The Members of
DILIGENT MEDIA CORPORATION LIMITED
1. Report on the Ind AS financial statements
We have audited the accompanying Ind AS financial statements of DILIGENT MEDIACORPORATION LIMITED ("The Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss (including other comprehensive income)Cash Flow Statement and Statement of changes in equity for the year then ended and asummary of significant accounting policies and other explanatory information.
2. Managements Responsibility for the financial statements
The Companys 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) prescribed under Section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance 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 e3ectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Auditors Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the Act and the Rules made thereunder. We conducted our audit of Ind ASfinancial statements in accordance with the Standards on Auditing as specified in theprovisions of Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe Ind AS financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the Ind AS financial statements. We believe thatthe audit evidence we have obtained is su3cient and appropriate to provide a basis for ouraudit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the said Ind AS financial statements together with notes thereon give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including theInd-AS of the financial position of the company as at 31 March 2018 and its financialperformance including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.
5. Emphasis of Matters
Without qualifying our report we draw reference to Note No. 42 relating to a Scheme ofArrangement and Amalgamation approved by the Mumbai Bench of Honble NationalCompany Law Tribunal on 08 June 2017 under the Companies Act 2013 ("the Scheme")among the Company Zee Media Corporation Ltd. (ZMCL) Mediavest India Pvt Ltd.(Mediavest) Pri-Media Services Pvt Ltd. (Pri-Media) and Maurya TV Pvt Ltd. (Maurya) andtheir respective Shareholders and Creditors ("the Scheme") inter alia fordemerger of Print Media undertaking of ZMCL vested with the Company and amalgamation ofMediavest India Private Limited and Pri-Media Services Private Limited with DMCL.Accordingly e3ect of the Scheme has been given in the financial statements with e3ectfrom the Appointed date i.e. 01 April 2017.
Pursuant to the said Scheme
(a) the entire pre-scheme paid up Equity share capital of the Company comprising of890955420 Equity shares of Re.1/- each of the Company held by Mediavest and itsnominees stood cancelled; and
(b) the Board of Directors of the Company issued and allotted 117708018 EquityShares of ` 1/- each fully paid up to the Shareholders of ZMCL as on record date of 06October 2017 in the ratio of One Equity Share of ` 1/- each for every Four Equity Sharesof ` 1/- each held in ZMCL.
Subsequently the Equity Shares of the Company were listed on 11 December 2017 on StockExchanges viz. BSE Limited and National Stock Exchange of India Limited.
Our opinion on the financial statements above and our Report on Other Legal andRegulatory requirements below is not modified in respect of the above matters.
6. Report on Other Legal and Regulatory Requirements
A. As required by the Companies (Auditors Report) Order 2016 as issued by theCentral Government of India in terms of Section 143 (11) of the Act (hereinafter referredto as the "Order") and on the basis of such checks of the books and records ofthe Company as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
B. 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 appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss (including other comprehensiveincome) Cash Flow Statement and Statement of changes in equity dealt with by this Reportare in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder.
(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 over financialreporting of the Company and the operating e3ectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating e3ectiveness of the Companys internal financial controlsover financial reporting.
(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 as per theevidences produced details furnished with support and other letters from the Managementwe express our opinion to the best of our information and according to the explanationsgiven to us that:
i. The Company does not have any pending litigations which would impact its financialposition except as otherwise stated in Annexure to Auditors Report and Note No. 31to Notes to Ind AS financial statements hereto.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no amount required to be transferred to the Investor Education andProtection Fund since the same is not applicable to the Company.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: May 18 2018
Annexure "A" to the Independent Auditors Report
(Referred to in Paragraph 6(A) under the heading of "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" of our report of even date to the members of Diligent MediaCorporation Limited on the Ind AS financial statements for the year ended 31 March 2018:Report on Companies (Auditors Report) Order 2016 (the Order) issued bythe Central Government in terms of Section 143(11) of the Companies Act 2013 (theAct) to the members of Diligent Media Corporation Limited ("the Company")
(i) In respect of its fixed assets:
a) The company has maintained proper records showing full particulars includingQuantitative details and situation of its fixed assets.
b) According to the information and explanation given to us by the management of thecompany majority of the fixed assets of the company have been physically verified inphased manner by the management during the year and the intervals of such verificationhad also been reasonable. As informed no discrepancies were noticed on such verification.
c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii) a) The inventories have been physically verified by the Management at reasonableintervals during the year.
b) In our opinion the procedure of such physical verification of inventories followedby the management is reasonable and adequate in relation to the size of the company andnature of its business.
c) In our opinion the Company has maintained proper records of inventory and nomaterial discrepancies were noticed on such verification of stock as compared to bookrecords.
(iii) Based on our verification of the books and records and as per information andexplanations given and documents produced before us by the management the company has notgranted any secured or unsecured loans to companies firms limited liabilitiespartnership firms or others parties covered in the Registers maintained under Section 189of the Act.
(iv) In our opinion according to the information and explanations given to us theCompany has neither given any loans to directors nor has given any guarantee or has notprovided any security during the year Hence the provisions of Section 185 are notapplicable. The company has received under the Arrangement and Amalgamation Scheme asdetailed in Note No 42 of the Notes to financial statements an unsecured inter-corporatedeposit given to a body corporate in compliance with the provision of Section 186 of theAct.
The company has not made any investments. Hence to that extent provision of Section 186of the Act is not applicable.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted deposits from public as covered under the provisions of Sections73 to 76 or any other relevant provisions of the Act and the rules framed there underhence clause (v) of the Order is not applicable.
(vi) We have been informed by the management that the maintenance of cost records hasnot been prescribed by the Central Government under sub-section (1) of Section 148 of theAct.
(vii) a) According to the books records as produced and examined by us in accordancewith Generally Accepted Auditing Practices in India and also based on managementrepresentations statutory dues in respect of provident fund employee state insuranceincome tax wealth tax service tax sales tax value added tax excise duty cess andother material statutory dues have generally been regularly deposited by the company.
b) According to information and explanations given to us there are disputed amountspayable in respect of income tax which is outstanding as on 31st March 2018:
|Name of Statute ||Nature of Dues Dispute is Pending ||Forum where the Amount Relates ||Period to which the Amount Unpaid ||Rs. in Lakhs |
|a. Fringe Benefit Tax Act 1986 ||Tax on employees benefits ||CIT (A)-12 Mumbai ||A Y 2006-07 ||3.63 |
|b. Indian Income tax ||Income tax Act 1961 ||-do- ||A Y 2010-11 ||33.37 |
|c. -do- ||-do- ||-do- ||A Y 2011-12 ||** |
|d. -do- ||-do- Penalty ||-do- ||A Y 2008-09 ||4.40 |
** pending stay of demand and rectification under Section 154 of the Act for adjustmentof loss for the year and brought forward Losses against the addition during the yearwhich will make demand of Rs.5289.53 Lakhs to NIL
c) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31March 2018 for a period of more than six months from the date they became payable.
(viii) According to records of the Company as examined us and as per the informationand explanations given by the management there are no loans taken from financialinstitutions or banks or Government during the year under audit. The company has receivedNon-Convertible debentures under Arrangement and Amalgamation Scheme as detailed in NoteNo. 42 and has not defaulted in repayment thereof as detailed in note no 15 B of theNotes to financial statements.
(ix) The Company has not raised any money by way of initial public o3er or furtherpublic o3er (including debt instruments) or term loans hence reporting under the clause(ix) of the Order is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with 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 been informed of any such case by theManagement.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in compliance with the provisions of section 197read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company hence reporting under clause 3(xii) of theOrder is not applicable.
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act where applicable forall transactions with the related parties and the details of related party transactionshave been disclosed in Note No. 28 of the financial statements as required by theapplicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review exceptallotment of equity shares pursuant to the Scheme of Arrangement and Amalgamation asreferred to in Note No. 42 of the Notes to the financial statements. Hence the clause(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of Section 192 of theAct are not applicable.
(xvi) In our opinion and according to the information given the company is notrequired to be registered under Section 45-I of the Reserve Bank of India Act 1934.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 18 May 2018
Annexure "B" to the Independent Auditors Report of Diligent MediaCorporation Limited ("The Company")
(Referred to in paragraph 6(B)(f) under Report on Other Legal and RegulatoryRequirements of our report of even date).
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of DILIGENTMEDIA CORPORATION LIMITED ("The Company") as of March 31 2018 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat date.
1. Managements Responsibility for Internal Financial Controls:
The Companys 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating e3ectively for ensuring the orderly and e3cient conduct of its businessincluding adherence to companys 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.
2. Auditors Responsibility:
Our responsibility is to express an opinion on the Companys 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures on testbasis to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating e3ectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating e3ectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. We believe that the auditevidence we have obtained is su3cient and appropriate to provide a basis for our auditopinion on the Companys internal financial controls system over financial reporting.
3. Meaning of Internal Financial Controls Over Financial Reporting:
A companys 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 companys internal financial control overfinancial reporting includes those policies and procedures that (1)pertaintothemaintenanceofrecordsthatinreasonable 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys assets that could have a material e3ect on the financial statements.
4. Inherent Limitations of Internal Financial Controls Over Financial Reporting:
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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were checked on test basis considering the size nature and businessoperations is operating e3ectively as at March 31 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 18 May 2018