To The Members of Sun TV Network Limited
Report on the Audit of the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Sun TV NetworkLimited ("the Holding Company") and its subsidiary Kal Radio Limited (HoldingCompany and its subsidiary together referred to as "the Group") and the Group'sshare of profit in South Asia FM Limited (the company its joint ventures and itsassociates) the joint venture which comprise the Consolidated Balance Sheet as at March31 2019 and the Consolidated Statement of Profit including Other Comprehensive Incomethe Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equityfor the year then ended and a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the other auditors on separatefinancial statements of the subsidiary and joint venture referred to in the Other Matterssection below the aforesaid consolidated financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended (Ind AS') and other accounting principles generally accepted inIndia of the consolidated state of affairs of the Group as at March 31 2019 and theirconsolidated profit their consolidated total comprehensive income their consolidatedcash flows and their consolidated changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated financial statements in accordance with theStandards on Auditing specified under section 143 (10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Consolidated Financial Statements section of ourreport. We are independent of the Group in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the consolidated financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us and the audit evidence obtainedby the other auditors in terms of their reports referred to in the Other Matters sectionbelow is sufficient and appropriate to provide a basis for our audit opinion on theconsolidated financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated 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 Matter is respect of the holding company || |
|Recoverability of Receivables ||Principal audit procedures performed: |
|The Company recognizes impairment loss allowance based on lifetime expected credit losses at each reporting date right from its initial recognition. ||We have performed the following procedures: |
|Measurement of loss allowances involves assessment of credit risk expected cash flows and the timing of such cash flows consideration of reasonable and supportable information. ||Evaluated the design and implementation of the controls in respect of completeness and accuracy of the data considered in the assessment of loss allowance. |
|Refer accounting policy in Note 2(t) and provision for loss allowance in Note no. 26. ||We have performed necessary audit procedures to assess the reasonableness of assumptions used by the management taking into consideration the confirmation of balances obtained and subsequent collections made. |
|A significant degree of judgement is required in determining the amount of loss allowance based on expected credit loss model. || |
Information Other than the Financial Statements and Auditor's Report Thereon
The Holding Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report but does notinclude the consolidated financial statements standalone financial statements and ourauditor's report thereon.
Our opinion on the consolidated financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements ourresponsibility is to read the other information compare with the financial statements ofthe subsidiary and the joint venture audited by the other auditors to the extent itrelates to these entities and in doing so place reliance on the work of the otherauditors and consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. Other information so far as it relates tothe subsidiary and the joint venture is traced from their financial statements audited bythe other auditors.
Based on the work we have performed we conclude that we have nothing to report in thisregard.
Management's Responsibility for the Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for the matters stated insection 134(5) of the Act with respect to the preparation of these consolidated financialstatements that give a true and fair view of the consolidated financial positionconsolidated financial performance including other comprehensive income consolidated cashflows and consolidated changes in equity of the Group including joint venture inaccordance with the Ind AS and other accounting principles generally accepted in India.
The respective Board of Directors of the Companies included in the Group and of itsjoint venture are responsible for maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Group and its jointventure and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error which have been used for the purpose ofpreparation of the consolidated financial statements by the Directors of the HoldingCompany as aforesaid.
In preparing the consolidated financial statements the respective Board of Directorsof the companies included in the Group and of its joint venture are responsible forassessing the ability of the Group and of joint venture to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the management either intends to liquidate or cease operationsor has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and of itsjoint venture are also responsible
for overseeing the financial reporting process of the Group and of its joint venture.
Auditor's Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidatedfinancial 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 consolidated 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 consolidated 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 financial 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 HoldingCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Group and its joint venture to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the consolidated financial statements or if such disclosuresare inadequate to modify our opinion.
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 Group and itsassociates and jointly controlled entities/ joint ventures to cease to continue as a goingconcern.
Evaluate the overall presentation structure and content of the consolidated financialstatements including the disclosures and whether the consolidated financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group and its joint venture to express anopinion on the consolidated financial statements. We are responsible for the directionsupervision and performance of the audit of the financial statements of such entities orincluded in the consolidated financial statements of which we are the independentauditors. For the entities included in the consolidated financial statements which havebeen audited by the other auditors such other auditors remain responsible for thedirection supervision and performance of the audits carried out by them. We remain solelyresponsible for our audit opinion.
Materiality is the magnitude of misstatements in the consolidated financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the consolidated financial statements may be influenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the consolidated financial statements.
We communicate with those charged with governance of the Holding Company regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring 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.
We did not audit the financial statements of the subsidiary whose financial statementsreflect total assets of Rs. 391.57 Crores as at March 31 2019 total revenues of Rs.127.20 Crores and net cash outflows amounting to Rs. 1.09 Crores for the year ended onthat date as considered in the consolidated financial statements. The consolidatedfinancial statements also include the Group's share of net profit (total comprehensiveincome) of Rs. 15.25 Crores for the year ended March 31 2019 as considered in theconsolidated financial statements in respect of the joint venture whose financialstatements have not been audited by us. These financial statements have been audited byother auditors whose reports have been furnished to us by the Management and our opinionon the consolidated financial statements in so far as it relates to the amounts anddisclosures included in respect of the subsidiary and the joint venture and our report interms of sub-section (3) of Section 143 of the Act in so far as it relates to theaforesaid subsidiary and joint venture is based solely on the reports of the otherauditors.
Our opinion on the consolidated financial statements above and our report on OtherLegal and Regulatory Requirements below is not modified in respect of the above matterswith respect to our reliance on the work done and the reports of the other auditors.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit and on theconsideration of the reports of the other auditors on the separate financial statements ofthe subsidiary and joint venture referred to in the Other Matters section above we reportto the extent applicable 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 of the aforesaidconsolidated financial statements.
b) In our opinion proper books of account as required by law relating to preparationof the aforesaid consolidated financial statements have been kept so far as it appearsfrom our examination of those books and the reports of the other auditors.
c) The Consolidated Balance Sheet the Consolidated Statement of Profit and Lossincluding Other Comprehensive Income the Consolidated Cash Flow Statement and theConsolidated Statement of Changes in Equity dealt with by this Report are in agreementwith the relevant books of account maintained for the purpose of preparation of theconsolidated financial statements.
d) In our opinion the aforesaid consolidated financial statements comply with the IndAS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors of theHolding Company as on March 31 2019 taken on record by the Board of Directors of theCompany and the reports of the statutory auditors of its subsidiary company and jointventure company incorporated in India none of the directors of the Group companies andits joint venture company incorporated in India are disqualified as on March 31 2019 frombeing 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 financialreporting and the operating effectiveness of such controls refer to our separate Reportin "Annexure A" which is based on the auditors' reports of the Holding companysubsidiary company and joint venture company incorporated in India. Our report expressesan unmodified opinion on the adequacy and operating effectiveness of internal financialcontrols over financial reporting of those companies.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Holding Company to its directors during the year is in accordancewith 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 2014as amended inour opinion and to the best of our information and according to the explanations given tous:
i) The consolidated financial statements disclose the impact of pending litigations onthe consolidated financial position of the Group and joint venture.
ii) The Group and the joint venture did not have any material foreseeable losses onlong-term contracts including derivative contracts.
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Holding Company its subsidiary companyand the joint venture company incorporated in India.
| ||For Deloitte Haskins & Sells LLP |
| ||Chartered Accountants |
| ||(Firm Registration No. 117366W/W-100018) |
|Chennai ||Ananthi Amarnath |
|May 23 2019 ||Partner |
| ||(Membership No.209252) |