To the Members of Music Broadcast Limited
Report on the audit of the financial statements
1. We have audited the accompanying financial statements of MusicBroadcast Limited ("the Company") which comprise the Balance Sheet as at March31 2020 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.
2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 and totalcomprehensive income (comprising profit and other comprehensive income) changes in equityand its cash flows for the year then ended.
BASIS FOR OPINION
3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Act and the Rulesthereunder 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 opinion.
EMPHASIS OF MATTER
4. We draw your attention to Note 2(b) to the financial statementswhich describes the management's assessment of the impact of the outbreak ofCoronavirus (Covid-19) pandemic on the business operations of the Company. The managementbelieves that no adjustments are required in the financial statements as it does notimpact the current financial year however in view of the various preventive measurestaken (such as complete lock-down restrictions by the Government of India travelrestrictions etc.) and highly uncertain economic environment a definitive assessment ofthe impact on the subsequent periods is highly dependent upon circumstances as theyevolve. Our opinion is not modified in respect of this matter.
KEY AUDIT MATTERS
5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key audit matter ||How our audit addressed the key audit matter |
|a) Assessment of carrying amount of deferred tax balances and impact of changes in estimates ||Our procedures in relation to the management's assessment included the following: |
|[Refer to the accompanying note 12 of the financial statements] Pursuant to the enactment of the Finance Act 2019 and The Taxation Laws (Amendment) Act 2019 announcing key changes to corporate tax rates in the Income-tax Act 1961 the management has carried out an assessment to consider the implications of the amendments providing an option to pay tax at a concessional rate subject to compliance with conditions prescribed therein specifically surrender of specified deductions/ incentives. Basis the management's assessment including projections of future taxable profits and the impact on carrying amount of deferred tax including Minimum Alternate Tax (MAT) credit balances the Company has estimated to adopt lower rates of tax in a future year after utilising the available MAT credit balance. Accordingly it has reversed deferred tax liability (DTL) amounting to Rs 751 lakhs during the year which is significant to the financial statements. || Understanding and evaluation of the process and controls designed and implemented by the management in relation to Income Taxes'. |
| || Reviewing the Company's accounting policy in respect of recognising deferred tax assets/ liabilities including MAT credit. |
| || Evaluating the management's assessment of availing benefits and exemptions under the Income-tax laws. |
| || Assessing appropriateness of the tax rate applied to future taxable profits in light of current tax laws and substantively enacted tax rates. |
| || With the involvement of our experts evaluating the management's assessment on the availability of future taxable profits to support reversal of deferred tax balances as at the year-end. |
|We considered this as a key audit matter because of the significance of the amounts involved interpretation of the tax laws in assessing satisfaction of the prescribed conditions significant judgments involved in estimation of future taxable profits period over which MAT credit would be utilised and the expected year of adoption of the concessional tax rate. || Assessing the reasonableness of the assumptions underlying the management's forecasts of future profits by comparing to historical results and the approved business plans in light of the relevant economic and industry indicators. |
| || Performed sensitivity analyses on the projected taxable profits by varying key assumptions within reasonably foreseeable range. |
| || Assessing the adequacy of disclosures (notes 12 and 20) in the financial statements on deferred tax and on basis of management estimates. Based on the above procedures performed the management's assessment of carrying value of deferred tax balances was considered to be consistent with our understanding. |
|b) Assessment of impairment of Property plant and equipment Right-of-use assets and Intangible assets under Ind AS 36 ||Our procedures in relation to the management's assessment included the following: |
|[Refer to the accompanying note 30 of the financial statements] || Understanding and evaluation of the process and controls designed and implemented by the management to assess the potential impairment of Non-financial assets. |
|The Company carries its Property Plant and Equipment Right- of-use assets and Intangible assets (hereinafter referred to as "Non-financial assets") at cost less accumulated depreciation and impairment losses. || Evaluating the Company's accounting policy in respect of impairment assessment of Non-financial assets. |
|As at March 31 2020 the net assets of the Company exceeded the Company's market capitalisation. This reduction in market capitalisation triggered the requirement for the Company to assess the carrying amount of Non-financial assets for potential impairment. || Assessing appropriateness of determination of cash generating unit (CGU) in line with the requirements of Ind AS 36 considering the nature of the Company's operations. |
|The management has used discounted cash flow model to assess the value in use of the Non-financial assets which requires judgement in respect of certain key inputs like determining an appropriate discount rate future cash flows etc. Basis the management's assessment and forecast of business conditions the recoverable amount of the Non- financial assets is higher than their carrying value and accordingly the management has concluded that no impairment loss needs to be recorded. || With the involvement of our valuation experts evaluating the appropriateness of key assumptions underlying the cash flow projections including growth and discount rates used within the discounted cash flow model with specific focus on forecast revenue comparing to readily available market information and underlying macro-economic factors. |
| || Performing sensitivity analysis on the projections by varying key assumptions within reasonably foreseeable range. |
|We considered this as a key audit matter because of the significant judgement and management estimates involved around impairment assessment. || Comparing of carrying value of the net assets with the estimated cash flows determined by the management |
| || Assessing the adequacy of disclosures made in the financial statements. |
| ||Based on the above procedures performed the results of management's assessment of impairment of Non-financial assets were considered to be consistent with the outcome of our procedures. |
6. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the annualreport but does not include the financial statements and our auditor's reportthereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance forthe financial statements
7. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
8. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the financialstatements
9. Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
10. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
11. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
12. We also provide those charged with governance with a statement thatwe have complied 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 governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
14. 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 of the Act we give in the Annexure B a statement on the mattersspecified in paragraphs 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure A".
(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements Refer Note 25(a) and 25(b) to thefinancial statements.
ii. The Company has long-term contracts as at March 31 2020 for whichthere were no material foreseeable losses. The Company did not have any derivativecontracts as at March 31 2020.
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312020.
iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended March 31 2020.
16. The Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
|For Price Waterhouse Chartered Accountants LLP |
|Firm Registration Number: 012754N/ N500016 |
|Chartered Accountants |
| ||Anurag Khandelwal |
| ||Partner |
|Place: Gurugram ||Membership Number: 078571 |
|Date: May 25 2020 ||UDIN: 20078571AAAAAV5795 |
Annexure A to Independent Auditors' Report
Referred to in paragraph 15(f) of the Independent Auditors' Reportof even date to the members of Music Broadcast Limited on the financial statements for theyear ended March 31 2020
Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference tofinancial statements of Music Broadcast Limited ("the Company") as of March 312020 in conjunction with our audit of the financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under Section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financialstatements
6. A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with referenceto financial statements
7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control controls with reference to financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 31 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Also refer paragraph4 of the main audit report.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/ N500016 Chartered Accountants
Place: Gurugram Membership Number: 078571 Date: May 25 2020UDIN:20078571AAAAAV5795
Annexure B to Independent Auditors' Report
Referred to in paragraph 14 of the Independent Auditors' Report ofeven date to the members of Music Broadcast Limited on the financial statements as of andfor the year ended March 31 2020 i. (a) The Company is maintaining proper records showingfull particulars including quantitative details and situation of fixed assets (propertyplant and equipment). v (b) The fixed assets (property plant and equipment) arephysically verified by the Management according to a phased programme designed to coverall the items over a period of 3 years which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the programme aportion of the fixed assets (property plant and equipment) has been physically verifiedby the Management during the year and no material discrepancies have been noticed on suchverification.
(c) The title deeds of immovable properties as disclosed in Note 3(a)on fixed assets (property plant and equipment) to the financial statements are held inthe name of the Company.
ii. The Company is in the business of rendering services andconsequently does not hold any inventory. Therefore the provisions of Clause 3(ii) ofthe said Order are not applicable to the Company.
iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 186 of the CompaniesAct 2013 in respect of the investments made. The Company has not granted any loans orprovided any guarantees or security to the parties covered under Section 186.
Further the Company has not granted any loans or made any investmentsor provided any guarantees or security to the parties covered under Section 185.
v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.
vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.
vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is regular indepositing the undisputed statutory dues including provident fund employees' stateinsurance income tax cess goods and services tax and other material statutory dues asapplicable with the appropriate authorities. Also refer note
25 (c) to the financial statements regarding management'sassessment on certain matters relating to provident fund.
Further for the period March 1 2020 to March 31 2020 for Maharashtraand Karnataka states the Company has paid Goods and Services Tax and filed form GSTR- 3B(after the due date but) within the timelines allowed by Central Board of Indirect Taxesand Customs under the Notification No. 31/2020- Central Tax dated April 3 2020 onfulfilment of conditions specified therein.
(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of sales tax service-tax valueadded tax and goods and services tax which have not been deposited on account of anydispute. The particulars of dues of income tax as at March 31 2020 which have not beendeposited on account of a dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (` in Lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income tax ||5.02 ||A.Y. 2009-10 ||Deputy Commissioner of Income Tax |
|Income Tax Act 1961 ||Income tax ||98.92 ||A.Y. 2009-10 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||53.93 ||A.Y. 2017-18 ||Assistant Commissioner of Income Tax |
|Total || ||157.87 || || |
viii. As the Company does not have any loans or borrowings from anyfinancial institution or bank or Government nor has it issued any debentures as at thebalance sheet date the provisions of Clause 3(viii) of the Order are not applicable tothe Company.
ix. In our opinion and according to the information and explanationsgiven to us the moneys raised by way of initial public offer (including debt instruments)and term loans have been applied for the purposes for which they were obtained.
x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.
xi. The Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act. Also refer paragraph 16 of our main audit report.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.
xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections
177 and 188 of the Act. The details of such related party transactionshave been disclosed in the financial statements as required under Indian AccountingStandard (Ind AS) 24 Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.
xv. The Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/ N500016 Chartered Accountants
| ||Anurag Khandelwal |
| ||Partner |
|Place: Gurugram ||Membership Number: 078571 |
|Date: May 25 2020 ||UDIN:20078571AAAAAV5795 |