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Padmalaya Telefilms Ltd.

BSE: 532350 Sector: Media
NSE: PADMALAYAT ISIN Code: INE243B01016
BSE 13:10 | 01 Dec 2.36 0.01
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NSE 05:30 | 01 Jan Padmalaya Telefilms Ltd
OPEN 2.30
PREVIOUS CLOSE 2.35
VOLUME 613
52-Week high 3.30
52-Week low 1.90
P/E
Mkt Cap.(Rs cr) 4
Buy Price 2.24
Buy Qty 328.00
Sell Price 2.36
Sell Qty 39.00
OPEN 2.30
CLOSE 2.35
VOLUME 613
52-Week high 3.30
52-Week low 1.90
P/E
Mkt Cap.(Rs cr) 4
Buy Price 2.24
Buy Qty 328.00
Sell Price 2.36
Sell Qty 39.00

Padmalaya Telefilms Ltd. (PADMALAYAT) - Auditors Report

Company auditors report

To the Members of

M/S PADMALAYA TELEFILMS LIMITED

Report on the Ind AS Financial Statements

Qualified Opinion

We have audited the accompanying Ind AS Financial Statements of M/s PADMALAYA TELEFILMSLIMITED ("the company") which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of changes in equity for the year then ended and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 and Profit and its cash flows for the year ended on that date.

Basis for Qualified Opinion:

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Group inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made there underand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

Qualified Opinion paragraph:

1. The company has not paid the GST Liability up to 31-03-2020 year ended (Note No:24).

2. The company has not submitted physical verification reports of inventory aggregatingto Rs. 131313770/- as at 31st march 2020 and no provision for impairment has been madetherein. In the absence of alternative corroborative evidence we are unable to comment oncarrying value of inventory and realizable value of the same.(Note No : 26)

3. The company has not submitted the confirmations of Trade Payables and Tradereceivables. However during the year under consideration the company has written off Tradereceivables of an amount of Rs.12758061/- without providing any provision of the sameuntil the last quarter. The company has not submitted confirmations in respect of Tradereceivables of Rs.3600000/- as on 31-03-2020 Trade payables of Rs. 2156478/- andOther payables amount of Rs.31072646/- .In the absence of alternative corroborativeevidence we are unable to comment on the extent to which such balances as payable orreceivable.(Note No:25)

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificant in our audit of the IND AS financial statements for the financial year 31stMarch 2019. These matters were addressed in the context of our audit of the IND Asfinancial statements as a whole and in forming our opinion thereon and we don't provideseparate opinion on these matters.

Except the matters discussed in the Qualified Opinion paragraph there are no other keyaudit matters to be discussed.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. When we read the annual report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith the governance.

Management's Responsibility for the Financial Statements

The Company's 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 financial statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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.

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 financial controls relevant to the audit inorder to design audit Procedures that is appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 exists;we 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.

• Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

• We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

• We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

• 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

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

2. As required by Section 143(3) of the Act based on our audit 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 except for thepoints discussed in the qualified opinion paragraph.

b) In our opinion proper books of accounts is maintaining by the company as requiredby law so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014except for the matters discussed in the Qualified Opinion Paragraph.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors are disqualifiedin terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an modified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has no pending litigations on its financial position in its financialstatements.

ii. The Company does 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.

For P C N & Associates

Chartered Accountants

Firm Registration no: 016016S

Sd/-

Lakshmi Prasanthi.S

Partner

M.No:236578

Place: Hyderabad

Date:31-07-2020

Udin: 20236578AAAAAR2204

"ANNEXURE A"TO THE INDEPENDENT AUDITOR'S REPORT

Annexure referred to in Independent Auditors Report to the Members of M/s. PADMALAYATELEFILMS LIMITED on the Ind AS Financial Statements for the year ended 31st March 2020we report that:

i. The Company has no fixed assets. Accordingly the provisions of this clause are notapplicable to the company.

ii. As per the information given by the management the physical verification ofinventory has not been conducted during the year and the company is in the process ofconducting the same. Hence in the absence of corroborative evidence we are unable tocomment upon the inventory shown in the balance sheet as at 31 March 2020 fow which wehave given qualified opinion in our Basis of Qualified Opinion Paragraph.

iii. The Company has not granted any loans secured or unsecured to companies firmsand Limited Liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013. 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 explanations given to us theCompany has not granted any loans or made any investments or provided any guarantee orsecurity to the parties covered under 185 and 186 of the companies Act 2013 .Thereforethe provisions of the clause 3(iv) of the said order are not applicable to the company.

v. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and rules framed there under to the extent notified.

vi. The Cost records as specified under Sec 148(1) of the Companies Act 2013 are notprescribed to the Company.

vii. (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is generally regular in depositing theundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax and other material statutory dues except the GST since the inception of theAct.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax and other material statutory dues in arrears as at 31st March2020 for a period of more than 6 months from the date they became payable.

(c) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues to Income Tax Act and Material Statutorydues which have not been deposited on account of any disputes.

viii. The company has not taken any loans from financial institutions or Banks orGovernment and has not issued any debentures.

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 ofthis clause are not applicable.

x. According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our Audit.

xi. The Company has not paid/provided for managerial remuneration during the year.Accordingly the provisions of section 197 of the companies act 2013 are not applicable.

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 not entered into transactions with related parties during theyear. Accordingly the provisions of the clause 3(xiii) of the order are not applicable tothe company.

xiv. According to the information and explanations given by the management the companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year.

xv. The Company has not entered into non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of clause 3(xv) of the Order arenot applicable 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 P C N & Associates

Chartered Accountants

Firm Registration no: 016016S

Sd/-

Lakshmi Prasanthi.S

Partner

M.No:236578

Place: Hyderabad

Date: 31-07-2020.

Udin: 20236578AAAAAR2204

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/sPADMALAYA TELEFILMS LIMITED ("the Company") as of March 31 2020 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

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.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes these policies and procedures that (1) pertain to themaintenance of records that in reasonable detailed accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASFinancial Statements in accordance with generally accepted principles and that receiptsand expenditures are being made only in accordance with authorization of management anddirectors of the Company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the Ind AS Financial Statements.

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation 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 financial

Reporting 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

Qualified Opinion:

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of thecompany internal financial controls over financial reporting as at March 31 2020

1. Balances of trade receivable trade payables other liabilities and loans &advances are subject to confirmation.

2. Statutory Dues payments are delayed and making provision for the same has beendelayed hence the company needs to strengthen internal control system in this regard.

3. Inventory Verification has not been conducted by the company during the year underconsideration.

4. The company has not appointed company secretary during the year also which is noncompliance as per companies Act 2013.

A material weakness is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the effects/ possible effects of the material weaknessdescribed above under qualified opinion paragraph on the achievement of the objectives ofthe control criteria the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 based

on the internal financial controls over financial reporting criteria established by thecompany considering essential components of internal control stated in the Guidance noteon Audit of internal financial controls over financial reporting issued by the ICAI.

We have determined material weakness identified and reported above in determining thenature timing and extent of audit tests applied in our audit of the March 31st 2020 INDAS financial statements of the company and these material weaknesses affect our opinion onIND AS financial statements of the company for the year ended 31st March 2020 { ourreport dated 31st July 2020 which expressed a qualified opinion on these IND ASfinancial statements of the company}

For P C N & Associates

Chartered Accountants

Firm Registration no: 016016S

Sd/-

Lakshmi Prasanthi.S

Partner

M.No:236578

Place: Hyderabad Date: 31-07-2020.

Udin: 20236578AAAAAR2204

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