1. We have audited the accompanying standalone financial statements of S Chand And Company Limited ('the Company'), which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.
2. I n our opinion and to the best of our information and according to the explanations given to us, 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 Indian Accounting Standards ('Ind AS') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of 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 ('ICAI') 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 we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
4. We draw attention to note 60 to the accompanying standalone financial statements which describes that these standalone financial statements have been prepared after giving effect of the Composite Scheme of Arrangement (the 'Scheme'), entered into between the Company and Blackie & Son (Calcutta) Private Limited ("Blackie"), Nirja Publishers & Printers Private Limited ("Nirja"), DS Digital Private Limited ("DS Digital") and Safari Digital Education Initiatives Private Limited ("Safari Digital"), subsidiaries of the Company, with effect from the appointed date of the Scheme, being 1 April 2017, as approved by the order of National Company Law Tribunal, New Delhi on 24 July 2023 and which is effective from 04 September 2023. The impact of the aforesaid Scheme has been given effect to in the accompanying standalone financial statements as prescribed in the Scheme. Our opinion is not modified in respect of this matter.
Key Audit Matters
5. 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
6. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key audit matter
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How our audit addressed the key audit matter
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a) Assessment of the readability of investments
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made
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in
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Our audit procedures included, but were not limited to, the following
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subsidiaries:
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procedures:
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Refer material accounting policy information in note
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2.9 to
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the
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a)
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Obtained an understanding from the management with
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standalone financial statements.
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respect to process and controls followed by the Company
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The Company carries its investments in subsidiaries, at
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cost at
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an
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for identification of impairment indicators to determine
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aggregate amount of INR 6,066.73 million as at 31 March 2024.
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recoverability of the investments in subsidiary companies.
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b)
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Tested the design and operating effectiveness of internal controls of the Company in relation to the aforesaid process.
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Key audit matter
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How our audit addressed the key audit matter
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The amount is significant to the standalone financial statements and
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c)
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Obtained the valuation model from the management and
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involves determination whether impairment indicators exist during
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reviewed their conclusions, including reading the report
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the reporting period, corresponding impairment charge required to
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provided by an independent valuation expert for investments
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be accounted as per the requirements in Ind AS 36, Impairment of
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engaged by the management.
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Assets which inherently involves application of significant judgments by management in particular with respect to determination of recoverable/fair value amount of these investments. The recoverability of these investments is significantly dependent on operational performance of the respective subsidiaries and therefore there is a risk
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d)
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A ssessed the professional competence, objectivity and capabilities of the third party expert used by the management for performing the required valuations to estimate the recoverable value of the investments in the subsidiary;
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that the subsidiaries may not achieve the anticipated business growth
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e)
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Reconciled the cash flows to the business plans approved by
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which may lead to an impairment charge being recognised.
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the respective Board of Directors of the subsidiaries;
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f)
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Tested the inputs used in the Model by examining the
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Management has assessed the realisability of the aforesaid amounts by carrying out a valuation of the subsidiary's business using the discounted cashflow method ("the Model”). The Model involves
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underlying data and validating the future projections by comparing past projections with actual results, including discussions with management relating to these projections.
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estimates pertaining to expected business and earnings forecasts and
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g)
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Assessed the reasonableness of the key assumptions used
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key assumptions including those related to discount and long-term
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and appropriateness of the valuation methodology applied
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growth rates. These estimates require high degree of management
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by engaging auditor's valuation experts. Tested the discount
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judgement and is inherently subjective.
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rate and terminal growth rates used in the forecast including comparison to economic and industry forecasts, where appropriate;
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Considering the significance of the above matter to the standalone financial statements, complexities and judgement involved, and the significant auditor attention required to test such management's judgement, we have identified this as a key audit matter for current year audit.
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h)
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Evaluated sensitivity analysis performed by the management and performed independent sensitivity analysis on these key assumptions to assess potential impact of downside in the underlying cash flow forecasts and assessed the possible mitigating actions identified by management.
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i)
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Evaluated the appropriateness and adequacy of disclosures made in the standalone financial statements in accordance with the applicable accounting standards.
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b) Estimation of sales returns and discounts:
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Our audit procedures included, but were not limited to the following
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Refer material accounting policy information in note 2.5 to the
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procedures:
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standalone financial statements.
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a)
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Obtained an understanding from the management with
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The company is involved in publishing and distribution of educational books. Due to the nature of business, the Company offers an option to the customers to return unsold inventory. Significant amount of sales returns are received in the year subsequent to the year when books
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respect to process and controls followed by the Company to determine provision for sales return and discount including design and implementation of controls. We have tested the design and operating effectiveness of these controls
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are sold. Discount comprises of turnover, cash and other discount.
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b)
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O btained management's calculations for provision for
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Turnover discount is offered to the customers in the period subsequent
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sales returns and discounts, recalculated the amounts for
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to the reporting date based on parameters for a specified period. Cash
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mathematical accuracy and evaluated the assumptions used
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discount is offered based on the cash discount schemes applicable
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by reference to internal sources (i.e. management budgets and
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to certain months. Further, at the time of annual settlement, which
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schemes offered to customers).
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may not coincide with the financial year, with respective debtors, other discounts are offered based on their negotiations agreed with respective customers. Provision for such sales returns and discounts are estimated, deducted from revenue and accounts receivables. During the current year, the Company has made provisions for sales returns and discounts amounting to INR 370.70 million and INR 421.60 million respectively.
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c)
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C onsidered the accuracy of management's estimates in previous years by comparing historical provisions to the actual amounts to assess the management ability to accurately estimate their sales returns and discounts.
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Key audit matter
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How our audit addressed the key audit matter
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Estimates of sales returns and discounts are required to be made
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d)
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Tested the actual sales return and discounts passed to
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at the time of sale. When determining the appropriate allowance,
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customers after the balance sheet date and upto 10 days prior
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management considers historical trends, present changes in policies
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to approval of financials to determine whether the revenue
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for the academic season, as a basis for the estimate as well as all other
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has been recognized in the appropriate period.
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known factors, which could significantly influence the level of future sales returns and discount claims. Significant judgement is required in assessing the appropriate level of the provision for sales return and discounts.
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e)
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Assessed the disclosures in respect of sales returns and discounts included in the financial statements.
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Measuring provisions for sales return and discounts is a key audit matter as it requires significant estimates made by Management. Such judgements include management’s expectation of sales returns and discounts and historical estimates of sales returns and discounts vis a vis the sales returns and discounts received during the year.
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c) Deferred tax assets:
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Our audit procedures included, but were not limited to the following
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Refer material accounting policy information in note 2.6 to the
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procedures:
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standalone financial statements.
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a)
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Obtained an understanding from the management with
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As on 31 March 2024, the Company has recognized deferred tax assets (net) amounting to INR 414.86 million. The recognition of deferred tax liabilities includes all taxable temporary differences, while deferred tax assets are only recorded to the extent it is probable that sufficient
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respect to process and controls followed by the Company to compute and assess realisability of Deferred Tax Assets including design and implementation of controls. We have tested the design and operating effectiveness of these controls.
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deferred tax liabilities or taxable profit will be available in the future
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b)
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Obtained the management’s calculation for the computation
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against which the deductible temporary differences can be used.
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of deferred taxes and performed re-computation to test
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Management has recognized deferred tax asset on the MAT credit
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arithmetical accuracy.
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and unabsorbed losses basis the reasonable certainty that sufficient
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c)
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Traced inputs used in the deferred tax calculation from source
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taxable profits, based on forecast of business operations, will be
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documents.
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available with the Company in future.
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d)
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Analyzed the future projections of the company, as approved
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Since, the recognition of deferred tax assets relies on the significant
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by the Board of Directors of the Company and assumptions
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application of judgement by the management in respect of assessing
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used as to when it would be certain that company would earn
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the probability and sufficiency of future taxable profits and future
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future taxable income.
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reversals of existing taxable temporary differences, it is considered as key audit matter.
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e)
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Evaluated management’s assessment of time period available for adjustment of such deferred tax assets as per provisions of the Income Tax Act, 1961 and appropriateness of the accounting treatment with respect to the recognition of deferred tax assets as per requirements of Ind AS 12, Income Taxes.
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f)
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Assessed the sensitivity of the outcomes in the above scenario to reasonably possible changes in assumptions and evaluated the realisability of deferred tax asset as to when the company would earn future taxable profits.
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g)
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Assessed the disclosures in respect of deferred tax included in the financial statements.
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Information other than the Financial Statements and Auditor's Report thereon
7. The Company's Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our
auditor's report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available 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.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
8. The accompanying standalone financial statements have been approved by the Company's Board of Directors. The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
9. I n preparing the financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
10. 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
11. 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 Standards on Auditing 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.
12. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act 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 Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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;
• C onclude on the appropriateness of Board of Directors' 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 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; and
• 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.
13. 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.
14. 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.
15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.
Other Matter
16. The Company, Blackie, Nirja, DS Digital and Safari Digital had prepared separate complete set of general purpose financial statements for the year ended 31 March 2023 before giving effect to the Scheme in accordance with the accounting principles generally accepted in India, including Ind AS specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, on which for the Company, we had issued unmodified opinion vide separate auditor’s report to the shareholders of the companies dated 30 May 2023 for the year ended 31 March 2023 and other auditors had issued unmodified opinion for Blackie, Nirja, DS Digital and Safari Digital vide separate auditor’s reports to the shareholders of the companies dated 10 May 2023 for
the year ended 31 March 2023, which has been furnished to us by the management and has been relied upon by us for the purpose of our audit of the standalone financial statements. Our opinion is not modified in respect of this matter.
17. The accompanying standalone financial statements includes the financial information of education business transferred from DS Digital and Safari Digital for the year ended 31 March 2023 which has been prepared by the management using the audited special purpose financial statements of aforesaid entities as referred to in paragraph 16 above and has been audited by other auditors who have issued unmodified audit opinion dated 04 November 2023 for the year ended 31 March 2023 on such carved out financial information. Such report has been furnished to us by the management and has been relied upon by us for the purpose of audit of the standalone financial statements. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
18. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
19. As required by the Companies (Auditor's Report) Order, 2020 ('the Order') issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
20. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;
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 except for the matters stated in paragraph 20(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
c) The standalone financial statements dealt with by this report are in agreement with the books of account;
d) I n our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of section 164(2) of the Act;
f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 20(b) above on reporting under section 143 (3) (b) of the Act and paragraph 20(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);
g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2024 and the operating effectiveness of such controls, refer to our separate report in Annexure B wherein we have expressed an unmodified opinion; and
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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The Company, as detailed in note 53 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2024;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2024.;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024.;
iv. a. The management has represented that,
to the best of its knowledge and belief, as disclosed in note 58(v) to the standalone financial statements, no funds have been
advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities ('the 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 ('the Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 58(vi) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ('the 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; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.
v. The final dividend paid by the Company during the year ended 31 March 2024 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend. As stated in note 47 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2024 which is subject to the approval of the members at the ensuing Annual General Meeting. The
dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As stated in note 59 to the standalone financial statements and based on our examination which included test checks, the Company, in respect of financial year commencing on 1 April 2023, has used an 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 relevant transactions recorded in the software except that, the audit trail feature was not enabled at database level for accounting software to log any direct data changes. Further,
during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of the accounting software where such feature is enabled.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Sd/-
Tarun Gupta
Partner
Membership No.: 507892
UDIN:24507892BKEITC2172
Place: New Delhi
Date: 24 May 2024
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