TO THE MEMBERS OF SAHARA ONE MEDIA AND ENTERTAINMENT LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Sahara One MediaAnd Entertainment Limited("the Company") which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").In our opinion and to the best of our information and according to the explanations givento us subject to the matters referred to in the Basis for Qualified Opinion section ofour report the aforesaid standalone financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Qualified Opinion a) Reference is invited to Note 29 to the financialstatements regarding deposit of Rupees 694027.88 Thousand to Sahara-SEBI Refund accountin the matter of dispute in respect of repayment of Optionally Fully ConvertibleDebentures (OFCDs) by two group companies namely M/s Sahara India Real CorporationLimited & Sahara Housing Investment Corporation Limited with Security and ExchangeBoard of India (SEBI).The Honourable Supreme Court of India vide its order dated21-11-2013 had directed that Sahara Group of Companies shall not part with movable andimmovable properties and accordingly 'SEBI' has seized the company's Fixed Deposit andNon-Current Investment. Subsequent to this Hon'ble Supreme Court vide it's order dated4th June 2014 has directed to defreeze the Fixed Deposit account of the company subjectto condition that total proceeds would be transferred to special account opened by the'SEBI'. However the matter is pending at Honourable Supreme Court of India; we are unableto comment on the consequential impact if any of the same on the financial statement ofthe company. b) The company has prepared financial statements on a going concern basisnotwithstanding the fact that the major customer of the company has terminated the programpurchase agreement which was main source of income of the Company the company does nothave sufficient fund to pay its creditors recovery from debtors is pending since longadvances given for movie production has stuck with the parties as company is unable toinvest further fund andrevenue from operation has reached to negligible level. Theseevents cast significant doubt on the ability of the Company to continue as a goingconcern. The financial statements do not adequately disclose these matters. c) The bankbalance confirmation of bank accounts having book balance of Rs. 3303.02 Thousand as on31-03-2019 could not be obtained as these accounts are in dormant status. Had balanceconfirmations been received there may have been additional adjustments required to thefinancial statement which are not determinable at this stage.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone 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 independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
a) The Gratuity Trust in which company was making gratuity contribution was dissolvedand Trust has refunded the amount pertains to the company but company has neither createdany recognized gratuity fund Trust nor made any other arrangement to deposit this amountto any other recognized Gratuity Fund Trust. Our opinion is not qualified in respect ofthis matter.
b) The bonus liability of Rupees 274246/- up to Financial Year 2017-18 is lying unpaidas on date. As per section 19 of the Payment of Bonus Act 1965 the payment of bonusshould be made within eight month from the close of the relevant financial year otherwisecompany would be subjected to penalty under section 28 of the Payment of Bonus Act 1965.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matters ||Auditor's Response |
|Evaluation of uncertain tax positions ||Obtained details of completed and pending tax assessments and demands up to March 31 2019 from management. We considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. We discussed the issue with person responsible to ascertain whether any change was required to management's position on these uncertainties. |
|The Company has material uncertain tax positions under dispute which involves significant judgment to determine the possible outcome of these disputes. || |
|Refer Notes 28 to the Standalone Financial Statements || |
|Long pending balances of debtors and advances ||Obtained details of correspondences and legal notices sent to parties and found that legal notice has been served to a debtor which was unanswered. We discussed the issue with persons responsible for governance and we were explained that Management of the company is taking further legal advice and will act accordingly. In respect to advances for movie project the Management explained that advances to parties could not be utilised or recovered as movie projects stuck up due to fund crisis. However management is confident that all advances will be recovered/ utilised in due course. But this statement was not supported by any convincing documentary evidence. |
|The company is having substantial amount of recoverable balance of from debtors and against advances from several parties which are pending since long. || |
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 Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor 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.
Management's Responsibility for the Standalone Financial Statements
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 standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the standalone financial statements management isresponsible 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 areresponsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 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 chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards. From thematters communicated with those charged with governance we determine those matters thatwere of most significance in the audit of the standalone 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.
Report on Other Legal and Regulatory Requirements
1. 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.
b) In our opinion proper books of account as required by law have been kept by theCompany so faras 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 standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
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 is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy 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 the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 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 standalone Ind AS financial statements. Refer note 28 to the standaloneInd AS financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For D. S. Shukla & Co.
(Firm Registration No. 000773C)
Delhi-NCR 30 May 2019
(A. K. Dwivedi)
Membership No. 078297
TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFSAHARA ONE MEDIA AND ENTERTAINMENT LIMITED (Referred to in paragraph 1 (f ) under 'Reporton Other Legal and Regulatory Requirements' of our report of even date)
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 SAHARA ONEMEDIA AND ENTERTAINMENT LIMITED ("the Company") as of 31st March 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.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 and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material 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 standalone Ind AS 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 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
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.
Subject to matters described in our Basis for qualified opinion and key audit mattersparagraph in our opinion to the best of our information and according to theexplanations given to us 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 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
For D. S. Shukla & Co.
(Firm Registration No. 000773C)
Delhi-NCR 30 May 2019
(A. K. Dwivedi)
Membership No. 078297
TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFSAHARA ONE MEDIA AND ENTERTAINMENT LIMITED
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our Report of even date)
i (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Fixed assets have not been physically verified by the management during the year.
(c) According to the information and explanations given to us and on the basis of ourexamination of records of the company the title deeds of immovable properties are held inthe name of the company.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us the Company has notgranted any secured or unsecured loan to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. (iv) In our opinion and according to the information and explanations given tous the company has not given any loan or guarantee and security. However company hascomplied with the provision of section 186 of the Act in respect to investments.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained the Central Government has notprescribed maintenance of cost records under sub-section (1) of section 148 of theCompanies Act 2013 for the products of the Company.
(vii) a) The Company has generally been regular in depositing undisputed statutorydues including Provident Fund Employees' State Insurance Income Tax Goods and ServiceTax Customs Duty Cess and other material statutory dues applicable to it with theappropriate authorities. However the following undisputed dues of Tax Deducted at sourceand professional tax is in arrears as at March 31 2019 for a period of more than sixmonths from the date they became payable.
|Name of the Statue ||Nature of Dues ||Amount (Rs.'000) |
|Income tax Department ||Tax deducted at source ||889.23 |
|State Professional Tax Department ||Professional Tax ||10.90 |
(b) According to the records of the Company the dues outstanding of income-taxcustoms duty and cess on account of any dispute are as follows:
|Name of the Statue ||Nature of Dues ||Amount (Rs.) ||Period to which the amount relates ||Forum where dispute is pending |
|Income tax Act 1961 ||Income tax ||341393.27 ||FY 2002-2003 & 2004-05 to 2011-12 ||Income Tax Appellate Tribunal |
|Income tax Act 1961 ||Tax deducted at source ||61254.85 ||A.Y 2006-2007& 2008-09 to2010-2011 ||High Court |
|Income-tax Act 1961 ||Tax Deducted at Source ||59432.39 ||A.Y. 2011-12 ||Income tax Appellate Tribunal |
|Income tax Act 1961 ||Income tax ||19885.02 ||F.Y.1999-2000 & 2000-2001 ||High Court |
|Customs Act 1962 ||Customs Duty ||445.00 ||2008-2009 ||Custom Appellate |
| || || || ||Authority |
(viii) The Company does not have any loan or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.
(ix) The company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and terms loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.
(x) According to information and explanations given to us by the management no fraudby the Company or on the company by its officers or employees has been noticed or reportedduring the course of our audit.
(xi) According to information and explanations given to us and based on our examinationof the records of the Company the Company has paid/provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V of the Act.
(xii) In our opinion and According to information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to information and explanations given to us and based on ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to information and explanations given to us and based on our examinationof the records of the Company the company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.
(xvi) The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For D. S. Shukla & Co.
(Firm Registration No. 000773C) Delhi-NCR 30 May 2019
(A. K. Dwivedi)
Membership No. 078297