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Saregama India Ltd.

BSE: 532163 Sector: Media
NSE: SAREGAMA ISIN Code: INE979A01017
BSE LIVE 15:47 | 18 Oct 585.10 -12.95
(-2.17%)
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597.00

HIGH

603.00

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NSE 15:47 | 18 Oct 584.75 -13.95
(-2.33%)
OPEN

597.50

HIGH

603.50

LOW

581.40

OPEN 597.00
PREVIOUS CLOSE 598.05
VOLUME 33169
52-Week high 616.00
52-Week low 181.90
P/E 110.19
Mkt Cap.(Rs cr) 1,019
Buy Price 585.10
Buy Qty 48.00
Sell Price 0.00
Sell Qty 0.00
OPEN 597.00
CLOSE 598.05
VOLUME 33169
52-Week high 616.00
52-Week low 181.90
P/E 110.19
Mkt Cap.(Rs cr) 1,019
Buy Price 585.10
Buy Qty 48.00
Sell Price 0.00
Sell Qty 0.00

Saregama India Ltd. (SAREGAMA) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

SAREGAMA INDIA LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Saregama IndiaLimited ("the Company") which comprise the Balance Sheet as at March 312017the Statement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements to give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

9. (a) We draw your attention to Note 36.1 to the financial statements relating to :

(i) remuneration paid to the Managing Director of the Company for the financial year2015-16 in excess of the limits specified in the Section 197 read with Schedule V of theAct. The Company has subsequently made an application and received Order dated October 52016 from the Central Government for an amount of ' 179.94 Lakhs as against the amountpaid/provided of ' 489.92 Lakhs and excess remuneration of '179.10 Lakhs and '130.88 Lakhshave been disclosed as receivable from the Managing Director and written back respectivelyin the financial statements for the financial year 2016-17.

(ii) remuneration paid/provided for the financial year 2014-15 in excess of the limitset out in the Order dated October 5 2016 from the Central Government by ' 78.98 Lakhs.According to the Board of Directors of the Company the aforesaid Order would not beapplicable for the financial year 2014-15 as the total remuneration was within theprovisions of the Act for which the Company has sought clarification from the CentralGovernment and the response to which is awaited.

Our opinion is not qualified in respect of above matters.

(b) We draw your attention to Note 36.2 to the financial statements regardingremuneration paid /payable to Managing Director aggregating ' 332.88 Lakhs for the yearended March 31 2017 in excess of the limits specified in the Order dated October 5 2016issued by the Central Government.

The Company has made application to the Central Government seeking itsclarification/approval on the application of the Notification dated September 12 2016issued by the Ministry of Corporate Affairs in place of the aforesaid Order and theresponse to which is awaited.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by ‘the Companies (Auditor's Report) Order 2016' issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B a statement on thematters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors and takenon record by the Board of Directors none of the directors is disqualified as on March312017 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 financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its standalone financial statements - Refer Note 29 tothe financial statements;

ii. The Company did not have any derivative contracts as at March 31 2017. The Companyhas other long-term contracts as at March 31 2017 for which there were no materialforeseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2017.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note 15.1 to thefinancial statements.

For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Pinaki Chowdhury
Kolkata Partner
May 25 2017 Membership Number 057572

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Saregama India Limited on the standalone financial statements for the yearended March 31 2017 Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of SaregamaIndia Limited ("the Company") as of March 31 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Pinaki Chowdhury
Kolkata Partner
May 25 2017 Membership Number 057572

Annexure B to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Saregama India Limited on the standalone financial statements as of and for theyear ended March 31 2017.

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 8 on fixed assets tothe financial statements are held in the name of the Company.

ii. The physical verification of inventory (excluding stocks with third parties) havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by itas applicable.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of income tax sales tax value added tax and servicetax though there has been a slight delay in a few cases and is regular in depositingundisputed statutory dues including provident fund employees' state insurance duty ofcustoms duty of excise cess and other material statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service-tax and duty of customs which havenot been deposited on account of any dispute. The particulars of dues of income tax salestax duty of excise and value added tax as at March 31 2017 which have not been depositedon account of a dispute are as follows:

Name of the statute Nature of dues Amount (Rs. Lakhs) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 88.08 1996-97 to 1998-99 Customs Excise & Service Tax Appellate Tribunal
Central Sales Tax Act 1956 Sales Tax 25.34 2005- 06 2006- 07 2012-13 Joint Commissioner
Central Sales Tax Act 1956 Sales Tax 9.60 1990-91 2009-10 Deputy Commissioner
Central Sales Tax Act 1956 Sales Tax 178.52 1999-00 2006-07 Additional Commissioner
Central Sales Tax Act 1956 Sales Tax 2.43 1998-99 Assistant Commissioner of
2008-09 Commercial/sales taxes
West Bengal Sales Tax Act 1994 Sales Tax 97.78 1989-90 Deputy Commissioner
1994-95
2000-01
Maharashtra Value Added Tax 2002 Value Added Tax 196.82 2009-10 Deputy Commissioner
2011-12
Delhi Sales Tax Act 1975 Sales Tax 1.55 1991-92 Deputy Commissioner of Commercial Taxes
Tamil Nadu General Sales Tax Act 1959 Sales Tax 6.75 1986-87 to 1991-92 Tamil Nadu Taxation Special Tribunal
Andhra Pradesh General Sales Tax Act 1957 Sales Tax 3.28 2004-05 Deputy Commissioner
Kerala General Sales Tax Act 1963 Sales Tax 0.35 2002-03 Deputy Commissioner of Commercial Taxes
Uttar Pradesh Trade Tax Act 1948 Sales Tax 2.01 2005-06 Joint Commissioner
2006-07
Income Tax Act 1961 Income tax 889.22 2006-07 Commissioner of Income Tax
2007-08 (Appeals)
2008-09
2010-11
2012-13

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders asapplicable as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. Except for matter referred to in paragraph 9 (b) of the Audit Report themanagerial remuneration paid/provided by the Company is in accordance with the requisiteapprovals as mandated by the provisions of Section 197 read with Schedule V to the Act.Further as stated in the Note 36.2 to the Financial Statements the Company has madeapplication to the Central Government seeking its clarification/approval on amount ofmanagerial remuneration paid/provided for the financial year 2016-17 for ' 332.88 Lakhsin excess of limits specified in the Order dated October 5 2016 to the Company by theCentral Government; response to which is awaited.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Pinaki Chowdhury
Kolkata Partner
May 25 2017 Membership Number 057572