We have audited the standalone financial statements of RADAAN MEDIAWORKS INDIA LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss, Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of material 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 explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, the losses, other comprehensive income, and changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. Disruption in Operations owing to COVID-19
We draw attention to Note No.3 of the Standalone Financial Statements, which discloses that the industry in which the Company operates is adversely affected owing to the impact of Covid-19. It is also not clear as to when the operations will regularize.
2. Material Uncertainty relating to Going Concern
We draw attention to Note No. 20 of the Statement. The Company’s net worth has fully eroded and its current liabilities have exceeded its current assets. In the current scenario, the Company is faced with liquidity crunch and has undisputed statutory dues to the tune of Rs.292.94 lakhs that are yet to be paid as at March 31, 2024. Due to non- payment of statutory liabilities, there may be potential non-compliance under relevant statutes and regulations. These events or conditions, along with other matters indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. However, the Company is confident of meeting its obligations in the normal course of its business and accordingly, the financial statements of the Company have been prepared on a going concern basis.
3. Investments
We draw attention to Note No.8 & 17 of the Statement relating to Company’s investments in its wholly owned subsidiary Radaan Media Ventures Pte Ltd amounting to Rs. 9.35 Lakhs as at March 31, 2024 and loans and advance to subsidiary amounting to Rs. 18.46 Lakhs. The investment in the subsidiary has not been tested for impairment as per IND AS 36.
4. Capital Work in Progress - Delay in completion of building under constructions
We refer to Note No.49(A) of the Statement regarding delay in completion of the building under construction. Total aggregate Capital Work-In-Progress of Rs.1844.22 Lakhs as at March 31, comprise of Land UDS consideration (including registration & Stamp duty and processing charges) of Rs.1061.96 Lakhs, stage wise construction payment of Rs. 264.82 Lakhs and interest on bank borrowing cost of Rs.517.44 Lakhs capitalized during construction period.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013, as amended (“the Act”). Our responsibilities under those Standards are further described in the “Auditor’s Responsibilities for the Audit of the Standalone Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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a) Assessment of Provisions for taxation, litigations and claims
As At March 31,2024, the Company has contingent liability to the tune of Rs.1097.83 lakhs. These were estimated using a significant degree of management judgment in interpreting the various relevant rules, regulations and practices and in considering precedents in various forums.
(Note 50 of the Notes to Accounts to the Financials)
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The following audit procedures were performed in this area, among others to obtain sufficient appropriate audit evidence:
1. Based on the procedures performed, it is concluded that the management’s assessment of the outcome of pending litigations and claims is appropriate.
2. Letters have been obtained from the Company regarding the likely outcome and magnitude of and exposure to the relevant litigation based on the previous orders passed by appropriate authorities in similar matters.
3. Previous judgments made by relevant tax Authorities and advice given by Company’s advisors on these matters were reviewed.
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b) Work In Progress Valuation
The closing balance of Work in Progress stands at Rs.1024.53 lakhs. This was identified as a Key Audit Matter as it is a significant portion of the Financial Statements.
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• Audit areas include the following but not restricted to:
• Evaluating the Design of Internal Controls relating to recording of costs incurred and estimation of further costs that are required for completion of the episodes
• Understanding the context of the Work in Progress in terms of Number of episodes that have been shot and yet to be aired. These numbers were justified by the Internal Production team.
• Selected episodes to be aired on a sample basis and tested the same for evaluating the costs involved therein.
• Obtaining a closing statement of episodes in hand as at March 31, 2024. Reviewed the same for any old unaired episodes that require impairment.
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C ) Investments in Subsidiary
The Company has an investment in an Overseas Subsidiary named ‘Radaan Media Ventures Pte. Ltd’ in Singapore amounting to Rs.9.35 lakhs or SGD 20,000. The subsidiary has not been in full-fledged commercial operation since financial year 2014 -15. The carrying value of this investment was questioned by Audit. Further Loans were given to the subsidiary carrying an interest rate of 10% which is overdue.
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The following audit procedures were performed in this area:
• Calling for the Financials Statements of March 31, 2024.
• Audit questioned the existence and valuation of the investment in view of no operations in the subsidiary for the past five years.
• Annual Performance reports and filings in relation to the foreign subsidiary were verified.
• Furthermore, the appropriateness of the disclosures made in Note 37 to the financial statements was assessed.
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d) Non-payment of Statutory Dues Payment
Audit observed that there were non- payments of statutory payment dues.
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• Audit Procedure checked the undisputed statutory payments dues remain unpaid.
• Management responded working capital as cause for nonpayment and affirmed the compliance once the present situation improves.
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e) Delay in Unsecured Loan Repayments
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• Audit Procedure checked the revised repayment terms with party negotiated.
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f) Revenue Recognition (IND AS 115)
Recognition of revenue is complex due to certain specific nature of customer contracts.
The application of the standard on recognition of revenue involves significant judgment and estimates made by the management which includes;
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• Audit procedure involved review of the Company’s IND AS 115 implementation process and key judgments made by management, evaluation of customer contracts in light of IND AS 115 on sample basis and comparison of the same with management’s evaluation and assessment of design and operating effectiveness of internal controls relating to
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• Identification of performance obligations contained in
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revenue recognition.
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contracts.
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• Based on the procedures performed, it is concluded that
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• Determination of the most appropriate
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management’s judgments with respect to recognition and
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method for recognition of revenue relating to the
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measurement of revenue in light of IND AS 115 is
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identified performance obligations.
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appropriate.
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• Assessment of transaction price and
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• Allocation of the assessed price to the individual performance obligations.
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Information Other than the Standalone Financial Statements and Auditors’ Report Thereon
The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s Annual Report, but does not include the standalone financial statements and our report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing 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 section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with the rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible 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 standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design 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 whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone 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’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (here in after referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure A” , a statement on the matters 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 best of our knowledge and belief were necessary for the purposes of our audit,
(b) [n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in paragraph (h) (vi) below and backup of the books of accounts and other books and papers of the Company maintained in electronic mode has not been taken on a daily basis.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement and statement of changes in the equity dealt with by this Report are in agreement with the books of accounts.
(d) [n our opinion, exceptfor the effects of the matter described in the Basis for Qualified Opinion section of our report above
the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act
(e) On the basis of the written representations received from the directors as on March 31,2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”
(g) With respect to the other matters to be included in the Auditors’ Report under section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 50 to the standalone financial statements)
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
(iv) (a) Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(is), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. (Refer Note.49(J) to the Standalone Financial Statements)
(b) Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note.49(J) to the Standalone Financial Statements), and
(c) Based on the audit procedures adopted by us, nothing has come to our notice that has caused us to believe that the representations made by the Management under sub clause (a) and (b) above, contain any material misstatement.
(v) The Company has not declared or paid any Dividend during the year.
(vi) Based on our examination which included test checks, the Company, in respect of financial year commencing on April 01, 2023, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility. However, the audit trail facility has not been enabled / operated throughout the year, hence we are unable to comment on the same.
As proviso to Rule 3 (1) of the Companies (Accounts) Rules, 2014 is applicable from April 01,2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rule, 2014 on preservation of audit trail as per statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
For SRSV & Associates Chartered Accountants F.R.No. 015041S
Place: Chennai Sd/-
Date: May 25, 2024
V. Rajeswaran Partner
Membership No. 020881 UDIN: 24020881BKDHQJ4695
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