To the Members of
Quadrant Televentures Limited
Report on the Audit of the Financial Statements
1. Qualified Opinion
We have audited the accompanying financial statements of Quadrant Televentures Limited("the Company") which comprise the Balance Sheet as at March 31 2021 andthe Statement of Profit and Loss including Other Comprehensive Income Statement ofchanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effect of the matter described in the Basis forqualified Opinion in paragraph 2 below the aforesaid financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules 2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at
March 31 2021 its loss including other comprehensive loss changes in equity and itscash flows for the year ended on that date.
2. Basis for Qualified Opinion
We conducted our audit in accordance with the
Standards on Auditing ("SA"s) specified under Section
143(10) of the Companies Act 2013 as amended ("the
Act"). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered
Accountants of India ("ICAI") together with the ethical requirements that arerelevant to our audit of the Financial Statements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.
As stated in Note No. 40 of the statements balances of some of the trade payableother liabilities advances and security deposits pertaining to erstwhile GSM business aresubject to confirmations reconciliation and adjustments if any. The effect of the sameis unascertainable and hence the consequential cumulative effect thereof on net lossincluding other comprehensive income for the year assets liabilities and other equity isunascertainable.
3. Material Uncertainty Related to Going Concern
We draw attention to note no. 42 to the financial statements wherein the Company hasincurred a net loss of Rs. 2959375788 during the year and the accumulated losses as atMarch 31 2021 amounted to Rs. 22317512974 resulting in the erosion of its net worththese factors raise doubts that the Company will not be able to continue as a goingconcern. The management is confident of generating cash flows from continue businessoperations through increasing subscriber' base and ARPU as well as through restructuringof bank loans along with the support of other stakeholders. Hence in view of the abovethe financial statements have been prepared on a going concern basis. Our report is notqualified in respect of this matter.
4. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Sr. Key Audit Matter No. ||Auditor's Response |
|1. Revenue Recognition: ||Our Audit procedure included: |
|Revenue is recognised at the fair value of the consideration received or receivable which is generally the transaction price net of any taxes / duties rebate discounts and process waivers. (refer note 3.12 ) ||Assessing the appropriateness of the revenue recognition accounting policies including those relating to discount rebate and waivers by comparing with applicable accounting standards. |
|Due to Company's presence across different marketing regions within the country and the competitive business environment the estimation of various types of discounts rebate waivers to be recognised based on services made during the year is material and considered to be judgmental. Due to the level of judgement relating to recognition revenue discount rebate and waiver this is considered a key audit matter. ||Testing the design implementation and operating effectiveness of the Company's general IT controls over the Company's systems and manual controls which govern recording of revenue and discount rebates and waiver in the general ledger accounting system. |
| ||Performing substantive testing (including year-end cut off testing) by selecting samples of revenue transactions recorded during the year (and before and after the financial year-end) by verifying the underlying documents and approval procedure. |
| ||Comparing the historical trend of discount rebate and waiver. |
| ||Assessing the manual journal posted to revenue. |
| ||Considered the adequacy of the Company's disclosure in respect of revenue. |
|2. Evaluation of Provision and Contingent Liabilities: ||Our Audit procedure included: |
|As at the Balance Sheet date the Company has significant open litigation and other contingent liabilities as disclosed in note no. 41. The assessment of the existence of the present legal or constructive obligation analysis of the probability or possibility of the related payment require the management to make judgement and estimates in relation to the issues of each matter. The management with the help of opinion and advise of its experts have made such judgements and estimates relating to the likelihood of an obligation arising and whether there is a need to recognize a provision or disclose a contingent liability. Due to the inherent complexity and level of judgement relating to recognition valuation and presentation of provision and contingent liabilities this is considered a key audit matter. ||We have reviewed and held discussions with the management to understand their processes to identify new possible obligations and changes in existing obligations for compliance with the requirements of Ind AS 37 on Provisions Contingent Liabilities and Contingent Assets. |
| ||We have also discussed with the management significant changes from prior periods and obtained a detailed understanding of these items and assumptions applied. We have held regular meetings with the management and key legal personnel responsible for handling legal matters. |
| ||In addition we have reviewed: |
| ||the details of the proceedings before the relevant authorities including communication from the advocates / experts; |
| ||legal advises / opinions obtained by the management if any from experts in the field of law on the legal cases; status of each of the material matters as on the date of the balance sheet. |
| ||We have assessed the appropriateness of provisioning based on assumptions made by the management and presentation of the significant contingent liabilities in the financial statements. |
|3. Impact of COVID- 19 on Audit ||Due to "work from home" approach adopted we performed following alternative audit procedures: |
|Due to outbreak of pandemic COVID- 19 and consequent country wide lockdown enforced by Government of India. Due to this we could not carry out normal audit procedures by visiting the QTL office and audit was carried out using "Work from Home" approach. ||Remote Access to SAP financial accounting software. |
|This is considered as Key Audit Matter since alternate audit procedures were performed for carrying out audit ||Various data and were received either electronically through email or through data sharing on drive. |
| ||For various audit procedures reliance was placed on scanned copies of original document shared with us electronically. Interview / discussion with client via video conferencing / call conferencing and other verbal communications. |
5. Information other than the Financial Statements and
Auditor's Report Thereon
The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theCompany's Annual Report Management Discussion and Analysis 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 the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
6. Responsibilities of Management's for the Financial
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the
Act read with the Companies (Indian Accounting
Standards) Rules 2015 as amended. 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 the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring 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.
In preparing the 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.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
7. Auditor's Responsibilities for the Audit of the
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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
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 significance were of most in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.
8. 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 Companies Act 2013 we give in the Annexure-A a statement on the matters specified inparagraphs 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 except for the matter described in the Basis forqualified Opinion in paragraph 2 above all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit;
b) except for the matter described in the Basis for qualified Opinion in paragraph 2above 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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Companies (Indian Accounting Standards) Rules2015 as amended;
e) On the basis of the written representations received from the directors as on 31stMarch
2021 taken on record by the Board of Directors none of the directors disqualifiedas on March
31 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind
AS financial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B";
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationgiven to us the managerial remuneration for the year ended March 31 2021 has been paid /provided by the Company to its directors in accordance with the provisions of section 197read with Schedule V of the Act;
h) 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 disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 41 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses Refer Note 41 to the financialstatements;
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the
Annexure - A to the Independent Auditors' Report on the Financial Statements
Annexure referred to in paragraph 8 (1) of the Independent Auditors' Report of evendate to the members of Quadrant Televentures Limited on the financial statementsfor the year ended 31st March 2021 we report that:
I. (a) The Company has maintained proper records
showing full particulars including quantitative details and situations of its FixedAssets. (b) The Company has verification program of to cover all the items of fixedassets in a phased manner which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets.
Pursuant to the program the management during the year physically verified certainfixed assets. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
(c) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable properties areheld in the name of the Company. In respect of immovable properties of land and buildingthat have been taken on lease and disclosed as Right of use assets in the financialstatements the lease agreements are in the name of the Company.
II. As per the information furnished the management at reasonable intervals during theperiod has physically verified the Inventories. In our opinion having regard to thenature and location of stocks the frequency of verification physical is reasonable andthe discrepancies noticed verification physical of stocks were not material inrelation to the operation of the Company and the same have been properly dealt with in thebooks of account.
III. According to information and explanations given to us the Company has not grantedany loans secured or unsecured to companies firms limited liability partnerships andother parties covered in the register maintained under section 189 of the Companies Act2013. Accordingly paragraph 3(iii) (a) and (b) of the Order are not applicable.
IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
V. In our opinion and according to the information and explanation given to us theCompany has not accepted any deposits within the meaning of the provisions of
Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under.
VI. We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by Central Government for maintenance of cost records under section148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofthe records with a view to determine whether they are accurate or complete.
VII. (a) According to the information and explanations given to us and records examinedby us in our
opinion the Company has generally been regular in depositing undisputed statutory duesincluding
Provident Fund Employees' State Insurance
Income Tax Goods and Service Tax Custom Duty
Cess and other material statutory dues applicable to it with the appropriateauthorities.
(b) According to the information and explanations given to us there are no undisputedamounts payable in respect of such statutory dues at the year end for a period of morethan six months from the date they became payable.
(c) According to the information and explanations given to us no dues are outstandingwhich have not been deposited on account of disputes and the forum where the dispute ispending are as under:
|SL. No. Name of the Statute ||Nature of Dues ||Period to which the Amount Relates (Financial year) ||Amounts ||Forum where dispute is Pending |
|1 Income Tax ||Penalty 270(A) ||2016-17 ||26529859 ||CIT Appeal |
VIII. According to the information and explanations given to us and recordsexamined by us the Company has defaulted in repayment of dues (including accrued intereston default amounts) to banks / debenture holders as follows:
|A. Amount || |
Amount of Default as at March 31 2021
Delay/Default (In days)
|Outstanding as at March 31 2021 and not paid till date ||Principal ||Interest ||Principal ||Interest |
|IDBI Bank ||1197869378 ||675459828 ||30 - 1339 Days ||31 - 1186 Days |
|Kotak Mahindra Bank ||71336265 ||38604275 ||31 - 913 Days ||30 - 913 Days |
|Life Insurance ||237739860 ||163006690 ||30 - 1461 ||31 - 1520 |
|Corporation of India || || ||Days ||Days |
|State Bank of India ||79250160 ||54004690 ||30 - 1461 Days ||31 - 1520 Days |
|Oriental Bank of Commerce ||237750480 ||165014045 ||30 - 1461 Days ||31 - 1520Days |
|Total ||1823946143 ||1096089528 || || |
Further amount defaulted during the year and paid before the Balance Sheet date are asunder:
|B. Amount paid before the year end || |
Delay/Default (In days)
| ||Principal ||Interest ||Principal ||Interest |
|IDBI Bank ||- ||80000000 ||- ||1031-1211 Days |
|Kotak Mahindra Bank ||- ||1000000 ||- ||857-906 Days |
|Life Insurance Corporation of India ||- ||2000000 ||- ||1458-1513 Days |
|State Bank of India ||- ||1000000 ||- ||1464-1513 Days |
|Oriental Bank of Commerce ||- ||- ||- ||- |
|Total ||- ||84000000 ||- ||- |
IX. As per information and explanations given to us the Company has not raised anymoney by way of initial public offer / further public offer / debt instruments and termloans hence reporting under clause (ix) is not applicable to the Company.
X. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
XI. In our opinion and according to the information and explanation given to us and thebooks of accounts verified by us the Company has paid/provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith the Schedule V to the Act.
XII. The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the order isnot applicable.
XIII. According to the information and explanations given to us and based on ourexamination of the records of the
Company transactions with the related parties are in compliance with Sections 177 and188 of Companies Act 2013 where applicable and details of such transactions have beendisclosed in the Financial Statements as required by the applicable accounting standards.
XIV. According to information and explanations given to us and based on our examinationof the records of the
Company the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly paragraph3(xiv) of the Order is not applicable to the
XV. In our opinion and according to the information and explanation given to us andcertified by the management the Company has not entered into any non-cash transaction withdirectors or persons connected to its directors as referred to in section 192 of CompaniesAct 2013. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.
XVI. 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.
Annexure "B" To The Independent Auditor's Report
Report on the Internal Financial Controls Over Financial
Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")
To the Members of
Quadrant Televentures Limited
We have audited the internal financial controls over financial reporting of QuadrantTeleventures Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon 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 financial 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 Companies Act 2013.
Our responsibility is to express an opinion on the Company's 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") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over FinancialReporting
A Company's internal control over financial reporting is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control over financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 ControlsOver 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India.
| ||For SGN & CO. |
| ||Firm Registration No. 134565W |
| ||Chartered Accountants |
| ||Mohan Kheria |
| ||Partner |
| ||Membership No. 543059 |
| ||UDIN: 21543059AAAAAU4277 |
|Place: Darbhanga || |
|Dated: June 10 2021 || |