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 (the "Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to ussubject to the matters referred to in the Basis for Qualified Opinion sectionof our report the aforesaid standalone financial statements give the information requiredby the 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 2020 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 financial statements regarding deposit ofRupees 694027.88 Thousand to Sahara-SEBI Refund account in the matter of dispute inrespect of repayment of Optionally Fully Convertible Debentures (OFCDs) by two groupcompanies namely M/s Sahara India Real Corporation Limited & Sahara HousingInvestment Corporation Limited with Security and Exchange Board of India (SEBI).TheHonourable Supreme Court of India vide its order dated 21-11-2013 had directed that SaharaGroup of Companies shall not part with movable and immovable properties and accordinglySEBI' has seized the company's Fixed Deposit and Non-Current Investment. Subsequentto this Hon'ble Supreme Court vide it's order dated 4th June 2014 has directed todefreeze the Fixed Deposit account of the company subject to condition that total proceedswould be transferred to special account opened by the SEBI'.
However the matter is pending at Honourable Supreme Court of India; we are unable tocomment on the consequential impact if any of the same on the financial statement of thecompany.
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 and revenue 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) Attention is invited to long pending content advances of Rupees 191600 Thousandgiven to producers/film houses/actors for acquisition/development Film content/rights.There is substantial delay in completion of the projects. Company's ability to materialisecontent advances into the film rights for exploitation is dependent on its funding thebalance commitment agreed under the contracts. In view of the above we are unable tocomment on the recoverability of content advance or its materialization into film rightsand its consequential impact on the financials for the period.
d) Attention is invited to the overdue trade receivables of Rupees 75074.28 Thousand(Net of Provisions). In view of significant delays in collections we are unable tocomment on the recoverability of this overdue trade receivable and its consequentialimpact on the financials for the period.
e) The bank balance confirmation of bank accounts having book balance of Rupees 3231.11Thousand as on 31-03-2020 could not be obtained as these accounts are in dormant status.Had balance confirmations been received there may have been additional adjustmentsrequired to the financial statement which are not determinable at this stage.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing ("SA"s) specified under section 143(10) of the Act. 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 theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us 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 285.70 Thousand up to Financial Year 2018-19 is lyingunpaid as on date. As per section 19 of the Payment of Bonus Act 1965 the payment ofbonus should be made within eight month from the close of the relevant financial yearotherwise company would be subjected to penalty under section 28 of the Payment of BonusAct 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 2020 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 || |
|The company is having substantial amount of recoverable balance of from debtors and against advances from several parties which are pending since long. ||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. |
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 managementReports but does not include the standalone financial statements and our auditor's reportthereon. But this report is expected to be made available to us after the date of thisauditor's report.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Management report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Management's Responsibilities 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 includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
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 in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 control 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 the 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 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 were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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 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 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 Flows 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.
e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 financial statements. Refer note 28 to the standalone financialstatements.
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.
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 Report on Other Legal and RegulatoryRequirements' 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 2020 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 control based on the internal control over financial reporting criteriaestablished by the company considering the essential components of the internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for insuring the orderly and efficientconduct of business including adherence to the Company's policies the safeguards of itsassets the prevention and detection of fraud and errors the accuracy and completeness ofaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Ind-AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls over Financial Reporting (the Guidance Note') and theStandard on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the ICAI. ThoseStandards and Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the internal financialcontrols over financial reporting with reference to these Ind-AS financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control over financial reporting with reference to these Ind-ASfinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and evaluating the design and operating effectiveness of internal control based onassessed risk. The procedures selected depend on the auditors' judgment including theassessment of the risk of material misstatement of the financial statements whether dueto 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 financial controls over financialreporting with reference to these Ind-AS financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Reporting and the preparation of financial statement for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting with reference to these Ind-AS financial statementsincludes those policies and procedures that:
a) Pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and depositions of the assets of the company;
b) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and the receipts and expenditures of the company are being made only inaccordance with the authorization of the management and directors of the company; and c)Provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financialreporting with reference to these Ind-AS financial statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over internal financial reporting with reference to theseInd-AS financial statements to future periods are subject to the risk that the internalfinancial control over financial reporting with reference to these Ind-AS financialstatements may become inadequate because of changes in conditions or that of degree ofcompliance 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 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
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 RegulatoryRequirements' 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 to us thecompany has not given any loan or guarantee and security. However company has compliedwith 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 source and professional taxis in arrears as at March 31 2020 for a period of more than six months from the date theybecame payable.
|Name of the Statue ||Nature of Dues ||Amount (Rs.'000) |
|Income tax Department ||Tax deducted at source ||871.53 |
|State Professional Tax Department ||Professional Tax ||18.90 |
(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.000) ||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 to 2010-2011 ||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 |
|Income tax Act 1961 ||Income tax ||255908.03 ||FY 2002-2003 & 2004-05 to 2011-12 ||CIT (Appeal) |
(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. |
| ||Chartered Accountants |
| ||(Firm Registration No. 000773C) |
|Lucknow 30July 2020 || |
| ||(A. K. Dwivedi) |
| ||Partner |
| ||Membership No. 078297 |
| ||UDIN:20078297AAAABD1786 |