TO THE MEMBERS OF CINEVISTA LIMITED.
Report on the audit of the Standalone Financial Statements:
We have audited the accompanying standalone financial statements of Cinevista Limited(the Company) which comprise the Balance Sheet as at March 312019 theStatement of Profit and Loss (including Other Comprehensive income) the Statement ofChanges in Equity and the statement of Cash Flows and for the year ended on that date anda summary of the significant accounting policies and other explanatory information(hereinafter referred to as Standalone Financial Statements).
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 312019 and its total comprehensiveincome (comprising of profit and other comprehensive income) the changes in equity andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10)of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that the relevant to our audit of the Standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgement 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.
Revenue from Agreements with customers which establishes a comprehensive framework fordetermining whether how much and when revenue is to be recognized Ind AS 115 replaces IndAS 18 Revenue. The impact of the adoption of the standard on the financial statements ofthe Company is insignificant.
Revenue from realization of television serials are recognized when the televisionprogrammes being produced and delivered to the Channels and when there are no longer anyunfulfilled obligations.
The performance Obligations in our contracts are fulfilled at the time of delivery ofprogrammes in file format or upon customer acceptance depending on customer terms. Revenueis measured at fair value of the consideration received or receivable after deduction ofany trade discounts volume rebates and any taxes or duties collected on behalf of theGovernment such as Goods and Services Tax etc. Accumulated experience is used to estimatethe provision for such discounts and rebates. Revenue is only recognized to the extentthat it is highly probable a significant reversal will not occur.
Income from location hire is recognized based on agreements and arrangements with theclients as the location is rented out and there are no unfulfilled obligations.
(Refer Note 2 (d) to the Financial Statement)
Our audit procedures included:
We assesed the appropriateness of the revenue recognition accounting policiesincluding those relating to rebates and discounts by comparing with applicable accountingstandards.
We tested the design implementation and operating effectiveness of management'sgeneral IT controls and key application controls over the Company's IT systems whichgovern revenue recognition including access controls controls over program changesinterfaces between different systems and key manual internal controls over revenuerecognition of assess the completeness of the revenue entries being recorded in thegeneral ledger accounting system.
We tested the design implementation and operating effectiveness of controlsover the calculation of discounts and rebates.
We performed substantive testing by selecting samples of revenue transactionsrecorded during the year by verifying the underlying documents which included invoicesand agreements.
We inspected on a sample basis key major clients contracts to identify termsand conditions relating realization of television serials and location hire income andrebates and assessing the company's revenue recognition policies with reference to therequirements of the applicable accounting standards.
We performed substantive testing by selecting samples of rebate and discounttransactions recorded during the year and comparing the parameters used in the calculationof the rebate and discounts with the relevant source documents (including tax invoice andagreements) to assess whether the methodology adopted in the calculation of the rebatesand discounts was in accordance with the terms and conditions defined and correspondingcustomer agreements.
We performed cut-off testing for samples of revenue transactions recorded beforeand after the financial year end date by comparing with relevant underlying documentationwhich included realization of television serials and location hire income to assesswhether the revenue was recognized in the correct period.
Provision for Taxation Litigation and other significant provisions:
The Company has uncertain tax positions including matters under dispute which involvessignificant judgment to determine the possible outcome of these disputes.
(Refer Note No. 5 (5.4.1 & 5.4.2) To the Financial Statement)
We tested the effectiveness of controls around the recognition of provisions.
We used our subject matter experts to assess the value of material provision inthe light of the nature of the exposures applicable regulations and relatedcorrespondence with the authorities.
We obtained the details of completed assessments and demands for the year endedMarch 31 2019 from the management. We involved our subject matter experts to challengethe management's underline exemption and critical judgments' in estimating the taxprovision and possible outcome of the disputes. Our subject matter experts also consideredlegal precedence and other rulings in evaluating management's position on these uncertaintax positions.
We performed retrospective review of management judgments relating to accountingestimate included in the financial statement of prior year and compared with the outcome.
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 our auditor'sreport 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 thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements:
The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Companies Act 2013 (the Act) with respect to thepreparation of these Standalone financial statements that give a true and fair view of thestatement of affairs profit/loss(including other comprehensive income) changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularitiesselection and application of appropriate accounting policies making judgments andestimates that are reasonable and prudent and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due 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 are alsoresponsible for overseeing the Company's Financial reporting process.
Auditors' 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 it is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exits.Misstatements can arise from fraud or error and are consider material if individually orin the aggregate they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these standalone financial statements.
As part of an audit in accordance with SA's we exercise professional judgment andmaintain professional skeptism 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 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 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 ourauditor's 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 auditor's 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 Company's (Audit's Report) Order 2016(the Order)issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act (the Order) we give in the Annexure A a statement on thematters specified in paragraph 3 and 4 of the Order to the extent applicable.
2. 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 the statement of cash flows dealt with bythis report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164 (2) of theAct.
(f) With respect to the adequacy of the internal financial controls with reference tothe financial 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 Auditors' Report in accordancewith Rule 11 of
the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation
and according to the explanations given to us:
(i) The Company has disclosed the impactof pending litigations as at March 312019 onits financial position in its Standalone financial statements.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(iv) The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8th November 2016to 30th December 2016 have not been made in these standalone financialstatements since they do not pertain to the financial year ended March 312019.
4. With respect to the matter to be included in the Auditor's Report under section197(16):
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. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) which arerequired to be commented upon by us.
For sARATH & AssoCIATEs
Firm Regn. No. 5120s
CA. R.LAKsHMI RAo
M. No. 029081.
Date: May 30 2019.
ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
With reference to the Annexure A referred to in the Independent Auditor'sReport on the standalone Financial Statements of Cinevista Limited for the year endedMarch 31 2019 we report the following:
1. In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provided forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us and the records examinedby us we report that the title deeds comprising all the immovable properties of landand buildings which are freehold are held in the name of the Company as at the balancesheet date.
2. The physical verification of inventory has been conducted at reasonable intervals bythe management during the year (Television Serials and Film Produced Special PurposeVehicle) are verified with reference to the title documents/agreements . No materialdiscrepancies were noticed on verification of inventory as compared to book records.
3. The Company has granted interest free unsecured loans to Companies Firms LimitedLiability Partnership or other parties covered in the register maintained under Section189 of the Act.
(a) According to the information and explanations given to us the terms and conditionson which the unsecured loans had been granted to Companies Firms Limited LiabilityPartnerships or other parties listed in the register maintained under Section 189 of theAct were not prima facie prejudicial to the interest of the Company.
(b) In the case of the unsecured loans previously granted to companies firms or otherparties listed in the register maintained under section 189 of the Act the terms ofarrangements do not stipulate any repayment schedule both for interest and principal.Therefore in absence of stipulation of repayment terms we do not make any comment on theregularity of repayment of principal and payment and interest.
(c) According to the information and explanations given to us the Company has takenreasonable steps for recover of the principal amount and the amount outstanding from thecompanies firms or other parties listed in the register maintained under section 189 ofthe Act is Rs.37561682/- (Previous year Rs.37561682/-).
4. 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 ofloans and investments made as applicable. There are no guarantees and security providedby the company.
5. The Company has not accepted any deposits from public during the year within themeaning of sections 73 to 76 of the Act and any other relevant provisions of the Act andthe relevant rules framed there under and does not have any unclaimed deposits as at March312019 and therefore the provisions of the clause 3(v) of the Order are not applicableto the Company.
6. Reporting under clause 3(vi) of the Order is not applicable as the Company'sbusiness activities are not covered by the Companies (Cost Records and Audit) Rules 2014and section 148(1) of the Act.
7. According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Income Tax Goods and Service Tax and other material statutory dues applicableto it with the appropriate authorities.
(b) There were undisputed amounts payable in respect of Income Tax(TDS)and Goods andService Tax (GST)and other material statutory dues in arrears as at March 312019 for aperiod of more than six months from the date they became payable is Rs 21101329/- andRs 22393896/- respectively totaling to Rs 43495225/- (Principal)
(c) (i) Details of dues of Income Tax and Service Tax which have not been deposited asat March 312019 on account of disputes are given below:
|Particulars ||Forum where the disputes are pending ||Financial Year to which the amount relates ||Amount (in Rupees) |
|Income Tax ||The Income Tax Dept. have filed appeal before the Mumbai High Court against the order of Income Tax Appellate Tribunal (ITAT) which was in favour of the Company. ||01-04-1987 to 15-12-1997 (Block Period) ||4830381/- |
|Service Tax ||The Customs Excise & Service Tax Appellate Tribunal West Regional Bench Mumbai ||2008-09 to 2012-13 ||1051106/- |
(ii) There were no dues of Sales Taxduty of customs duty of Excise Cess and Valueadded tax which have not been deposited as at March 312019 on account of dispute.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks. The Companydoes not have any loans or borrowings from financial institutions or government and hasnot issued any debentures.
9. The Company has not raised any monies by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause 3(ix) of the Order is not applicable to the company.
10. According to the information and explanations given to us no material fraud by theCompany and or on the Company by its officers or employees has been noticed or reportedduring the year.
11. According to the information and explanations given to us and based on ourexamination of records the Company has paid or provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
12. In our opinion and according to information and explanations given to us theCompany is not a Nidhi Company as prescribed under section 406 of the Act and the NidhiRules 2014 are not applicable to it and hence reporting under clause 3 (xii) of the Orderis not applicable.
13. In our opinion and according to the information and explanations given to us andbased on our examinations of the records the Company is in compliance with Section 177and 188 of the Act where applicable for all transactions with the related parties and thedetails of related party transactions have been disclosed in the standalone financialstatements as required by the applicable accounting standards.
14. According to the information and explanations given to us and based on ourexaminations of the records of the Company the company has not made any preferentialallotment or private placement of shares fully or partly convertible debentures during theyear and hence reporting under clause 3(xiv) of the Order is not applicable to theCompany.
15. In our opinion and according to the information and explanations given to us andbased on our examination of the records of the company the Company has not entered intoany non-cash transactions with its Directors or persons connected to its Directors as perprovisions of Section 192 of the Act. Accordingly reporting under clause 3 (xv) of theOrder is not applicable to the company.
16. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly reporting under clause 3 (xvi) of the Order is not applicable to the company.
For sARATH & AssoCIATEs
Firm Regn. No. 5120s
ca. r.lakshmi rao
M. No. 029081.
Place : Mumbai.
Dated: 30th May 2019.
ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2(f) under Report on other Legal and RegulatoryRequirements' section of our Report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act')
We have audited the internal financial controls with reference to the financialstatements of Cinevista Limited (the Company) as of March 312019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 March 312019 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 on 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 Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal control financials withreference to financial statement criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the Guidance Note) issued by theInstitute 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 Companies Act 2013(hereinafter reffered to as the Act)
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 and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to the financial statements. ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control 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 auditors'judgment including the assessment of the risks of material misstatement of the standalonefinancial 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements:
A company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 statement may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
| ||For sARATH & AssoCIATEs |
| ||CHARTERED ACCoUNTANTs |
| ||Firm Regn. No. 5120s |
| ||ca. r.lakshmi rao |
|Place : Mumbai. ||Partner. |
|Dated: 30th May 2019. ||M. No. 029081. |