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Shyam Telecom Ltd.

BSE: 517411 Sector: Telecom
NSE: SHYAMTEL ISIN Code: INE635A01023
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OPEN 11.23
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OPEN 11.23
CLOSE 11.23
VOLUME 669
52-Week high 17.95
52-Week low 8.63
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shyam Telecom Ltd. (SHYAMTEL) - Auditors Report

Company auditors report

To the Members of

SHYAM TELECOM LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the Standalone financial statements of SHYAM TELECOM LIMITED ("theCompany") which comprise the balance sheet as at March 31 st 2021 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 st 2021 and its loss changes in equity and its cash flows forthe 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to the statement of profit and loss which indicates that the Companyincurred a net loss of Rs. 47.06 lakhs during the year ended March 31 st 2021 and as ofthat date; the Company's current liabilities exceeded its total assets by Rs.1464.82lakhs. Also the net worth of the company has fully eroded. These events orconditions indicate that a material uncertainty exists that may cast significant doubt onthe Company's ability to continue as a going concern. However the financial statements ofthe company have been prepared on a going concern basis as declared by management in Noteno. 39. Our opinion is not modified in respect of this matter.

Emphasis of Matter

The company had applied for voluntary delisting of equity shares from BSE Limited("BSE") and National stock exchange of India limited ("NSE"). Thedelisting offer opened on January 07 th 2021 and closed on January 13th 2021 .Due tominimum number of equity shares for successful delisting was not tendered in Delistingoffer hence the offer is deemed to have failed in terms of Regulation 19(1) ofSEBI(Delisting of Equity Shares) Regulations2009.

Our opinion is not modified in respect of this matter.

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 period. 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. Inaddition to the matter described in the Material Uncertainty Related to Going Concernsection we have determined the matters described below to be the key audit matters to becommunicated in our report.

Key Audit Matter How our audit Addressed the Key Audit Matter
1. Uncertain Taxation Matters: Principle Audit Procedure:
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. We have obtained details of completed tax assessments and demands up to March 31 st 2021from management.
Refer Note no. 29 to the Financial Statements. We assessed the management's underlying assumptions in estimating the tax provisions and the possible outcome of the disputes. We also considered legal precedence and other rulings including in the company's on cases in evaluating management's position on these uncertain tax positions.
2. Provisions and contingent liabilities: Principle Audit Procedure:
There are a number of legal regulatory and tax cases against the Company. We analyzed the current status of the tax cases.
High level of judgment is required in estimating the level of provisioning required. Refer to note no. 29 of Financial statements For legal regulatory and tax matters our procedures included the following:
• Testing key controls over litigation regulatory and tax procedures;
• Performing substantive procedures on the underlying calculations supporting the provisions recorded;
• Where relevant reading external legal opinions obtained by management;
• Meeting with regional and local management and reading relevant correspondence;
• Discussing open matters with the Company litigation regulatory general counsel and tax teams;
• Assessing management's conclusions through understanding precedents set in similar cases; and
Based on the evidence obtained and the related disclosures in note no. 29 of the financial statements conclude that the disclosure was sufficient.
3. Amount recoverable from / payables to foreign parties pending for settlements due to non receipts of approvals: Principle Audit Procedure:
There are a number of cases where amount recoverable from / payable to foreign parties are pending for settlements due to non- receipt of necessary approvals from Reserve Bank of India. High level of judgment is required in estimating the possible outcome of these cases. We analyzed the following areas with respect to pending foreign balances:
Refer to note no. 32 of Financial statements. • In case of amount recoverable calculation of foreign exchanges fluctuation gain/loss with the prevailing rate;
• Performing substantive procedures on the underlying calculations supporting the provisions recorded with respect to foreign debtors
• Where relevant reading external legal opinions obtained by management;
• Obtaining relevant correspondence filed with regulatory and statutory authorities for necessary approvals with regard to outstanding balances;
• Discussion with the management about the recoverability from debtors and paying of the creditors in near future;
Based on the evidence obtained and the related disclosures in note no. 32 of the financial statements conclude that the disclosure was sufficient.

Other Matters

Following are the details of amounts pending to be received/paid to the foreign partiesby the company due to pending approvals from Reserve Bank of India and other statutoryauthorities:

a) An amount of Rs. 38.02 Cr. being advances from customers classified under the head"Other Current Liabilities" are in process of being settled for a long time.

b) An amount of Rs. 2.26 Cr. being Sundry Creditors classified under the head"Trade Payables' are in process of being settled for a long time.

c) An amount of Rs. 6.40 Cr being Sundry Debtors Classified under "TradeReceivables- Doubtful" is being followed up by company for recovery. The company hadalready made a provision of Rs. 6.40 Cr against such doubtful debts in previous years.

d) An amount of Rs. 0.23 Cr being Advance to Supplier Classified under "OtherCurrent assets Doubtful" are being followed up by company for recovery. The companyhad already made a provision of Rs. 0.23 Cr against such doubtful debts in previous years.

e) An amount of Rs. 24.95 Cr being Loan to Subsidiary Classified under "Loans-Doubtful'. The company had already made a provision of Rs. 24.95 Cr against such doubtfuladvances in previous years.

All the above-mentioned amounts are long overdue and Company is following up withReserve Bank of India and other statutory authorities for necessary approvals.

Our opinion is not qualified in respect of above matter.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's annual report but doesnot include the financial statements and our auditor's report thereon. These reports areexpected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and wewill 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.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. 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 design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 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.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order')issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure — A"; a statement on thematters specified in paragraphs 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 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 theCompanyso far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind-AS) specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31 stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2021 from being appointed as a director in terms ofSection 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure -B".

(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 explanations given to us the remuneration paid bythe Company to its directors during the year is in accordance with the provisions ofSection 197 of the Act. The remuneration paid to any director is not in excess of thelimit laid down under section 197 of the Act. The Ministry of Corporate Affairs has notprescribed other details under section 197(16) which are required to be commented upon byus.

(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 in our opinionand to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations as at 31 st March 2021in its financial position in its financial statements — Refer Note 29 to thefinancial 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 which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

ANNEXURE – "A" TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

i.a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

b) The fixed assets covering significant value have been physically verified by themanagement during the year which in our opinion is reasonable having regard to the sizeof the Company and the nature of its business. On the basis of the information andexplanations given by the management no material discrepancies have been noticed on suchverification

c) The title deeds of immovable properties are held in the name of the company

ii. a) the inventory of the Company in its possession has been physically verified bythe management at reasonable intervals. In our opinion the frequency of verification isreasonable.

b) The procedure of physical verification of inventories followed by the management isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) The Company has generally maintained proper records of inventory. The discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial and these have been properly dealt with in the books of account.

iii. According to information and explanation given to us the Company has grantedunsecured loans to its Subsidiary Company namely Shyam Telecom Inc. USA covered in theregister maintained under section 189 of the Act in earlier years. The said Subsidiarycompany was dissolved in Dec2015 and Company made provision of said advances in earlieryears and has filed papers with RBI for same and it is disclosed in Note no 31 of thefinancial statements.

iv. In our opinion and according to information and explanations given to us thecompany has not given any loan made any investment given any guarantee or provided andsecurities covered under section 185 .The company has complied with the provision ofsection 186 of the Companies Act.

v. In our opinion and according to information and explanation given to us the Companyhas not accepted any deposits covered under section 73 or any other provisions of theCompanies Act 2013.

vi. As per information and explanations given to us the company is not required tomaintain cost records as prescribed under the Companies Act 2013. Accordingly theprovisions of the paragraph 3(vi) of the order are not applicable to the Company.

vii. a) According to records of the Company undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Goods & Service Tax SalesTax Service Tax Wealth Tax Duty of Customs Duty of Excise Value Added Tax Cess andother statutory dues have been generally regularly deposited with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at March 31 2021 fora period more than six months from the date of becoming payable.

b) According to the information and explanations given to us there were no dues inrespect of Income Tax Duty of Excise Duty of Customs Cess Sales Tax Service TaxGoods and Services Tax Value Added Tax and Wealth Tax which have not been deposited onaccount of any dispute except the following:

Name of the Statue Nature of the dues Period to which the amount pertains Amount (Net of Paid) Rs. In Lakhs Forum where dispute is pending
Income Tax Act1961 Income Tax A.Y. 2011-12 74.41 Income Tax Appellate Tribunal
Income Tax Act1961 Income Tax A.Y.2012-13 93.51 Income Tax Appellate Tribunal
Income Tax Act1961 Income Tax A.Y.2013-14 110.37 Income Tax Appellate Tribunal
Income Tax Act1961 Income Tax A.Y. 2014-15 94.28 Income Tax Appellate Tribunal
F.Y. 2012-13 4.89
Uttarakhand Value Added Tax Act 2005 F.Y. 2013-14 14.25 Jt. Commissioner Commercial
VAT F.Y. 2014-15 21.29 Tax Appeals Dehradun
F.Y. 2015-16 19.32
F.Y. 2016-17 4.19
Kerala Value Added Tax Act 2003 VAT F.Y. 2012-13 20.57 Maharashtra Sales Tax Tribunal Mumbai

viii. The Company has not issued any debentures and has not borrowed any fund fromfinancial institutions. The company has not defaulted in repayment of dues to the bank.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer including debt instruments and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.

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

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

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 details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give 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. Based upon the audit procedures performed and the information and explanationsgiven by the management during the year under review the company has not entered into anynon-cash transactions with directors or persons connected to them and hence provisions ofSection 192 of the Companies Act 2013 are not applicable to the Company.

xvi. The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For VGM & Co.
Chartered Accountants
Firm Registration No.: 029823N
Sd/-
Krishan Gautam
Partner
Membership No.: 539365
U.D.I.N : 21539365AAAAAD4482
Place: New Delhi
Date: June 29th 2021

Annexure –"B" to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ShyamTelecom Limited ("the Company") as of March 31 st 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 Companies Act 2013.

Auditors' Responsibility

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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 judgment including the assessment of the risks of materialmisstatement 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 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 financial reporting includes those policiesand procedures that:

1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.

Opinion

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 31 st March 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 ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For VGM & Co.
Chartered Accountants
Firm Registration No.: 029823N
Sd/-
Krishan Gautam
Partner
Membership No.: 539365
UDIN : 21539365AAAAAB4482
Place: New Delhi
Date: June 29th 2021

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