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B A G Films & Media Ltd.

BSE: 532507 Sector: Media
NSE: BAGFILMS ISIN Code: INE116D01028
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VOLUME 2063
52-Week high 10.79
52-Week low 2.31
P/E 284.00
Mkt Cap.(Rs cr) 112
Buy Price 5.67
Buy Qty 5000.00
Sell Price 5.68
Sell Qty 687.00
OPEN 5.68
CLOSE 5.25
VOLUME 2063
52-Week high 10.79
52-Week low 2.31
P/E 284.00
Mkt Cap.(Rs cr) 112
Buy Price 5.67
Buy Qty 5000.00
Sell Price 5.68
Sell Qty 687.00

B A G Films & Media Ltd. (BAGFILMS) - Auditors Report

Company auditors report

To

The Members of

B.A.G. Films and Media Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of B.A.G. Films andMedia Limited (the Company) which comprise the balance sheet as at 31 March 2021 thestatement of profit and loss (including other comprehensive income) the statement of cashflow and the statement of changes in equity for the year then ended and notes to be thestandalone financial statements including a summary of significant accounting policiesand other explanatory information.

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 Companies Act 2013 ( "the Act") in the manner so required and give atrue and fair view in conformity with Indian Accounting Standards prescribed under section133 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 ofaffairs of the Company as at 31 March 2021 and profit and other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

• We conducted our audit in accordance with the Standards on Auditing (SA)specified under Section 143 (10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Revenue Recognition- Rebates and Discounts The Key Audit Matter

Revenue is measured net of any trade discounts and volume rebates to customers("discounts and rebates"). Material estimation by the Company is involved inrecognition and measurement of rebates and discounts. This includes establishing anaccrual at year end particularly in arrangements with varying terms which are based onannual contracts or shorter-term arrangements. In addition the value and timing ofpromotions for products varies from period to period and the activity can span beyond theyear end.

We identified the evaluation of accrual for rebates and discounts as a key auditmatter.

How the matter was addressed in our audit

Our audit procedures included:

• Evaluating the design implementation and operating effectiveness of Company'sgeneral IT controls key manual and application controls over the Company's IT systems.They cover control over computation of discounts and rebates and rebate and discountaccruals;

• Inspecting on a sample basis key customer contracts. Based on the terms andconditions relating to rebates and discounts we assessed the Company's revenuerecognition policies with reference to the requirements of the applicable accountingstandards;

• Performing substantive testing by selecting samples of rebate and discounttransactions recorded during the year and matching the parameters used in the computationwith the relevant source documents;

• Understanding the process followed by the Company to determine the amount ofaccrual of rebates and discounts. Testing samples of rebate accruals and comparing tounderlying documentation;

• Testing actualisation of estimated accruals on a sample basis;

• Examining historical rebate accrual together with our understanding of currentyear developments to form an expectation of the rebate accrual at period end. We comparedthis expectation against the actual rebate accrual completing further inquiries andobtaining underlying documentation on a sample basis as appropriate. Further we alsoperformed retrospective review to evaluate the precision with which management makesestimates.

• Critically assessing manual journal entries posted to revenue on a samplebasis to identify unusual items and examining the underlying documentation.

• Checking completeness and accuracy of the data used by the Company for accrualof rebates and discounts.

• Testing a selection of rebate accruals recorded after 31 March 2021 andassessing whether the accrual is recorded in the correct period

• Testing a selection of payments made after 31 March 2021 and where relevantcomparing the payment to the related rebate accrual

Provisions and Contingent Liabilities Relating to Taxation Litigations and Claims

The Key Audit Matter

The provisions and contingent liabilities relate to ongoing litigations and claims withvarious authorities and third parties. These relate to direct tax indirect tax transferpricing arrangements claims general legal proceedings environmental issues and othereventualities arising in the regular course of business.

The computation of a provision or contingent liability requires significant judgementby the Company because of the inherent complexity in estimating future costs. The amountrecognised as a provision is the best estimate of the expenditure. The provisions andcontingent liabilities are subject to changes in the outcomes of litigations and claimsand the positions taken by the Company. It involves significant judgement and estimationto determine the likelihood and timing of the cash outflows and interpretations of thelegal aspects tax legislations and judgements previously made by authorities.

How the matter was addressed in our audit

Our audit procedures included:

• Evaluating the design implementation and operating effectiveness of keyinternal controls around the recognition and measurement of provisions and re-assessmentof development of contingent liabilities;

• Involving our tax professionals with specialised skills and knowledge to assistin the assessment of the value of significant provisions and contingent liabilitiesrelating to taxation matter on sample basis in light of the nature of the exposuresapplicable regulations and related correspondence with the authorities;

• Inquiring the status in respect of significant provisions and contingentliabilities with the Company's internal tax and legal team. We challenged the assumptionsand critical judgements made by the Company which impacted the computation of theprovisions and inspected the computation. We assessed the assumptions used and estimatesof outcome and financial effect. We considered judgement of the Company supplemented byexperience of similar decisions previously made by the authorities and in some casesrelevant opinions given by the Company's advisors;

• Evaluating judgements made by the Company by comparing the estimates of prioryear to the actual outcome;

• Assessing the Company's disclosures in the financial statements in respect ofprovisions and contingent liabilities;

• Testing data used to develop the estimate for completeness and accuracy.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the Standalone Financial Statements and Auditors'Report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's and Borad of Directors' Responsibility for the Standalone FinancialStatements

The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit / loss(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. As required by section 143 (3) of the Act we report to the extent applicablethat:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 standalone balance sheet the statement of profit and loss (including othercomprehensive income) the standalone statement of changes in equity and the standalonestatement of cash flows dealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on 31March 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of section164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"

3. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

1. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements.

2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

3. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

4. The disclosures in the standalone financial statements regarding holdings as well asdealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2021.

4. With respect to the matter to be included in the Auditors' Report under section197(16) of the Act:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

For Kumar Khare & Co.
Chartered Accountants
ICAI Firm Registration Number 006740C
Alok Khare
Partner
Place : Noida Membership Number 075236
Dated : June 29 2021 UDIN: 21075236AAAAN9273

Annexure A

To the Independent Auditors' Report on the standalone financial statements of the B.A.GFilms and Media Limited for the year ended 31 March 2021

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

i. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of fixed assets whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. In accordance with this programme certain fixed assets were physicallyverified by the management during the year and we are informed that no materialdiscrepancies were noticed on such verification.

(c) The Company does not have any immovable properties taken on lease that aredisclosed as fixed asset in the standalone financial statements.

ii. The inventory has been physically verified at reasonable intervals by themanagement during the year. The Company has maintained proper records of inventory. Nodifference were noticed on verification between the physical stock and the book records.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct. Accordingly the provisions of clause 3(iii)(a) (b)and (c) of the Order are notapplicable to the Company and hence not commented upon.

iv. The Company has not granted any loans or provided any guarantees or security to theparties covered under section 185 of the Act. The Company has complied with the provisionsof section 186 of the Act in respect of investments made or loans or guarantee or securityprovided to the parties covered under section 186.

v. According to information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of the directives issued by the ReserveBank of India provisions of section 73 to 76 of the Act any other relevant provisions ofthe Act and the relevant rules framed thereunder. Accordingly paragraph 3 (v) of theOrder is not applicable to the Company.

vi. To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under clause 148(1) of the Act for the businessactivities carried out by the Company. Thus the reporting under clause 3(vi) of the orderis not applicable to 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 regular in depositing theundisputed statutory dues including provident fund employees state insurance income taxgoods and service tax duty of customs cess professional tax and other materialstatutory dues as applicable with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax goods andservice tax duty of customs cess professional tax and other material statutory dueswere in arrears as at 31 March 2021 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax goods and service tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute.

viii. In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing dues to banksand financial institutions. The Company did not have any outstanding loan or borrowingdues in respect of a government or dues to debenture holders.

ix. In our opinion and according to the information and explanations given by themanagement and audit procedures performed by us the Company has utilized the moniesraised by way of term loans for the purposes for which they were raised. The Company hasnot raised any money way of initial public offer and further public offer.

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. According to the information and explanations given to us and based on ourexamination of the records of the Company the remuneration paid by the Company to itsdirectors during the current year is in accordance with the provisions of Section 197 ofthe Act. The remuneration paid to any director is not in excess of the limit laid downunder Section 197 of the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable Indian Accounting Standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected to its directors. Accordingly paragraph3 (xv) of the Order is not applicable to the Company.

xvi. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For Kumar Khare & Co.
Chartered Accountants
ICAI Firm Registration Number 006740C
Alok Khare
Partner
Place : Noida Membership Number 075236
Dated : June 29 2021 UDIN: 21075236AAAAN9273

Annexure B

To the Independent Auditors' report on the standalone financial statements of B.A.GFilms and Media Limited for the year ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under section 143(3)(i) of the Companies Act 2013

(Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the B.A.G Films and Media Limited of even date)

Opinion

We have audited the internal financial controls over financial reporting of the Companyas of March 31 2021 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequate internalfinancial control system with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2021 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal controls stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance note") issued by the Instituteof Chartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

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 Standards on Auditing issued by the Institute of Chartered Accountants of India(ICAI) and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of Internal Financial Controls with reference to financialstatements. Those Standards and the Guidance Note require that we comply with the ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error.

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 withreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For Kumar Khare & Co.
Chartered Accountants
ICAI Firm Registration Number 006740C
Alok Khare
Partner
Place : Noida Membership Number 075236
Dated : June 29 2021 UDIN: 21075236AAAAN9273

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