and in his absence, asked Rustom about the details of the function. Rustom showed him the documents. The Inspector took extracts of the same and went. At the time of assessment, the Inspector used the evidences collected and issued a notice for enquiry to Ravi. Ravi's son, Rajeev is an engineer by profession and runs his own consulting firm RR Enterprises in UAE.RSZ (P) Ltd. which is a wholly owned subsidiary of SSL obtains technical and consultancy services from RR Enterprises.As an auditor, how will you deal with the supplementary information made in relation to inventory in the financial statements for the year ended 31-03-2025?