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Balaji Telefilms Ltd.

BSE: 532382 Sector: Media
NSE: BALAJITELE ISIN Code: INE794B01026
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OPEN 57.00
PREVIOUS CLOSE 56.85
VOLUME 9661
52-Week high 76.80
52-Week low 51.00
P/E 54.05
Mkt Cap.(Rs cr) 574
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 57.00
CLOSE 56.85
VOLUME 9661
52-Week high 76.80
52-Week low 51.00
P/E 54.05
Mkt Cap.(Rs cr) 574
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Balaji Telefilms Ltd. (BALAJITELE) - Auditors Report

Company auditors report

To the Members of Balaji Telefilms Limited

Report on the audit of the standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of Balaji TelefilmsLimited ("the Company") which comprise the Balance Sheet as at March 31 2020and the Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

2. 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 a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial StatementsSection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matter

4. We draw your attention to the following:

(a) Note 45 to the standalone financial statements which explains the uncertainties andthe management's assessment of the financial impact due to the restrictions and otherconditions related to the Covid-19 pandemic situation for which a definitive assessmentof the impact of the event in the subsequent period is dependent upon circumstances asthey evolve.

(b) Note 40 to the standalone financial statements regarding receivable amounting toRs. 1619 lacs disclosed under "other non-current assets" of the balance sheetas at March 31 2020 from one of its co-producer and a film director against whomarbitration proceedings are in progress for recovery.

Our opinion is not modified in respect of above matters.

Key audit matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of carrying value of investments in and loans to Subsidiaries
(Refer notes 5 15 and 33 to the Standalone Financial Statements) Our audit procedures included the following:
The carrying value of Company's investments in and loans to subsidiaries (Alt Digital Media Entertainment Limited Balaji Motion Pictures Limited and Marinating Films Private Limited) is Rs. 65112.20 lacs as at March 31 2020. • Understanding and evaluating the design and testing the operating effectiveness of the controls over valuation of investments and recoverability of loans;
The value of such investments and loans form a significant part of the total assets of the Company. Accumulated losses have eroded/partly eroded the net worth of the respective subsidiaries. This is an indication of potential impairment of carrying value these investments and loans. • Assessing the historical accuracy of the Management's forecasted business plans by comparing the forecasts used in the prior year with the actual performance in the current year;
• Comparing the forecasts with the latest approved budgets;
The Company assesses the carrying value of these investments and recoverability of loans by taking into account forecast business plans which are based on various assumptions including growth rate and discount factor. Management uses an independent external professional valuer to determine the fair value of these investments. • Evaluating the competence capabilities and objectivity of the independent professional valuer engaged by the Company;
• Together with auditor's valuation experts –
• assessing Management's forecasts to evaluate whether the forecasts are reasonable in comparison with the past performance and industry trends;
Based on this the Company assessed that there is no requirement of considering impairment provision in the carrying value of its investments in and loans to such subsidiaries at March 31 2020. We considered this as a Key Audit Matter due to uncertainties and significant judgement required by the Management in preparation of future cash flows based on the business plans and the underlying assumptions such as discount rate growth rate and valuation model. • testing appropriateness of the method and model used for determining the fair value of investments mathematical accuracy of the models' calculations evaluating reasonableness and challenging key assumptions used such as growth rate discount rate;
• evaluating the sensitivity analysis in consideration of potential impact of reasonably possible upside or downside changes in the key assumptions.
• Considered the results of the aforesaid procedures in evaluating the recoverability of loan given to a subsidiary.
Based on the above procedures performed the management's assessment of carrying value of investments in and loans to such subsidiaries was considered to be appropriate.

Other Information

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises of Board's Report Management Discussion & Analysis Report onCorporate Governance (but does not include the standalone financial statements and ourauditor's report thereon) which we obtained prior to the date of this auditor's reportand the Corporate Overview section of the annual report which is expected to be madeavailable to us after that date.

Our opinion on the standalone financial statements does not cover the other informationand we do not and will 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 identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed on the other information that we obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

When we read the Corporate Overview section of the annual report if we conclude thatthere is a material misstatement therein we are required to communicate the matter tothose charged with governance and take appropriate action as applicable under the relevantlaws and regulations.

Responsibilities of management and those charged with governance for the financialstatements

7. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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.

8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

9. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

10. 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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

12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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

14. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

15. 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 (including other comprehensiveincome) the Statement of Changes in Equity and Statement of Cash Flow dealt with by thisReport 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.

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of

Directors none of the directors is disqualified as on March 31 2020 from beingappointed as a director in terms of Section 164 (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 A".

(g) 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:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 32 to the standalone financialstatements.

ii. The Company has long-term contracts as at March 31 2020 for which there were nomaterial foreseeable losses. The Company did not have any derivative contracts as at March31 2020.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2020.

16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sachin Parekh
Partner
Place: Mumbai Membership Number: 107038
Date: July 22 2020 UDIN: 20107038AAAABT3162

Annexure A to Independent Auditor's Report

Referred to in paragraph 15(f) of the Independent Auditor's Report of even date to themembers of Balaji Telefilms Limited on the standalone financial statements for the yearended March 31 2020

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Balaji Telefilms Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. 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 includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. 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.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 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. Also refer paragraph 4(a) ofour main report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sachin Parekh
Partner
Place: Mumbai Membership Number: 107038
Date: July 22 2020 UDIN: 20107038AAAABT3162

Annexure B to Independent Auditor's Report

Referred to in paragraph 14 of the Independent Auditor's Report of even date to themembers of Balaji Telefilms Limited on the standalone financial statements for the yearended March 31 2020

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

(b) The fixed assets of the Company have been physically verified by the Managementduring the year and no material discrepancies have been noticed on such verification. Inour opinion the frequency of verification is reasonable.

(c ) The title deeds of immovable properties as disclosed in Note 4(a) on propertyplant and equipment to the financial statements are held in the name of the Company.

ii. The Company is into the business of making television/internet programs and sale/licensing of films and accordingly does not hold inventory (i.e. goods). Therefore theprovisions of Clause 3(ii) of the said Order are not applicable to the Company.

iii. The Company has granted unsecured loans to one company covered in the registermaintained under Section 189 of the Act. The Company has not granted any loans to firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.

(b) In respect of the aforesaid loans the principal and interest is payable on demandby the party and as per the information and explanations provided to us the party haspaid the principal and interest during the year to the extent demanded by the Company.

(c ) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

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 Act in respect ofthe loans or investments made or guarantees or security provided by it.

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 subsection (1) of Section 148 of the Act for any of the services 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 regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax goods and service tax cess and other material statutory dues as applicable withthe appropriate authorities. vii. (b) According to the information and explanations givento us and the records of the Company examined by us there are no dues of duty of customsduty of excise and goods and service tax which have not been deposited on account of anydispute. The particulars of dues of income tax sales tax service tax and value added taxas at March 31 2020 which have not been deposited on account of a dispute are asfollows:

Name of the statute Nature of dues Amount (Rs. in Lacs) Period to which the amount relates Forum where the dispute is pending
The Finance Act 1994 Service Tax 6348.00 2006-07 and 2007-08 High Court of Judicature at Bombay
The Finance Act 1994 Service Tax 2943.00 April 2008 to April 2011 Commissioner of Service Tax
Value Added Tax and Central Sales Tax Act Sales Tax and VAT 145.50 2012-13 and 2013-14 Joint Commissioner of Sales Tax
The Income Tax Act 1961 Tax Deducted at Source 218.08 2009-10 and 2010-11 High Court of Judicature at Bombay

viii. As the Company does not have any loans or borrowings from any financialinstitution or bank or Government nor has it issued any debentures as at the balancesheet date the provisions of Clause 3(viii) of the Order are not applicable to theCompany. 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 ourexamination of the books and records of the Company carried out in accordance with thegenerally accepted auditing practices in India and according to the information andexplanations given to us we have neither come across any instance of material fraud bythe Company or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. Also refer paragraph 16 of our main audit report.

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 IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under audit. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company. xv. TheCompany has not entered into any non-cash transactions with its directors or personsconnected with him. Accordingly the provisions of Clause 3(xv) of the Order are notapplicable 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 Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sachin Parekh
Partner
Place: Mumbai Membership Number: 107038
Date: July 22 2020 UDIN: 20107038AAAABT3162