We are pleased to present the report on the business and operations of your Company forthe year ended March 31 2020.
1. FINANCIAL RESULTS
Rs. in Lakh
|PARTICULARS || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Total Income ||1501.38 ||637.38 ||1499.88 ||638.79 |
|Operational Administration and Other Expenses ||1124.20 ||814.60 ||4237.44 ||7045.36 |
|Profit/(Loss) Before Depreciation Interest And Tax ||377.18 ||(177.22) ||(2737.56) ||(6406.57) |
|Depreciation ||35.89 ||22.73 ||36.15 ||26.66 |
|Interest and Finance Charges ||993.48 ||867.53 ||3931.09 ||3359.73 |
|Profit / (Loss) Before Exceptional Items ||(652.19) ||(1067.48) ||(6704.80) ||(9792.96) |
|Exceptional Items ||0 ||0 ||0 ||0 |
|Profit / (Loss) Before Tax ||(652.19) ||(1067.48) ||(6704.80) ||(9792.96) |
|Tax Expense ||(0.40) ||0 ||(0.40) ||0 |
|Other Comprehensive Income ||5.64 ||6.22 ||5.12 ||7.44 |
|Profit/ (Loss) after Tax ||(646.95) ||(1061.26) ||(6700.08) ||(9785.52) |
|Basic and diluted ||(1.25) ||(2.04) ||(12.83) ||(18.74) |
2. STATE OF THE COMPANY'S AFFAIRS
During the financial year 2019-20 the Company witnessed loss both on Standalone andConsolidated basis. The Company's income from operation amounted to Rs. 1447.63 lakhs forthe current FY while Rs. 627.64 in the preceding years.
The Standalone Loss after tax stood at Rs. 652.59 lakhs as against loss of Rs. 1067.48lakhs in 2019. Further the Consolidated Loss after tax stood at 6705.20 lakhs as againstloss of Rs. 9792.96 lakhs in 2019.
3. TRANSFER TO RESERVES
In view of the losses incurred by the Company during the year the Board of Directorsdid not propose to transfer any amount to reserves for the period under review.
In view of the losses and in order to conserve the resources of the Company for futureBusiness operations the Board of Directors did not recommend any dividend for thefinancial year ended March 31 2020.
5. CAPITAL STRUCTURE
During the year there is no change in the capital structure of the Company.
6. PUBLIC DEPOSITS
The Company has not accepted/renewed any fixed deposits during the year under review.
All the properties of your Company have been adequately insured.
8. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
9. RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and erstwhile ListingAgreement and the Equity Listing Agreement signed with the BSE Limited pursuant to SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 your company hasformulated a Policy on Related Party Transactions which is also available on the Company'swebsite at http://www.pvpcinema.com/ pdf/2015/RPTPolicy-PHML.pdf. The policy intends toensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and the Related Parties.
During the year under review there were no Related Party Transactions or MaterialRelated Party Transactions i.e. transactions exceeding 10% of the annual consolidatedturnover as per the latest audited financial statements. Accordingly the disclosure ofRelated Party transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC 2 is not applicable for the year ended March 31 2020.
During the year the Company had not entered into any contract / arrangement /transactions with Related Parties which could be considered as material in terms ofRegulation 23 of the SEBI (LODR) Regulations 2015. In accordance with Accounting Standard18 the Related Party Transactions are disclosed under Note No. 40 of the StandaloneFinancial Statements.
10. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT
As on the date of this report there are no material changes in the Company which mayaffect the financial position of the Company between the end of Financial Year and Date ofReport.
11. SUBSIDIARY COMPANIES
The Company along with its subsidiaries is operating in the verticals of FilmProduction and Film Financing. As on March 31 2020 the Company has 2 (two) wholly-ownedsubsidiaries viz. PVP Capital Limited PVP Cinema Private Limited.
The consolidated financial statements of the Company including its subsidiaries havebeen prepared in accordance with Section 129(3) and Section 133 of the Companies Act 2013read with the rules made thereunder and applicable Indian Accounting Standards (Ind AS)along with the Auditor's Report forms part of this Annual Report. Further a statementcontaining salient features of the financial statements of the subsidiaries in theprescribed format AOC-1 is appended as Annexure - 1 to the Board's Report. Hence aseparate report on the performance and financial position of each of the subsidiaries andjoint venture companies is not repeated here for the sake of brevity.
As required under Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the websitewww.pvpcinema.com. These documents will also be available for inspection during thebusiness hours at the registered office of the Company and any member who wish to getcopies of such financial statements may write to the Company for such requirement.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement)Regulations 2015 is presented in a separate section forming part of the Annual Report.
13. CORPORATE GOVERNANCE
The Company is committed to maintain the prescribed standards of Corporate Governance.The Directors adhere to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance practices and have implemented all the mandatory stipulationsprescribed. The Report on Corporate Governance as stipulated under Regulation 34 read withSchedule V of the SEBI (Listing Obligations & Disclosure Requirement) Regulations2015 forms part of the Annual Report.
14. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
14.1 During the year following appointments took place:
Mr. Nandakumar Subburaman was appointed as an Additional Director on 07.11.2019who shall hold office till the date of this Annual General Meeting.
Mrs. P J Bhavani was appointed as an Additional Woman Director on 31.07.2020who shall hold office till the date of this Annual General Meeting.
Mr. Sai Teja Ivaturi was appointed as the Company Secretary w.e.f 31.07.2020.
Board of Directors recommends the above stated appointments of Directors and briefprofile of them is given in the explanatory statement report attached to this report.
Mrs. Sai Padma Potluri was appointed as Woman Director of the Company on14.08.2019 and resigned on 01.06.2020 due to her personal reasons.
Ms. Surabi Jain resigned from the post of Company Secretary W.e.f. 30.04.2020.
There is no other resignations in the Key Managerial Personnel except the above.
15. Training and familiarization programs and Annual Board Evaluation process
The details of training and familiarization programs and Annual Board Evaluationprocess for directors have been provided under the Corporate Governance Report.
The Independent Directors have submitted the declaration of independence pursuant toSection 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in sub-section(6) of Section 149 of the Companies Act 2013.
The policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of director and alsoremuneration for Key Managerial Personnel and other employees and Board evaluation processalso forms part of Corporate Governance Report as per Section 178(3) of the Companies Act2013 is hosted on the Company's website and the web link thereto ishttp://pvpcinema.com/docs/other_statuatory_info/PMI-N&RCommPolicy.pdf.
16. Composition of Board Committees are specified as per the date of Director's report
|Audit Committee || |
|Mr. N. S. Kumar ||Chairman |
|Mr. Sohrab Chinoy ||Member |
|Mr. Prasad V. Potluri ||Member |
| || |
|Nomination and Remuneration Committee || |
|Mr. N. S. Kumar ||Chairman |
|Mr. Sohrab Chinoy ||Member |
|Mrs. PJ Bhavani ||Member |
| || |
|Stakeholders Relationship Committee || |
|Mr. N. S. Kumar ||Chairman |
|Mr. Sohrab Chinoy ||Member |
|Mr. Prasad V. Potluri ||Member |
| || |
|Corporate Social Responsibility Committee || |
|Mr. N. S. Kumar ||Chairman |
|Mr. Sohrab Chinoy ||Member |
|Mr. Prasad V. Potluri ||Member |
Further details with respect to the aforesaid Committees are provided in the CorporateGovernance Report attached herewith.
17. NUMBER OF MEETINGS OF THE BOARD
The Board met 6 (Six) times during the financial year and the details of which aregiven in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between any two meetings was well within the period prescribed under theprovisions of the Companies Act 2013.
18. DIRECTORS' RESPONSIBILITY STATEMENT
The financial statements of the Company are prepared as per applicable AccountingStandards as prescribed under Section 133 read with Rule 7 of the Companies (Accounts)Rules 2014 and other applicable provisions if any. There are no material departures fromprescribed accounting standards. The Directors confirm that:
(i) In preparation of the annual accounts for the financial year ended March 31 2020the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(ii) The directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(iv) The directors have prepared the annual accounts on a going concern basis;
(v) The directors have laid down internal financial controls which are adequate andare operating effectively; and
(vi) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate to operate the company effectively.
19. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSEC.149
The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7) of section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section(6) of Section 149.
20.1 Statutory Auditor
As per provision of Section 139 of the Act M/s Brahmayya & Co. CharteredAccountants (FRN: 000511S) were appointed as Statutory Auditors of your Company to holdoffice until the Conclusion of 22nd AGM.
Auditors' Report & Directors' Comments on the Qualification made by statutoryauditors:
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.
The Auditors' Report for the financial year 2019-20 is a "qualified report'' forboth standalone & consolidated financial statements.
On Standalone financial statement:
1. Attention is invited to Note No.29 to the Standalone Financial Statements inrelation to loans and advances made for film production (including interest accrued)amounting to Rs.3632.82 lakhs whose realisability is significantly dependent on timelycompletion of production of films and the commercial viability of the films underproduction etc. Management is of the view that loans and advances can be realised at thetime of release of the movies and accordingly the company is confident of realizing theentire amount of loans with interest and does not foresee any erosion in carrying value.We were unable to obtain sufficient appropriate audit evidence about the carrying amountsof loans and advances as at 31st March 2020 as the management was unable to provide usthe current status of production films and confirmation of balances from the borrowers.Consequently we were unable to determine whether any adjustments to the carrying amountsof loans and advances were necessary and to this extent loss for the year is understatedto this extent.
2. Attention is invited to Note No.29 to the Standalone Financial Statements inrelation to inventory i.e films production expenses amounting to Rs.4894.43 lakhs mainlyconsists of advances given to artists and co-producers. As the management has notcommenced the production of films the advances continued to be carried as inventory.However management states that it is evaluating options for optimal utilization of thesepayments. In the absences of demonstrable approach towards commencement and completion ofproduction of films and also in the absence of confirmation of balances from the parties.Consequently we were unable to determine whether any adjustments to the carrying amountsof inventory is necessary and to this extent loss for the year is understated to thisextent.
3. Attention is invited to Note no.30 to the Standalone Financial Statements inrelation to investment in equity shares in PVP Capital Limited ('PVPCL' a Wholly OwnedSubsidiary Company)amounting to Rs.2521.74 lakhs. Considering erosion in the net worthof the subsidiary company and its dependence on the holding company to continue as a goingconcern and in the absence of visible cash flows defaults in repayment of its dues tobank non-payment of statutory dues the company is currently pursuing the realization ofdues to the company and settlement of existing lenders other than this the company hasnot been carrying any business activity further the regulatory authorities may cancel theregistration to carry the principal business activity as a Non- Banking Finance Companydue to non-maintenance of minimum net owned fund of Rs.200 lakhs as stated in said note tothe financial statements and other related factors indicates the existence of materialityuncertainty in carrying value of investments. Management asserts that no adjustment to thecarrying value is required as it is confident that Investee Company has ability to garnerthe required cash flows. Whereas we were unable to assess the financial ability of theinvestee company particularly from the perspective of meetings its obligations. Hence weare of the opinion that the entire carrying value of investment need to be provided forand to this extent the loss for year is understated to this extent.
4. Attention is invited to Note No.31 and 32 to the Standalone Financial Statements inrelation to preparation of financial statements on "Going Concern Basis withoutcarrying any major business activity incurring continuous losses from operations adversekey financial ratios non-payment of statutory dues impact of our observations made inpreceding paragraph the impact of outbreak of Coronavirus (COVID-19)on the businessoperations and other related factors indicates that there is an existence of materialuncertainty that will cast significant doubt on the company's ability to continue as agoing concern. Therefore company may not be able to realize its assets and discharge itsliabilities in the normal course of business. Notwithstanding this the financialstatements have been prepared as that of going concern and consequently the terminalvalues of various assets and liabilities have not been determined and we are thereforeunable to express our opinion whether the preparation of financial statements on a goingconcern assumption is appropriate or not.
On consolidated financial statement:
5. Attention is invited to Note No.29 to the consolidated financial statements inrelation to loans and advances made for film production (including interest accrued)amounting to Rs.3632.82 lakhs whose realisability is significantly dependent on timelycompletion of production of films and the commercial viability of the films underproduction etc. Management is of the view that loans and advances can be realised at thetime of release of the movies and accordingly the company is confident of realizing theentire amount of loans with interest and does not foresee any erosion in carrying value.We were unable to obtain sufficient appropriate audit evidence about the carrying amountsof loans and advances as on
31stMarch 2020 as the management was unable to provide us the current status ofproduction films and confirmation of balances from the borrowers. Consequently we wereunable to determine whether any adjustments to the carrying amounts of loans and advanceswere necessary and to this extent loss for the year is understated to this extent.
6. Attention is invited to Note no.29 to the consolidated financial statements inrelation to inventory i.e films production expenses amounting to Rs. 4894.43 lakhsmainly consists of advances given to artists and co-producers. As the management has notcommenced the production of films the advances continued to be carried as inventory.However management states that it is evaluating options for optimal utilization of thesepayments. In the absences of demonstrable approach towards commencement and completion ofproduction of films and also in the absence of confirmation of balances from the parties.Consequently we were unable to determine whether any adjustments to the carrying amountsof inventory is necessary and to this extent loss for the year is understated to thisextent.
7. The independent auditor of subsidiary company in their auditor's report on thefinancial statements for the year ended 31st March 2020 have drawn Qualified Opinionreproduced by us as under:
a. Attention is invited note no.30 to the consolidated financial statements includesthe financial statements of PVP Capital Limited company has not adhered to repaymentschedule for principal and interest dues to its bank consequent to which the bank filedfor recovery of its dues before the Debt Recovery Tribunal (DRT) and also initiatedrecovery proceedings against the company under Securitization and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act 2002).Further the bank has taken symbolic possession of immovable property and issued salenotice for e-auction of the property given by the ultimate holding company as corporateguarantee but there were no bidders and consequently the e-auction sale proceedings hasbecome in fructuous. The outstanding amount is Rs.16787.91 lakhs as per books of accountsas on 31st March 2020.
Further the company is currently pursuing the realization of dues to the company andsettlement of existing lenders other than this the company has not been carrying anybusiness activity the regulatory authorities may cancel the registration to carry theprincipal business activity as a Non- Banking Finance Company due to nonmaintenance ofminimum net owned fund of Rs.200 lakhs as stated in the said note to the financialstatements the company's ability to meet its financial obligations non payment ofstatutory dues and in the absence of visible cash flows doubts are cast on its ability tocontinue as a going concern to achieve its future business plans. Taking intoconsideration pending ultimate outcome of the legal proceedings as well as liquidityconstraints we are unable to express our view whether it would be appropriate to treatthe company as going concern. However based on the management assertions the company'sfinancial statements have been prepared on the basis of going concern the impact if anyif the company was to be treated as not a going concern is not ascertainable at thisstage.
b. Attention is invited to note no.31 to the consolidated financial statements includesthe financial statements of PVP Capital Limited in relation to loans for film productionamounting to Rs.15381.04 lakhs whose realisability is significantly dependent on timelycompletion of production of films and the commercial viability of the films underproduction etc. Management has assessed the recoverability of the loan amount andaccordingly made a provision amounting to Rs.12397.87 lakhs as adequate no additionalprovision is necessary in this regard. However Management is not able to provide us thestatus of production of films and recoverability of the whole amount. Accordingly we areunable to express our view whether any adjustments to the carrying value if anyrequired is not ascertainable at this stage.
8. Attention is invited to Note No.32 and 33 to the consolidated financial statement inrelation to preparation of consolidated financial statements on "Going ConcernBasis" while the networth being completely eroded without carrying any majorbusiness activity in the group incurring continuous losses from business operationsadverse key financial ratios nonpayment of statutory dues the impact of outbreak ofCoronavirus (COVID -19) on the business operations of the Group as mentioned in note no.33to the financial statements matters mentioned in preceding paragraphs and other relatedfactors indicates that there is an existence of material uncertainty that will castsignificant doubt on the group's ability to continue as a going concern. Therefore companymay not be able to realize its assets and discharge its liabilities in the normal courseof business. Notwithstanding this the financial statements have been prepared as that ofgoing concern and consequently the terminal values of various assets and liabilities havenot been determined and we are therefore unable to express our view whether thepreparation of consolidated financial statements on a going concern assumption isappropriate or not.
Management Comments on the above qualification:
1. Realisability is significantly dependent on timely completion of production of filmsand the commercial viability of the films under production etc. Company is of the viewthat loans and advances can be realized at the time of release of the movies andaccordingly the company is confident of realizing the entire amount of loans withinterest and does not foresee any erosion in carrying value. The company is confident ofrealizing the value at which they are carried notwithstanding the period of outstanding.
2. The 'films under production expenses' mainly comprising payments to artistes andco-producers the company is evaluating options for optimal utilization of these paymentsin production and release of films. The company does not foresee any erosion in carryingvalue.
3. The company asserts that no adjustment to the carrying value on investments of Rs.2521.74 lakhs is required at this stage as it is confident that by considering theaspects like recovery from the borrowers and other resources to bring in additional cashflows will meet its obligations. Further PVP Capital Limited has applied for One TimeSettlement to the bank and confident to settle the same soon.
4. As on 31st March 2020 the company has a net worth of Rs.1192.77 Lakhs. Eventhough the company is incurring continuous losses it succeeded in better EBITA Margins.This is entirely aligned with the Company's long range plan which encompasses a continueddevelopment of the Company's revenue generating activities in order to absorb the lossescarried forward and generate profit over a period of time. Further the lenders haveextended their confidence by advancing finance and extending the time period of repayment.There is no intention to liquidate and the Company has got future projects to keepimproving. The Company has paid advance amounts to the artistes and technicians for thefuture movies productions which are shown under Inventory. Further during the course of aperiod the company indents to strategically merge with its holding company which willcreate positive synergy in future. The financial statements have been prepared on a goingconcern basis based on cumulative input of the available movie projects in pipe line andrisk mitigating factors.
5. Same comment as provided in (1).
6. Same comment as provided in (2).
7. Same comment as provided in (3).
8. As on 31st March 2020 the company has a negative net worth of Rs.15752.45 Lakhs.Even though the company is incurring continuous losses and negative net worth the groupis succeeded in better EBITA Margins. This is entirely aligned with the Group's long rangeplan which encompasses a continued development of the Group's revenue generatingactivities in order to absorb the losses carried forward and generate profit over a periodof time. Further the lenders have extended their confidence by advancing finance andextending the time period of repayment. There is no intention to liquidate and the Companyhas got future projects to keep improving. The Group has paid advance amounts to theartistes and technicians for the future movies production which is shown under Inventory.Further during the course of a period the Group indents to strategically merge with itsholding company which will create positive synergy in future. The consolidated financialstatements have been prepared on a going concern basis based on cumulative input of theavailable movie projects in pipe line and risk mitigating factors.
COVID -19 Impact on Business Operations
The spread of COVID-19 has impacted global economic activity as has been witnessed inseveral countries. There have been severe disruptions in businesses in India during theLockdown period. The company has assessed recoverability and carrying value of assetscomprising property plant and equipment trade receivables inventory and investments atbalance sheet date. Based on the assessment by the management the net carrying values ofthe said assets will be recovered at values stated and there is no change in its abilityto continue as Going Concern. The company evaluated the internal controls with referenceto financial statements which have found to be operating effectively given that there hasbeen no dilution of such controls due to factors caused by COIVD-19 situation.
20.2 Secretarial Auditor and Secretarial Audit report:
Pursuant to the provisions of Section 204 of the Act and Rules and Regulation 24A ofthe Listing Regulations and other applicable provisions framed thereunder as amendedyour Company has appointed M/s. D. Hanumanta Raju and Co. Company Secretaries toundertake the Secretarial Audit of Picturehouse Media Limited and PVP Capital Limited(Material subsidiary)
The Secretarial Audit Report for financial year 2019-20 forms part of the Annual Reportas Annexure 2 of the Board's Report.
a. The Composition of Nomination and Remuneration Committee of the Company was not incompliance with the Section 178(1) of Companies Act 2013 and Regulation No. 19(1) &(2) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 from 15.08.2019 till 06.11.2019. However the Company hascomplied with said provisions and regulations by reconstituting the committee on07.11.2019.
b. The Company did not submit the statement relating to Related Party Transactions tostock exchange on consolidated basis within 30 days from the date of publication offinancial results for the half year ended on 31.03.2019 and 30.09.2019 and also did notpublish the same on Company's website as required under Regulation 23(9) Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015
c. The Company had to submit Quarterly Corporate Governance Report within 15 days fromthe end of quarter as required under regulation 27(2) of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 but the same wassubmitted with a delay of 5 days to Stock Exchange for the quarter ended 31.12.2019.
d. During the period under review the Company did not file the certificate/s with theStock Exchange as required under Regulation 74(5) of SEBI (Depository Participants)Regulations 2018.
e. The Company did not file the initial disclosure with regard to entity identified asa Large Corporate to the stock exchange within prescribed period as perCircular No.SEBI/HO/DDHS/CIRIP/2018/144 dated November 262018. However this was filed on 15.10.2019.
f. The Company was required to close trading window from the end of every quarter till48 hours after declaration of financial results for designated persons in terms ofRegulation 9 of SEBI (PIT) Regulations 2015 read with Schedule B. However the Companyclosed trading window from the date of Intimation of Board Meeting to Stock exchange till48 hours after declaration of financial results for all the quarters.
Management Comments on the above qualification:
a) Mrs. Sai Padma Potluri was appointed as a member of Nomination and RemunerationCommittee in the Board Meeting dated 14/08/2019 inadvertently. As per Regulation 17 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the compositionof Nomination and Remuneration Committee need to be of Non-Executive Directors as Mrs.Sai Padma Potluri is Executive Director the composition of Nomination and RemunerationCommittee is reconstituted by inducting Mr. Nandakumar Subburaman Non-Executive Directoras member of the Committee on 07/11/2019 in compliance with SEBI (LODR) Regulations 2015.
b) The qualifications of the Secretarial Auditors from point b to f pertaining to delayin filing of report and submission have been noted by the Company and the Company assureto follow the same in future.
21. Cost Records:
Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 is not required by the Company andaccordingly such accounts and records are not made and maintained
22. REPORTING OF FRAUDS
There have been no instances of fraud reported by Statutory Auditors of the Companyunder Section 143(12) of the Companies Act 2013 and the Rules framed there under eitherto the Company or to the Central Government.
23. STOCK EXCHANGE LISTING FEE
Presently the Equity Shares of the Company are listed on the BSE Limited (BSE).
Due to COVID-19 Pandemic the Company is not in a position to meet the financialcommitments and thereby approached BSE Limited and requested to grant extension forpayment of listing fees for the financial year 2020-2021 and was awaiting for itsapproval.
24. MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER CERTIFICATION
As required under the listing regulations the Managing Director and the ChiefFinancial Officer Certification is attached to this Report.
25. SIGNIFICANT ORDERS AND MATTERS
During the financial year of the Company-
25.1 The shares of the company are listed in BSE. The Board had a Woman director tillMarch 2017 and subsequent to the resignation a new Woman Director was appointed inDecember 2018. SEBI issued a Circular in May 2018 that non-appointment will attractfine. The stock exchange has imposed a penalty of Rs. 759920/- under regulation 17 &19 of SEBI (LODR) Regulations 2015. The Company also appealed the same before theSecurities and Exchange Board of India dated April 26 2019 seeking exemption underregulation 102 of LODR Regulation and the same was also rejected.
However the Company has filed an appeal questioning the order and the same by rejectedby Securities Appellant Tribunal stating the order was rightly dismissed by SEBI underRegulation 102 of the LODR Regulations
25.2 PVP Capital Limited ('PVPCL') a Wholly Owned Subsidiary Company has not adheredto repayment schedule of principal and interest due to a bank consequent to which the bankhas filed a case for recovery of the dues before the Debt Recovery Tribunal (DRT).Further the bank has taken symbolic possession of secured immovable property of theGroup Company under Securitisation and Reconstruction of Financial Assets and Enforcementof Security Interest Act 2002 ( SARFAESI) and issued an e-auction sale notice. There wereno bidders for the aforesaid sale notice and consequently the e-auction sale proceedingshas become infructuous. Further PVPCL has applied for One Time Settlement to the bank andconfident to settle the same. Further The Company has received communication letter fromthe Reserve Bank of India (RBI) letter dated 20th November 2019 stating that the Companyhas not maintained the mandatory amount of Net Owned Fund of Rs. 200 Lakhs.
Further RBI has instructed to furnish an action plan to achieve the mandatory amountof Net Owned Funds of Rs. 200 Lakhs on or before 31st March 2020.
As per Bank statement outstanding loan as on 31st March 2020 is Rs. 16787.91 lakhs(Rs. 14076.05 lakhs as of 31st March 2019).
26. EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is placed on website of the Company i.e.www.pvpcinema.com.
27. INTERNAL FINANCIAL CONTROL
The Company has a well-placed proper and adequate Internal Financial Control (IFC)system which ensures that all assets are safeguarded and protected and that thetransactions are authorized recorded and reported correctly. This is commensurate withthe nature of business and the size and complexity of the company's operations.
The company also has internal control through sufficient policies and procedures overthe recoverability of advances made for film financing and provide reasonable assurancethat such advances would not affect the company adversely.
28. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 and the Rules framed there under andpursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has a Whistle Blower Policy framed to deal with instances offraud and mismanagement if any genuine grievances to the appropriate authority.
The details of the Policy are explained in the Corporate Governance Report and alsoposted on the website of the Company www.pvpcinema.com. During the year under review theCompany has not received any complaint(s) under the said policy.
29. CORPORATE SOCIAL RESPONSIBILITY
Your Company has in place a CSR Committee in accordance with Section 135 of the Act.The details of the CSR Policy and the Report on CSR activities as prescribed under the Actand Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed herewith asAnnexure 3. Further the CSR Policy as approved by the Board is also available on websiteof the company.
30. PARTICULARS OF EMPLOYEES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) and 5 (2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure 4 to the Board's Report.
31. RISK MANAGEMENT POLICY
The Company has risk management policy in place with an object to ensure that all theCurrent and Future Material Risks of the Company are identified assessed/quantified andeffective steps are taken to mitigate/ reduce the effects of the risks to ensure propergrowth of the business and there are no elements of risk which in the opinion of Board ofDirectors may jeopardize the existence of the Company.
32. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with applicable provisions of the Secretarial Standards issuedby the Institute of Company Secretaries of India and approved by the Government of Indiaunder Section 118(10) of the Companies Act 2013.
33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
During the financial year ended 31st March 2020 the Company has not received anycomplaints pertaining to Sexual Harassment.
34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO
Particulars regarding technology absorption conservation of energy and foreignexchange earnings and outgo required under Section 134 (3)(m) of the Companies Act 2013read with Rule 8 of Companies (Accounts) Rules 2014 to the extent applicable are asunder:
A CONSERVATION OF ENERGY
The operations of the Company involve low energy consumption. Adequate measures havehowever been taken to conserve energy.
B TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
The Company continues to use the latest technologies for improving the quality of itsoperations.
C FOREIGN EXCHANGE EARNINGS AND OUTGO:
[Rs. In Lakh]
|PARTICULARS ||CURRENT YEAR ||PREVIOUS YEAR |
|Foreign Exchange Earnings ||Nil ||Nil |
|Foreign Exchange Outgo ||Nil ||Nil |
|Total ||Nil ||Nil |
Your Directors acknowledge with gratitude the co-operation and assistance received fromthe bankers actors technicians directors production houses shareholders governmentagencies and other business associates. Your Directors wish to place on record their deepsense of appreciation for the committed services by the employees of the Company.
For and on behalf of Board of Directors
| ||Sd/- ||Sd/- |
|Date : September 14 2020 ||Prasad V. Potluri ||N.S. Kumar |
|Place : Chennai ||Managing Director ||Director |