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Saregama India Ltd.

BSE: 532163 Sector: Media
NSE: SAREGAMA ISIN Code: INE979A01017
BSE 00:00 | 03 Dec 4414.25 45.30
(1.04%)
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NSE 00:00 | 03 Dec 4422.05 84.05
(1.94%)
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OPEN 4311.05
PREVIOUS CLOSE 4368.95
VOLUME 965
52-Week high 4839.70
52-Week low 687.30
P/E 68.77
Mkt Cap.(Rs cr) 8,511
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4311.05
CLOSE 4368.95
VOLUME 965
52-Week high 4839.70
52-Week low 687.30
P/E 68.77
Mkt Cap.(Rs cr) 8,511
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Saregama India Ltd. (SAREGAMA) - Auditors Report

Company auditors report

To the Members of Saregama India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Saregama India Limited("the Company") which comprise the standalone balance sheet as at 31 March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditors' Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

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. Description of Key Audit Matter Revenue Recognition

See note 21 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company derives its revenues from the sale of contractually manufactured products; licensing of music rights and income from films and television serials including free commercial time. Our audit procedures include the following:
• We have evaluated the terms of significant contracts pertaining to revenue from licence fees to identify the performance obligations under these contracts;
The recognition of revenue from licence fees has been considered to be critical since the Company has entered into multiple complex contracts with its customers. The revenue gets recognised based on the logs/ information as received from such customers. • We have considered the revenue recognition policies of the Company in respect of those contracts and assessing the consistent application of these policies in light of the requirements of relevant accounting standards;
• We have tested the effectiveness of relevant controls over revenue from licence fees; and
The complexity of these contractual terms also requires the Company to make judgments in assessing whether it has fulfilled its obligations under the contracts before recognizing the revenue. • We have selected sample transactions and performed substantive procedures with regard to revenue from licence fees by agreeing to third party information logs received from the customers and other relevant information.
We tested the transactions closer to the year end to check the recognition of revenue in the correct period.
Our testing as described above showed that revenue has been recorded in accordance with the terms of underlying contracts and accounting policy.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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 standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard. Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows 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. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

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

Auditors' 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 auditors' 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 skepticism 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 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 with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors' use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors' report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue 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.

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 auditors' 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 the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (1l) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) As required by Section 143(3) of the Act 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks 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 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 38 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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; and

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act read with Schedule V of the Act. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act read with Schedule V of the Act. The Ministry of Corporate Affairs has notprescribed other details under Section 197(16) which are required to be commented upon byus.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Jayanta Mukhopadhyay
Partner
Place: Kolkata Membership No.: 055757
Date: 05 June 2020 UDIN: 20055757AAAABC5731

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Annexure A to the Independent Auditors' report on the standalone financial statementsof Saregama India Limited for the year ended 31 March 2020

(Referred to in paragraph (1) 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) The Company has a regular programme of physical verification of its fixed assets bywhich all the fixed assets are verified in a phased manner over a period of three years.In accordance with this programme a portion of the fixed assets has been physicallyverified by the management during the year. In our opinion the frequency of such physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. As informed to us no material discrepancies were noticed on such verificationcarried out during the year.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) According to the information and explanations given to us the inventory exceptgoods in transit and stocks lying with third parties have been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency ofsuch verification is reasonable. For goods in transit as at year end subsequent receiptsof goods have been verified. For stocks lying with third parties as at the year endwritten confirmations have been obtained. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us the Company has notgranted any loans to Companies Firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Act. However the Company hasgranted loans to one of its wholly owned subsidiaries which has been fully provided foralong with its interest.

(iv) According to the information and explanations given to us the Company has notgiven any loans guarantees or securities during the year that would attract provisions ofsection 185 of the Act. In our opinion and accordingly to the information and explanationsgiven to us the provisions of Section 186 of the Act in respect to investments made hasbeen complied with by the Company.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public as per the directives issued by the Reserve Bank ofIndia and the provisions of section 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly the provisions of paragraph 3(v) of theOrder are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records undersection 148(1) of the Act in respect of the products manufactured by the Company and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the records with a view todetermine whether they are accurate or complete. The Company is not required to maintaincost records under Section 148(1) in respect of services rendered by them.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance goods and services tax duty of customs cess income tax and any othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities. As explained to us by the management theCompany did not have any dues on account of sales tax service tax duty of excise andvalue added tax.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance goods and services taxduty of customs cess income tax and any other material statutory dues were in arrears asat 31 March 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax goods and services tax sales tax value added tax and duty of customs whichhave not been deposited with the appropriate authorities on account of any dispute exceptas mentioned below:

Name of the Statute Nature of the dues Amount (Rs. in Lakhs)* Period to which the Amount relates Forum where the dispute is pending
Central Sales Tax Act 1956 Sales Tax 1.62 2005-06 2006-07 Joint Commissioner
Central Sales Tax Act 1956 Sales Tax 1.48 1990-91 2017-18 Deputy Commissioner
Central Sales Tax Act 1956 Sales Tax 68.36 1999-00 Additional Commissioner
Central Sales Tax Act 1956 Sales Tax 2.43 1998-99 2008-09 Assistant Commissioner of Commercial/sales taxes
West Bengal Sales Tax Act 1994 Sales Tax 146.30 1989-90 1994-95 2000-01 2011-12 Deputy Commissioner
Maharashtra Value Added Tax 2002 Value Added Tax 0.46 2011-12 Deputy Commissioner
Delhi Sales Tax Act 1975 Sales Tax 1.55 1991-92 Deputy Commissioner of Commercial Taxes
Name of the Statute Nature of the dues Amount (Rs. in Lakhs)* Period to which the Amount relates Forum where the dispute is pending
Tamil Nadu General Sales Tax Act 1959 Sales Tax 6.75 1986-87 to 1991-92 Tamil Nadu Taxation Special Tribunal
Andhra Pradesh General Sales Tax Act 1957 Sales Tax 3.28 2004-05 Deputy Commissioner
Kerala General Sales Tax Act 1963 Sales Tax 0.35 2002-03 Deputy Commissioner of Commercial Taxes
Uttar Pradesh Trade Tax Act 1948 Sales Tax 2.01 2005-06 200607 Joint Commissioner
Uttar Pradesh VAT Act 2008 Sales Tax 3.46 2013-14 Additional Commissioner Grade II(Appeal)
Central Sales Tax Act 1956 Sales Tax 1.40 2013-14 Additional Commissioner Grade II(Appeal)
Customs Act 1962 Custom 52.02 2003-04 to 2007-08 Commissioner of Customs
Income Tax Act 1961 Income tax 656.96 2012- 13 2013- 14 Commissioner of Income tax Appeals

Amounts are net of Rs. 226.51 Lakhs which has been deposited under protest by theCompany.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to the bank. The Companydid not have any outstanding loan or borrowings from financial institution or governmentor debenture holders during the year.

(ix) According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly the provisions of paragraph3(ix) of the Order are not applicable to the Company.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 of theAct read with Schedule V to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly the provisions of paragraph 3(xii) of the Order are notapplicable to the Company.

(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 incompliance with sections 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the standalone financial statements as required byapplicable accounting standards.

(xiv) According to the 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. Accordingly the provisions of paragraph 3(xiv) of the Order are not applicableto the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them as per section 192 of the Act.Accordingly the provisions of paragraph 3(xv) of the Order are not applicable to theCompany.

(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 I ndia Act 1934.Accordingly the provisions of paragraph 3(xvi) of the Order are not applicable to theCompany.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Jayanta Mukhopadhyay
Partner
Place: Kolkata Membership No.: 055757
Date: 05 June 2020 UDIN: 20055757AAAABC5731

Annexure B to the Independent Auditors' report on the standalone financial statementsof Saregama India Limited for the year ended 31 March 2020

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Subsection 3 of Section 143 of the Act

(Referred to in paragraph (1(A)(f)) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date) Opinion

We have audited the internal financial controls with reference to financial statementsof Saregama India Limited ("the Company") as of 31 March 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 withreference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Jayanta Mukhopadhyay
Partner
Place: Kolkata Membership No.: 055757
Date: 05 June 2020 UDIN: 20055757AAAABC5731

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