We have audited the financial statements of SHYAM TELECOM LIMITED (“the Company”), which comprise the balance
sheet as at 31st March, 2024, and the statement of Profit and Loss, statement of changes in equity and statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and
other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial
statements give the information required by the Companies Act, 2013 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
31st March, 2024, and its loss, changes in equity and its cash flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of
the 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 Companies Act, 2013 and the Rules there under, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Material Uncertainty Related to Going Concern
We draw attention to the statement of profit and loss, which indicates that the Company incurred a net loss of Rs. 312.55 lakhs
during the year ended 31st March, 2024 ( LY- Rs. 487.11 lakhs) and, as of that date the Company’s current liabilities exceeded
its total assets by Rs 2612.03 lakhs( LY- Rs. 2292.03 lakhs). Also the net worth of the company has fully eroded. These events
or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue
as a going concern. However, the financial statements of the company have been prepared on a going concern basis for the
reason declared by management in Note no. 34.
Our opinion is not modified in respect of this matter.
4. Key Audit Matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the
matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described
below to be the key audit matters to be communicated in our report.
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Sr. No. Key Audit Matter
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How our audit Addressed the Key Audit Matter
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1. Uncertain Taxation Matters:
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Principal Audit Procedure:
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The Company has material uncertainty relating
to tax positions including matters under dispute
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We have obtained details of completed tax assessments and
demands up to 31st March, 2024 from management.
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which involves significant judgment to determine
the possible outcome of these disputes.
(Refer Note no. 24 to the Financial Statements.)
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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.
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2.
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Provisions and contingent liabilities:
There are a number of legal, regulatory and tax
cases against the Company.
High level of judgement is required in estimating
the level of provisioning required. Refer to note
no. 24, 25, & 26 of Financial statements.
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Principal Audit Procedure:
We analyzed the current status of the tax cases.
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 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 relate disclosures in
note no. 24, 25 & 26 of the financial statements, we conclude
that the disclosure was sufficient.
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3.
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Amount recoverable from/payables to
foreign parties pending for settlements due
to non-receipts of approvals from Reserve
Bank of India or Statutory Authorities:
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.
Refer to note no. 25 & 26 of Financial statements.
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Principal Audit Procedure
We analyzed the following areas with respect to pending
foreign balances:
• 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 off the creditors in near future;
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Based on the evidence obtained, and the related disclosures
in note no. 26 & 27 of the financial statements, conclude that
the disclosure was sufficient.
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5. Other Matters
Following are the details of amounts pending to be received/paid to the foreign parties by the Company due to pending
approvals from Reserve Bank of India or other Statutory Authorities:
a) An amount of Rs. 42.82 Cr (L.Y. Rs. 42.82 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 (L.Y. 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. 28.10 Cr (L.Y. Rs. 28.10 Crore, Dr.) being Loan to Subsidiary Classified under “Loans-Doubtful’.
The company had already made a provision of Rs. 28.10 Cr (L.Y. Rs. 28.10 Crore) (Rs. 27.89 crore 0.21 crore)
against such doubtful advances in previous years.
All the above-mentioned amounts are long overdue and Company is following up with statutory authorities for necessary
approvals.
Our opinion is not qualified in respect of above matter.
6. Other Information in documents containing Audited Financial Statements:
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 or management report and Chairman’s Statements,
but does not include the consolidated financial statements and our auditor’s report thereon. These reports are expected 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 we will not express any form of assurance
conclusion thereon. SA720 “Auditor’s Responsibilities relating to Other Information” requires it in connection with our audit
of the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
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.
7. Management’s and Board of Directors’ Responsibilities for the Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial
position, financial performance, changes in equity 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. 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 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 financial statement
that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management and Board of Directors are 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 the Board of Directors 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.
8. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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
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 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 at the end of the year .
• 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 continues as 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 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 going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Assess the Materiality in financial statements.
a) Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably knowledgeable users of the 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 financial
statements.
b) 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.
c) 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.
9. Report on Other Legal and Regulatory Requirements
• 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 Companies Act, 2013, we give in the “Annexure A”; a
statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
10. 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) In 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.
(c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Changes in Equity, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards (Ind-AS) specified
under Section 133 of the Act, read with the Companies (Indian Accounting standards ) Rules, 2015.
(e) In our opinion there is no observation or comment to be made by us on financial transactions or matters which have
any adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the Directors as on 31st March, 2024 taken on record by
the Board of Directors, none of the Directors is disqualified as on that date from being appointed as a Director in
terms of Section 164(2) of the Act.
(g) In our opinion, we do not find any qualification, reservation or adverse remark to be made by us relating to the
maintenance of accounts and other matters connected therewith.
(h) With respect to the adequacy of the internal financial controls with reference to financial statement of the Company
and the operating effectiveness of such controls, refer to our separate Report in “Annexure -B”.
(i) 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:
(a) The Company has disclosed the impact of pending litigations as at 31st March 2024 in its financial position in its
financial statements -Refer Note 24 to the financial statements;
(b) The Company has made provision as required under the applicable law or accounting standards for material
foreseeable losses, if any, on long term contracts including derivative contracts.
(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by
the Company.
(d) (i) Whether the management has represented that, to the best of its knowledge and belief, 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(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
(“Ultimate Beneficiaries”) by or on behalf of the Company or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;
It has been so represented by the management that no such funds have been advanced, loaned or invested
and no such guarantee security or the like has been provided
(ii) Whether the management has represented that, to the best of its knowledge and belief, 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:
• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
(“Ultimate Beneficiaries”) by or on behalf of the Funding Party or
• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and
It has been so represented by the management that no such funds have been received and no such guarantee
security or the like has been provided
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has
come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii)
contain any material mis-statement.
(e) No dividend declared or paid during the year by the Company.
(f) Whether the Company has used such accounting software for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions
recorded in the software and the audit trail feature has not been tampered with and the audit trail has been preserved
by the Company as per the statutory requirements for record retention.”
Based on our examination carried out in accordance with the Implementation Guidance on Reporting on Audit
Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 Edition) issued by
ICAI, which includes test checks, we report that , except the instances mentioned below, the company has used
an accounting software for maintaining its books of account which has a feature of recording audit trail facility.
Further, during the course of our audit we did not come across any instance of audit trail feature being tampered
with. Our examination of the audit trail was in the context of an audit of financial statements carried out in
accordance with the Standard of Auditing and only to the extent required by Rule 11(g) of the said rules. We have
not carried out any audit or examination of the audit trail beyond the matters required by the aforesaid Rule 11(g)
nor have we carried out any standalone audit or examination of the audit trail.”
(g) With respect to the matters to be included in the Auditor’s Report under Section 197(16) of the Act:
In our opinion and to the best of our information and 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 and is not in excess of
the limit laid down under the said section.
For Padam Dinesh & Co.
Chartered Accountants
Firm Regn.No.: 009061N
Sd/-
CA Rakesh Aggarwal
Partner
M. No.: 084226
UDIN: 24084226BKBUGV1905
Date: 10th May, 2024
Place: New Delhi
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