The Members of Prime Focus Limited
Your Company's Directors are pleased to present the Twenty-Third Annual Report togetherwith the Audited Financial Statements for financial year ended March 31 2020.
1. FINANCIAL PERFORMANCE SUMMARY
The Consolidated and Standalone Audited Financial Results for the financial year endedMarch 31 2020 are as follows:
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Income from services ||2887.67 ||2510.62 ||119.63 ||152.56 |
|Other operating income ||41.57 ||29.63 ||12.26 ||9.53 |
|Total revenue from operations ||2929.24 ||2540.25 ||131.89 ||162.09 |
|Less: Expenses ||2910.18 ||2485.50 ||155.19 ||179.03 |
|Add: Other income ||84.00 ||123.50 ||20.31 ||41.12 |
|Less: Finance costs ||231.40 ||236.68 ||63.32 ||57.39 |
|Less: Exceptional items ||67.56 ||- ||(200.27) ||- |
|Less: Tax expense ||(42.02) ||(25.48) ||(32.71) ||0.06 |
|Less: Minority interest ||(22.38) ||(10.24) ||- ||- |
|Profit/ (Loss) for the year ||(131.50) ||(22.71) ||166.67 ||(33.27) |
2. OPERATIONS AND PERFORMANCE REVIEW Consolidated
During the year under review total revenue from operations of the Company and itssubsidiaries stood at Rs 2929.24 crores as compared to Rs 2540.25 crores in the previousyear. Loss before tax during the year was Rs (195.90) crores as compared to Rs (58.42)crores in previous year. The Net Loss after tax was '(131.50) crores as compared to Rs(22.71) crores in previous year.
Total revenue from operations of the Company during the year was '131.89 crores ascompared to Rs 162.09 crores in the previous year. Profit / Loss before tax during theyear was '133.96 crores as compared to Rs (33.21) crores in the previous year. The Netprofit/Loss after tax was '166.67 crores as compared to Rs (33.27) crores in the previousyear. A detailed analysis on the Company's performance both Consolidated &Standalone is included in the "Management Discussion & Analysis" Reportwhich forms part of this Annual Report.
In order to conserve the resources of the Company the Directors do not recommend anydividend for its equity shares for the financial year 2019-20.
4. TRANSFER TO RESERVES
During the year under review the company has transferred Rs 82.50 crores from theforfeited Share warrant application money to Capital reserve.
5. SHARE CAPITAL
The paid-up equity share capital of the Company as on March 31 2020 was '299248978(Rupees Twenty Nine Crore Ninety Two Lakh Forty Eight Thousand Nine Hundred Seventy Eight)comprising of 299248978 equity shares of Rs 1/- each. During the year under review theCompany has allotted 66666 equity shares of Rs 1/- each pursuant to exercise of employeestock options. The Company has neither issued share with differential voting rights norsweat equity. As on March 31 2020 none of the Directors of the Company hold instrumentsconvertible into equity shares of the Company.
6. SECRETARIAL STANDARDS
The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India ('ICSI') and approved by the Central Governmentunder Section 118 (10) of the Companies Act 2013 (the 'Act') for the Financial Year ended2019-20.
7. EMPLOYEE STOCK OPTION SCHEME (ESOP)
The Company has implemented 'PFL-ESOP Scheme 2014' compliant with the SEBI (Share BasedEmployee Benefits) Regulations 2014 to reward and retain the qualified and skilledemployees and to give them an opportunity to participate in the growth of the Companythese schemes are administered by the ESOP Compensation Committee of the Company.
A certificate from the Statutory Auditors of the Company as required under Regulation13 of the SEBI (Share Based Employee Benefits) Regulations 2014 shall be availableelectronically for inspection by the Members at the ensuing Annual General Meeting. Thedisclosures as required under Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 read with SEBI Circular dated June 16 2015 are accessible on Company'swebsite at http://www.primefocus.com/sites/default/files/pdf/ ESOP disclosure 2019 20.pdfThe details of Employee Stock Options form part of the Notes to accounts to financialStatements in this Annual Report. No employee of the Company received grant of optionsduring the year amounting to 5% or more of the options granted or exceeding 1% of issuedcapital of the Company.
8. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of financial year of the Company to whichthe Financial Statements relate and the date of this Report. There has been no change inthe nature of business of the Company.
9. IMPACT OF PANDEMIC COVID-19
For details on the impact of COVID-19 please refer to the Report on ManagementDiscussion and Analysis and Notes No 41 of the standalone financial statements.
10. DISPOSAL OF THE VFX BUSINESS OF THE COMPANY TO DNEG CREATIVE SERVICES LIMITED ASUBSIDIARY OF THE COMPANY
The Company has executed a Business Transfer Agreement (BTA) on October 7 2019 withDNEG Creative Services Limited a subsidiary of the Company for sale of its businessdivision VFX business Limited as a going concern on a slump sale basis for a lump sumconsideration upto Rs 270 Crores (Rupees Two Hundred and Seventy Crores) subject toclosing adjustments if any as specified in the BTA.
11. DISPOSAL OF INVESTMENT HELD BY THE COMPANY IN PF MEDIA LIMITED (FORMERLY KNOWN ASRELIANCE MEDIA WORKS (MAURITIUS) LIMITED) ITS WHOLLY OWNED SUBSIDIARY
The Company has executed a Share Purchase Agreement (SPA) on March 31 2020 for sale of100% equity shares of its wholly owned subsidiary PF Media Limited to PF World Limited awholly owned subsidiary of the Company for an aggregate consideration upto USD 11 Millionand on the terms and conditions as contained in the said SPA.
12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant or material orderspassed by the Regulators or Courts or Tribunal which would impact the going concern statusof the Company and its future operation.
13. RISK MANAGEMENT
The Company is exposed to inherent uncertainties owing to the sectors in which itoperates. A key factor in determining a Company's capacity to create sustainable value isthe risks that the company is willing to take (at strategic and operational levels) andits ability to manage them effectively. Many risks exist in a Company's operatingenvironment and they emerge on a regular basis. The Company's Risk Management processesfocuses on ensuring that these risks are identified on a timely basis and addressed.
The Company is well aware of the above risks and as part of business strategy has arobust risk management framework to identify evaluate and mitigate business risks withtimely action. This framework seeks to enable growth create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantageby undertaking effective steps to manage risks.
14. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Audit Committee reviews adequacy and effectiveness of the Company's internalcontrol environment and monitors the implementation of audit recommendations includingthose relating to strengthening of the Company's risk management policies and systems. Forfurther details please refer to the Management Discussion and Analysis Report which formsa part of the Annual Report.
15. HUMAN RESOURCES
Human Resource is considered as one of the most critical resource in the business whichcan be continuously smoothened to maximize the effectiveness of the organization. HumanResource build the Enterprise and the sense of belonging would inculcate the spirit ofdedication and loyalty amongst them towards strengthening the Company's Policies andSystems. All personnel continue to have healthy cordial and harmonious approach therebyenhancing the contributory value of the Company. The Company has generally enjoyed cordialrelations with its personnel. Further the total number of permanent employees of theCompany as on March 31 2020 is 274.
16. PREVENTION OF SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and has a mechanismin place for prevention prohibition and redressal of sexual harassment at workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Company is committedto provide equal opportunities without regard to their race caste sex religion colournationality disability etc. All employees are treated with dignity with a view tomaintain a work environment free of sexual harassment whether physical verbal orpsychological. All employees (permanent contractual temporary trainees) are covered.
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. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment at workplace. During the year underreview Company has not received any complaints on sexual harassment and as such theCompany has not disposed of any complaints. There are no complaints pending as on the endof the Financial Year 2019-20 on sexual harassment.
17 . PUBLIC DEPOSITS
The Company has not accepted any deposits from the public falling within the ambit ofSection 73 and 76 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.
18. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Act andRule 12 of the Companies (Management and Administration) Rules 2014 is annexed as Annexure-Ato this Report and is available on the website of the Company at http://www.primefocus.com/sites/default/files/pdf/Extract of Annual j Return 2019 20.pdf.
19. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of the Act Regulation 33 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ( "SEBI Listing Regulations") and applicable Accounting Standards theAudited Consolidated Financial Statements of the Company for the financial year 2019-20together with the Auditors' Report form part of this Annual Report.
20. SUBSIDIARY COMPANIES JOINT VENTURE AND ASSOCIATE COMPANIES Financial Performance:
A statement containing the salient features of financial statements ofsubsidiaries/joint venture companies of the Company in the prescribed Form AOC - 1 forms apart of Consolidated Financial Statements (CFS) in compliance with Section 129 (3) andother applicable provisions if any of the Act read with Rule 5 of the Companies(Accounts) Rules 2014.
The said Form also highlights the financial performance of each of the subsidiariesincluded in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts)Rules 2014.
In accordance with Section 136 of the Act the financial statements of the subsidiaryand associate companies are available for inspection by the members at the RegisteredOffice of the Company during business hours on all working days except Saturdays andnational holidays upto the date of the Annual General Meeting of the Company i.eSeptember 30 2020. Any member desirous of obtaining a copy of the said financialstatements may write to the Company Secretary at the Registered Office of the Company. Thefinancial statements including the CFS and all other documents required to be attached tothis report have been uploaded on the website of the Company at www.primefocus.com.
The company has 43 subsidiaries as on March 31 2020. As on the date of signing thisreport the following changes have taken place in subsidiary companies:
a. Companies which have become subsidiary Company:
1. Jam8 Prime Focus LLP became subsidiary of the Company w.e.f April 22 2019
b. Companies which ceased to be Subsidiary Company:
1. Prime Focus Malaysia SDN. BHD. and Prime Focus World Malaysia SDN. BHD. weredissolved w.e.f June 27 2019 and ceased to be subsidiaries of the Company.
2. Double Negative LA LLC (DELAWARE LLC) (Formerly known as 1800 Vine Street LLC) hasbeen dissolved w.e.f December 11 2019 and cease to be subsidiary of the Company.
3. DNEG Creative Services Limited and Double Negative India Private Limited ceased tobe subsidiaries of Prime Focus Limited w.e.f April 012020 pursuant to Amalgamation withDNEG India Media Services Limited (formerly known as Gener8 India Media Services Limited).
4. DAX PFT LLC ceased to be subsidiary w.e.f April 8 2020 pursuant to merger withPrime Focus Technologies Inc.
5. Prime Focus VFX USA Inc. was dissolved w.e.f April 14 2020 and ceased to beSubsidiary of the Company.
c. Name changes:
1. Name change of DNEG Limited to DENG PLC w.e.f. October 30 2019
2. Name of RE:DEFINE FX LTD. has been changed to REDEFINE FX LTD. w.e.f December122019.
3. Name of Reliance Lowry Digital Imaging Services Inc has been changed to LowryDigital Imaging Services Inc w.e.f December 23 2019.
4. Name of Reliance Media Works (Mauritius) Limited has been changed to PF Media Ltd.w.e.f January 16 2020
d. Joint Venture / Associate Companies:
During the financial year under review there are no Companies which has become orceased to be Associate / Joint Venture.
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
i. The steps taken to or impact on conservation of energy-
Although the Company is not engaged in manufacturing activities as a responsiblecorporate citizen we continue to pursue and adopt appropriate energy conservationmeasures. The Company makes every effort to conserve energy as far as possible in itspostproduction facilities Studios Offices etc. The Company also takes significantmeasures to reduce energy consumption by using energy efficient computers and bypurchasing energy efficient equipment. The Company purchases PCs laptops airconditioners etc. that meet environment standards wherever possible and replace oldequipment with more energy-efficient equipment.
ii. The Steps taken by the Company for utilizing alternate sources of energy - Notapplicable.
iii. The capital investment on energy conservation equipment's
- The Company constantly evaluates new developments and invests into latest energyefficient technology.
B. TECHNOLOGY ABSORPTION
i. The efforts made towards technology absorption -
The Company adopts the latest trends in the technology development and introduces thesame so as to ensure reduction in cost with best quality output.
ii. The benefits derived like product improvement cost reduction Product developmentor import substitution -
iii. IMPORTED TECHNOLOGY
(a) The details of technology imported - Not Applicable
(b) The year of import - Not applicable
(c) Whether the technology has been fully absorbed - Not applicable
(d) If not fully absorbed - Not applicable
iv. Expenditure incurred on Research and Development (R&D)- Your company ispredominantly a service provider and therefore has not set up a formal R&D unithowever continuous research and development is carried out at various development centersas an integral part of the activities of the Company.
(C) PARTICULARS OF FOREIGN CURRENCY EARNINGS AND OUTGO:
|Particulars ||March 31 2020 ||March 31 2019 |
|Foreign exchange earned in terms of actual inflow ||57.15 ||23.56 |
|Foreign exchange outgo in terms of actual outflow ||3.54 ||15.51 |
22 MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis Report for the financial year ended March 31 2020as stipulated under Regulation 34 of SEBI Listing Regulations is included as a separatesection forming part of this Annual Report.
23. CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Practicing Company Secretary confirming compliance of CorporateGovernance norms as stipulated in Regulation 34 read along with schedule V of SEBI ListingRegulations is included in the Annual Report for the Financial Year 2019-20.
As per the relevant provisions of the Act and SEBI Listing Regulations during thefinancial year under review the following changes in Directors are detailed as follows:
i) Appointment/Reappointment of Directors:
a. Mr. Srinivasan Kodi Raghavan (DIN: 00012449) Mr. Padmanabha Gopal Aiyar (DIN:02722981) and Mr. Rivkaran Singh Chadha (DIN: 00308288) were re-appointed as IndependentDirectors of the Company at the 22nd Annual General Meeting to hold office for5 (five) consecutive years upto the conclusion of the 27th Annual GeneralMeeting. Further Dr. (Mrs.) Hemalatha Thiagarajan (DIN: 07144803) was re-appointed asthe Independent Director of the Company at the 22nd Annual General Meeting forthe period of 5 years w.e.f. March 31 2020 upto March 30 2025.
b. Pursuant to the recommendation of Nomination and Remuneration Committee Mr. JaiAnshul Ambani (DIN: 08054558) (Nominee of Reliance Media Works Financial Services PrivateLimited wholly owned subsidiary Reliance Media works Limited) was appointed as anAdditional Director of the Company by the Board of Directors with effect from November 142019 in respect of whom the company has received a notice in writing under section 160 ofthe Act from member proposing Mr. Jai Anshul Ambani as Director in the ensuing AnnualGeneral Meeting.
c. The term of Mr. Naresh Mahendranath Malhotra (DIN: 00004597) as a Chairman andWhole-time Director expired on March 31 2020. Upon the recommendation of the Nominationand Remuneration Committee and the Board of Directors in their meeting held on March 112020 the Members vide Special Resolution passed on April 18 2020 through postal ballotapproved the appointment of Mr. Naresh Mahendranath Malhotra as Chairman and Whole-timeDirector for a period of 3 (three) years w.e.f May 1 2020 on the terms and conditionsas recommended by the Nomination and Remuneration Committee. Mr. Naresh MahendranathMalhotra continued to be Non-Executive Director of the Company from April 1 2020 untilApril 30 2020.
ii) Changein designation
Mr. Ramakrishnan Sankaranarayanan (DIN: 02696897) Managing Director and Key ManagerialPersonnel (KMP) of the Company ceased to be the Managing Director and KMP of the Companyon expiration of his term of 3 years with effect from close of business hours on June 242020. However he continues to be Non- Executive Director of the Company with effect fromJune 25 2020.
ili) Retirement by Rotation
In accordance with the provisions of Section 152 of the Act read with Companies(Management & Administration) Rules 2014 Mr. Ramakrishnan Sankaranarayanan (DIN:02696897) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for re-appointment.
The Board recommends for the above appointment / reappointment. Items seeking yourapproval on the above are included in the Notice convening the Annual General Meeting.Brief resume and other requisite details as stipulated under SEBI Listing Regulations andSecretarial Standard- 2 on General Meetings of the directors being appointed /re-appointed / forms part of the Notice of the ensuing Annual General Meeting.
25. DECLARATION BY INDEPENDENT DIRECTORS
Every Independent Director at the first meeting of the Board after appointment andthereafter at the first meeting of the Board in every financial year or whenever there ischange in the circumstances which may affect his status as the independent director isrequired to provide the declaration that he/she meets the criteria of independence asprovided under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI ListingRegulations.
In accordance with the above the Company has received necessary declaration from eachindependent director under Section 149(7) of the Act that he/she meets the criteria ofindependence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of SEBIListing Regulations. Further all the Independent Directors have affirmed that they haveadhered and complied with the Company's Code of Conduct for Independent Directors which isframed in accordance with Schedule IV of the Act. In the opinion of the Board all theIndependent Directors fulfills the criteria of independence integrity expertise and hasrequired experience as provided under the Act Rules made there under read with the SEBIListing Regulations and are independent of the management.
Regarding proficiency the Company has adopted requisite steps towards the inclusion ofthe names of all Independent Directors in the data bank maintained with the IndianInstitute of Corporate Affairs ('IICA'). Accordingly the Independent Directors of theCompany have registered themselves with the IICA for the said purpose. In terms of Section150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification ofDirectors) Rules 2014 the Independent Directors are required to undertake onlineproficiency self-assessment test conducted by the IICA within a period of one (1) yearfrom the date of inclusion of their names in the data bank. The Independent Directors towhom the provisions of proficiency test are applicable will take the said onlineproficiency self-assessment test in due course.
26. RECEIPT OF REMUNERATION OR COMMISSION FROM HOLDING COMPANY OR SUBSIDIARY COMPANY
Mr. Ramakrishnan Sankaranarayanan Managing Director* of the Company is in receipt ofRs 18112150 (255865 USD) as remuneration in his capacity as a CEO of Prime FocusTechnologies Inc. a Subsidiary Company
Mr Ramakrishnan Sankaranarayanan (DIN: 02696897) ceased to be the Managing Director ofthe Company on expiration of his term of 3 years with effect from dose of business hourson June 242020.
27. KEY MANAGERIAL PERSONNEL (KMP)
The following Directors / Executives are KMPs as on March 312020:
Mr. Ramakrishnan Sankaranarayanan Managing Director *
Mr. Nishant Avinash Fadia Chief Financial Officer
Ms. Parina Nirav Shah Company Secretary and Compliance Officer
Mr. Ramakrishnan Sankaranarayanan (DIN: 02696897) ceased to be the Managing Directorof the Company on expiration of his term of 3 years with effect from close of businesshours on June 24 2020. However he continues to be Non Executive Director of the Companywith effect from June 25 2020.
28. BOARD EVALUATION
Pursuant to the provisions of the Act and the corporate governance requirements asprescribed by SEBI Listing Regulations annual evaluation of the performance of the Boardits Committees and of individual directors has been made.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors were carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The Nomination and RemunerationCommittee also reviewed the performance of the Board its Committees and of the Directors.
The criteria for performance evaluation of the Board included aspects like Boardcomposition and structure effectiveness of Board processes information and functioningetc. The criteria for performance evaluation of Committees of the Board included aspectslike composition of Committees effectiveness of Committee meetings etc. The criteria forperformance evaluation of the individual Directors included aspects on contribution to theBoard and Committee meetings like preparedness on the issues to be discussed meaningfuland constructive contribution and inputs in meetings etc. In addition the Chairperson wasalso evaluated on the key aspects of his role. The criteria for performance evaluation ofIndependent Directors included aspects like Invests time in understanding the company andits unique requirements; Brings in external knowledge and perspective to the table fordiscussions at the meetings; Expresses his / her views on the issues discussed at theBoard; and keeps himself/herself current on areas and issues that are likely to bediscussed at the Board level.
Criteria for Determining Qualifications Positive Attributes and Independence of aDirector
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the SEBIListing Regulations the Nomination and Remuneration Committee (NRC) has formulated thecriteria for determining qualifications positive attributes and independence ofDirectors the key features of which are as follows:
Qualifications - The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in theAct the Directors are expected to demonstrate high standards of ethical behaviorcommunication skills and independent judgment. The Directors are also expected to abide bythe respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets thecriteria laid down in Section 149(6) of the Act the Rules framed there under andRegulation 16(1)(b) of the SEBI Listing Regulations.
Familiarisation Programme for Independent Directors
Pursuant to Regulation 25(7) of the SEBI Listing Regulations and the requirement ofSecurities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 datedSeptember 15 2014 the Company has in place a programme for familiarisation of theIndependent Directors details of which are available on the website of the company:http://www.primefocus. com/investor-center#Results Reports.
29. NOMINATION AND REMUNERATION POLICY
The Company has in place a Nomination and Remuneration Policy for the Directors KeyManagerial Personnel Senior Management and other Employees pursuant to the provisions ofthe Act and Regulation 19 of the SEBI Listing Regulations.
The salient features and objectives of the Nomination and Remuneration policy are asfollows:
- To formulate the criteria and terms to determine qualifications attributes andindependence of Directors;
- To identify the qualification key attributes and profile required of persons who maybe appointed in Senior Management and Key Managerial positions;
- To determine remuneration of the Directors Key Managerial Personnel and SeniorManagement employees and other employees based on the Company's size of businessfinancial position and trends and practices prevailing in similar companies in theindustry;
- To devise mechanism and carry out evaluation of the performance of Directors;
- To devise and achieve diversity on the composition of Board an essential element tosupport quality of performance;
- To retain motivate and promote talent and create a sense of participation andownership;
- To carry out such other functions as is mandated by Board of Directors and performsuch other functions as may be necessary or appropriate for performance of duties.
Further the Nomination and Remuneration policy of the Company is available on thewebsite of the Company at http://www. primefocus.com/sites/default/files/pdf/NOMINATIONAND REMUNERATION POLICY.pdf.
30. BOARD MEETINGS
During the financial year under review Seven (7) Board Meetings were held the detailsof which are given in the Corporate Governance Report. The intervening gap between themeetings was within the period prescribed under the Act and Regulation 17 of SEBI ListingRegulations.
Currently the Board has Five (5) committees namely Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee Stakeholders'Relationship Committee and ESOP Compensation Committee.
During the year ended March 31 2020 a separate meeting of the Independent Directorswas held in compliance with the requirements of Schedule IV to the Act and Regulation 25(3) of the SEBI Listing Regulations.
Details of the composition of the Board and its Committees along with the Meetingsheld attendance of the Directors at such Meetings and other relevant details are providedin the Corporate Governance Report.
31. AUDIT COMMITTEE
The Audit Committee comprises of following members:
|Name of the Members ||Positions |
|Mr. Rivkaran Singh Chadha ||Chairman |
|Mr. Kodi Raghavan Srinivasan ||Member |
|Mr. Padmanabha Gopal Aiyar ||Member |
|Mr. Samu Devarajan ||Member |
|Mr. Jai Anshul Ambani * ||Member |
* Mr. Jai Anshul Ambani was appointed as a member in Audit Committee w.e.f. November14 2019.
Further details relating to the Audit Committee are provided in the CorporateGovernance Report.
32. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company Code of Conductor ethics policy. The Policy provides for adequate safeguards against victimization ofemployees who can avail the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Chairperson of the Audit Committee. The Audit Committee periodically reviewsthe functioning of this Mechanism. The policy of vigil mechanism is available on theCompany's website at http://www.primefocus.com/sites/default/files/pdf/WHISTLE BLOWERPOLICY.pdf.
The details of the Vigil Mechanism/ Whistle Blower Policy are given in the Report onCorporate Governance.
33. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to the Report as Annexure B.
In terms of Section 136 of the Act the Report and Accounts are being sent to themembers excluding the information on employees' particulars which is available forinspection by the Members at the Registered Office of the Company during the businesshours on all working days except Saturdays and national holidays upto the date of AnnualGeneral Meeting of the Company i.e September 30 2020. Any member interested in obtainingsuch particulars may write to the Company Secretary at the Registered Office of theCompany.
34. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted Corporate Social Responsibility Committee in compliancewith the provisions of Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014.
The Corporate Social Responsibility Committee comprises of following members:
|Name of the Members ||Positions |
|Mr. Rivkaran Singh Chadha ||Chairman |
|Mr. Naresh Mahendranath Malhotra ||Member |
|Mr. Samu Devarajan ||Member |
|Mr. Jai Anshul Ambani * ||Member |
*Mr. Jai Anshul Ambani was appointed as a member in CSR committee w.e.f. November 142019.
The brief outline of the CSR Policy of the Company alongwith the Annual Report on CSRactivities is set out in Annexure C of this report. The policy is available on theCompany's website at http:// www.primefocus.com/sites/default/files/pdf/CORPORATE SOCIALRESPONSIBILITY POLICY.pdf.
35. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans given Investments made Guarantees given and Securitiesprovided during the financial year under Section 186 of the Act are stated in the Notes toAccounts which forms part of this Annual Report.
36. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/ transactions entered by the Company with the RelatedParties during the financial period were on an Arm's length basis and were in compliancewith the applicable provisions of the Act and the SEBI Listing Regulations. There were nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All Related Party Transactions were entered into only with prior approval of the AuditCommittee except transactions which qualify under Omnibus approval as permitted under thelaw. A statement of all Related Party Transactions entered is placed before the AuditCommittee and Board for its review on a quarterly basis specifying the nature value andterms and conditions of the transactions.
Transactions of the Company with any person or entity belonging to thepromoter/promoter group which hold(s) 10% or more shareholding in the company are statedin the Notes to Accounts which forms part of this Annual Report.
The policy on Related Party Transactions which is available on the Company's website athttp://www.primefocus.com/sites/default/ files/pdf/RELATED PARTY TRANSACTION POLICY pdf.
Particulars of transactions with related parties referred to in Section 188 (1) asprescribed in Form AOC-2 under Rule 8(2) of the Companies (Accounts) Rules 2014 isenclosed as Annexure D.
37. BUSINESS RESPONSIBILITY REPORT
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment)Regulations 2019 the requirement of preparing Business Responsibility Report("BRR") had been extended to top 1000 companies (by market capitalizationcalculated as on March 31 of every financial year) with effect from December 26 2019which was initially applicable to top 500 listed companies. As the Company is one amongstthe top 1000 listed entities to comply with the aforesaid amendment the Board at itsmeeting held on July 31 2020 has approved its BRR.
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations the BRR of the Companydescribes the on environmental social and governance perspective in the prescribedformat is available as a separate section in the Annual Report.
38. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124 and other applicable provisions if any ofthe Act and Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Rules 2016 the Company has transferred 9485 shares in respect of whichdividend has not been paid or claimed for seven consecutive years or more to IEPFAuthority including shares held in unclaimed suspense account on November 30 2017. TheIEPF Authority till March 31 2020 transferred 200 equity shares against the claimsreceived by them from the shareholders.
The members whose unclaimed shares have been transferred to IEPF may claim the sameby making application to the IEPF authority in Form No. IEPF-5 available onwww.iepf.gov.in for details of unclaimed shares transferred to IEPF please refer company'swebsite viz. www.primefocus.com.
39. AUDITORS Statutory Auditors
At the Annual General Meeting held on September 30 2019 Deloitte Haskins & Sells(DHS) Chartered Accountants (Registration No. 117364W) were re-appointed as StatutoryAuditors of the Company for second term of 4 (Four) consecutive years to hold office fromthe conclusion of 22nd Annual General Meeting till the conclusion of AnnualGeneral Meeting of the Company to be held in the year 2023.
The Auditors Report for the Financial year 2019-20 does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A ofSEBI Listing Regulations M/s. D. M. Zaveri & Co. (CP No. 4363) Practicing CompanySecretaries has been re-appointed as Secretarial Auditor to undertake Secretarial Auditof the Company for the financial year 2019-20. The report of the Secretarial Auditor inthe prescribed Form MR-3 is annexed to this report as Annexure E.
The Secretarial Auditors' Report for the Financial year 2019-20 does not contain anyqualification reservation or adverse remark except that the appointment of Independentdirectors in material foreign subsidiary is still pending as per Regulation 24(1) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Board representsthat they are in process of compliance of the same.
In accordance with the SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 08 2019the Company has obtained the Annual Secretarial Compliance Report from the SecretarialAuditor for the financial year 2019-20. The same is also submitted to the Stock Exchanges.
40. COST RECORDS
Maintenance of Cost records as prescribed under Section 148 of the Act is not requiredby the Company.
41. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE ACT
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Act.
42. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuring compliances with theprovisions of section 134(3)(c) read with section 134(5) of the Act in the preparation ofthe annual accounts for the year ended on March 31 2020 and to the best of theirknowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at the March 31 2020 and of theprofit of the Company for that year on that date;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had laid down proper systems of internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively;
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
43. WHOLE-TIME DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION
In terms of Regulation 17(8) of SEBI Listing Regulations the Company has obtainedcompliance certificate from the Whole -Time Director and Chief Financial Officer.
Your Directors would like to express their sincere appreciation to its Membersfinancial institutions bankers and business associates Government authorities customersand vendors for their co-operation and support and looks forward to their continuedsupport in future. Your Directors also place on record their deep sense of appreciationfor the committed services by the employees of the Company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
| ||Naresh Mahendranath Malhotra ||Ramakrishnan Sankaranarayanan |
| ||Chairman & Whole-Time Director ||Director |
| ||DIN: 00004597 ||DIN: 02696897 |
|Date : July 312020 |
| || |