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PVP Ventures Ltd.

BSE: 517556 Sector: Infrastructure
NSE: PVP ISIN Code: INE362A01016
BSE 00:00 | 18 Aug 8.22 0.39
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NSE 00:00 | 18 Aug 8.15 0.35
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OPEN 8.22
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VOLUME 230657
52-Week high 10.05
52-Week low 4.18
P/E 1.82
Mkt Cap.(Rs cr) 201
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 8.22
CLOSE 7.83
VOLUME 230657
52-Week high 10.05
52-Week low 4.18
P/E 1.82
Mkt Cap.(Rs cr) 201
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PVP Ventures Ltd. (PVP) - Director Report

Company director report

To the Members

We are pleased to present the report on the business and operations of your Company forthe year ended March 31 2021.

1. Financial Results [RS. IN LAKHS]

STANDALONE

CONSOLIDATED

PARTICULARS 2020-21 2019-20 2020-21 2019-20
Total Income 1805.18 2928.50 1973.40 4452.19
Operational Administration and Other Expenses 428.59 834.94 4354.21 6446.38
Profit/(Loss) Before Depreciation Interest And Tax 1376.59 2093.56 (2380.81) (1994.19)
Depreciation 70.89 86.83 196.33 246.22
Interest and Finance Charges 2781.08 2918.04 6131.28 6912.06
Profit/(Loss) Before Exceptional Items (1475.38) (911.31) (7493.05) (9152.47)
Exceptional Items - - (569.08) (87.44)
Profit/(Loss) Before Tax (1475.38) (911.31) (8062.13) (9065.03)
Tax Expense - 270.05 - 270.45
Profit/ (Loss) after Tax (1475.38) (1181.36) (8062.13) (9335.48)
Other Comprehensive Income 4.38 2.24 7.01 7.36
Total Comprehensive Income (1471.00) (1179.12) (8055.12) (9328.12)
Basic and Diluted (0.60) (0.48) (3.29) (3.83)

2. State of the Company's Affairs

During the financial year 2020-21 the Company reported profit on Standalone basis andlosses on consolidated basis. The revenue from operations for the FY ended 31 March 2021on Standalone basis is Rs. 1753.10 Lakhs as compared to the previous year's total of Rs.2900.45 Lakhs.

3. Dividend

In view of the losses occurred in so many years and in order to conserve the resourcesof the Company for future Business operations the Board of Directors did not recommendany dividend for the financial year ended March 31 2021.

4. Transfer to Reserves

The Board of Directors did not propose to transfer any amount to reserves for theperiod under review.

5. Capital Structure

During the year there is no change in the capital structure of the Company.

6. Debenture

The total debentures outstanding as on the March 31 2021 is 500 14.5% Redeemablefully convertible Debentures (FCD's) of Rs. 100000/- each and the 1215 18% SecuredRated Listed Redeemable Non-Convertible Debentures (NCD's) of Rs.1000000 each.

7. 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.

8. Public Deposits

The Company has not accepted/renewed any fixed deposits during the year under review.

9. Insurance

All the properties of your Company have been adequately insured.

10. Related Party Transactions

In line with the requirements of the Companies Act 2013 and erstwhile ListingAgreement and the current Listing Agreement signed with the stock exchanges pursuant tolisting regulations your company has formulated a Policy on Related Party Transactionswhich is also available on the Company's website athttp://www.pvpglobal.com/pdf/RPTPolicy-PVPI .pdf. The policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and the Related Parties.

During the year under review there were no Related Party Transactions. Accordinglythe disclosure of Related Party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable for the year ended March 31 2021.

During the year the Company had not entered into any contract/arrangement/transactionswith Related Parties which could be considered as material in terms of Regulation 23 ofthe SEBI (LODR) Regulations 2015. In accordance with Accounting Standard 24 the RelatedParty Transactions are disclosed under Note No. 43 of the Standalone Financial Statements.

11. Significant Orders and Matters:

During the financial year of the Company-

11.1 The Company has filed the application before SEBI Securities Appellate Tribunal("SAT") Mumbai. The SAT dismissed the appeal filed by the Company. The Companyhas paid the fine imposed by The BSE Limited on April 052021 and filed an applicationbefore BSE Limited for Revocation of Suspension of trading in Securities of the Company.

The BSE Limited and National Stock Exchange of India Limited have revoked thesuspension on trading of Securities of the Company with effect from July 22 2021.

11.2 The Company was inspected under section 206 of the Companies Act 2013 in Jan 2016and we received letter dated 22.7.2017 from the Inspecting officer for violation ofSections 193 (1) 211 209 372 A of the Act 1956 and Section 134 and 129 of the Act2013 respectively. The Registrar of Companies ("RoC") in letter dated02.04.2019 intimated the Company that Ministry has sanctioned prosecution for theviolations and advised for Compounding. Thus the Company has filed the CompoundingApplications under the provisions of Section 441 of the Companies Act 2013 before TheRegional Director (Southern Region) Ministry of Corporate Affairs Chennai and paidCompounding fees.

Further the Company received Notice for Adjudication hearing on November 112020 onthe matter of Section 118 read with Section 145 of the Companies Act 2013. The matter washeard on that day. The registrar of Companies Tamil Nadu issued Adjucation Order forpenalty to Pay Rs.25000/- for Company and Rs. 5000 for Mr. Prasad V. Potluri Chairmanand Managing Director of the Company. The Company and Mr. Prasad V. Potluri was made thepayment of Penalty.

11.3 The Company had received an order dated March 27 2015 from Securities &Exchange Board of India ('SEBI'). An adjudicating officer of SEBI had imposed monetarypenalty of Rs.15 lakhs each against PVP Ventures Limited ("Company") and Mr.Prasad V. Potluri Chairman and Managing Director ("Mr. Prasad") (aggregatingRs. 30 lakhs) for alleged non-disclosures under SEBI (Substantial Acquisition of Sharesand Takeovers) Regulations 1997 ("SAST Regulations") and SEBI (Prohibition ofInsider Trading) Regulations 1992 ("PIT Regulations"). ("Non-DisclosureOrder")

Further the adjudicating officer of SEBI by an order dated March 27 2015 imposedpenalty of: i) Rs.15 crores each on PVP Global Ventures Private Limited("Wholly-Owned Subsidiary") and Mr. Prasad (aggregating Rs. 30 crores) foralleged violation of PIT Regulations during period 2009-10 and ii) Rs. 15 lakhs each onthe Wholly-Owned Subsidiary and Mr. Prasad for non-disclosures required under the SASTRegulations (aggregating Rs. 30 lakhs). ("Insider Order")

The Wholly-Owned Subsidiary the Company and Mr. Prasad ("Appellants")challenged both the above orders before the Securities Appellate Tribunal("SAT").

The SAT by an order dated June 20 2018 dismissed the appeal against and upheld theNon-Disclosure Order upholding the penalty of Rs. 30 lakhs.

In relation to the Insider Order the SAT: i) set aside entirely the penalty of Rs. 15lakhs each on the Wholly-Owned Subsidiary and Mr. Prasad; and ii) reduced the penalty ofRs. 15 crores against Mr. Prasad to Rs. 5 crores while upholding the penalty of Rs. 15crores on the Wholly-Owned Subsidiary ("SAT Order"). Thus the SAT Order reducedthe aggregate penalty of Rs. 30 crores plus Rs. 30 lakhs to Rs. 20 crores.

The overall penalty as per the SAT Order is therefore Rs. 20 crores plus Rs. 30 lakhs.

The SAT by another order dated July 6 2018 stayed the operation of the SAT Order fora period of six weeks from July 6 2018 subject to deposit of certain title deeds by theAppellants.

Thereby PVP Global Ventures Pvt Ltd. on July 6 2018 submitted the title deeds oflands admeasuring 53.08 acres of its wholly owned subsidiary Company i.e. Arete RealEstate Developers Private Limited and Expression Real Estate Developers Private Limitedunderlying the Appeals in terms of the order passed by SAT for Rs. 203000000 for whichthe asset worth approximately Rs. 210000000 are being provided as security.

The Company has paid Rs. 2179082/- as on December 07 2018 and requested to releaseall the Bank accounts and Demats Accounts. With respect to the Interest element the Hon.Supreme Court in its order dt. 12th July 2019 has stayed the recovery of Interest onPenalty.

The penalty imposed to Mr. Prasad V. Potluri Chairman & Managing Director of theCompany The Securities Exchange Board of India agreed for equated payment of Rs.85 Lakhsper Month for 24 months to settle the penalty amount as per Order by Hon'ble High Court onTelangana dated 24-04-2021.

12. Material changes and commitments affecting financial position between the end offinancial year and date of report- Nil.

13. Subsidiary Companies

The Company along with its subsidiaries is operating in the verticals of UrbanInfrastructure Media and Entertainment and retail customer services. As on March 312021 the Company has 4 wholly-owned subsidiaries viz. PVP Corporate Parks PrivateLimited PVP Global Ventures Private Limited PVP Media Ventures Private LimitedSafetrunk Services Private Limited besides 2 subsidiaries viz. New Cyberabad CityProjects Private Limited Picturehouse Media Limited and 4 stepdown subsidiaries viz.Adobe Realtors Private Limited Arete real Estate developers Private Limited andExpression real Estate developers Private Limited which is a wholly-owned subsidiary ofPVP Global Ventures Private Limited and PVP Capital Limited PVP Cinema Private Limitedwhich are wholly-owned subsidiaries of Picturehouse Media Limited. Further as on March31 2021 the company did not have any Associate Companies.

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.pvpglobal.com. These documents will also available for inspection during the businesshours at the registered office of the Company and any member who wish to get copies ofsuch financial statements may write to the Company for such requirement.

14. Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review is presented in aseparate section forming part of the Annual Report.

15. Corporate Governance

Your Company is committed towards maintaining high standards of Governance. The Reporton Corporate Governance as stipulated under Schedule V of the Listing RegulationsShareholders Information together with a Corporate Governance Compliance Certificate fromMr. PAP Murthy Practicing Company Secretary confirming compliance forms an integral partof this Report.

16. Board of Directors and Key Managerial Personnel

16.1 During the financial year following appointments and Re-appointment's took place:

• Mr. Nandakumar Subburaman (DIN.00611401) was appointed as an IndependentDirector by the Shareholders in the Previous Annual General Meeting of the Company held on11.12.2020 who shall hold office for 5(Five) consecutive years i.e. till Annual GeneralMeeting to be held for the FY 2024-25.

• Ms. P J Bhavani (DIN.08294839) was appointed as Woman Director underNon-Executive and Non-Independent Director by the Shareholders in the Previous AnnualGeneral Meeting of the Company held on 11.12.2020 who shall be liable for retirement byrotation during the tenure of her office.

• Mrs. Ramyanka Yadav. K was appointed as the Company Secretary & ComplianceOfficer w.e.f 31.07.2020

• Mr. Karthikeyan Shanmugam was appointed as Chief Financial Officer of theCompany with effect from November 06 2021.

Board of Directors recommends the above stated appointments of Directors and briefprofile of them is given in the Explanatory statement and Corporate Governance reportattached to this report.

16.2 Resignation:

• Mrs. Sai Padma Potluri was resigned from the Board of the Company with effectfrom June 01 2020.

• Mr. T N Madan Chief Financial Officer of the Company was resigned from theposition with effect from October 26 2020.

There is no other change in the Key Managerial Personnel except the above.

17. Training and familiarization programs and Annual Board Evaluation process

The details of training and familiarization programs and Annual Evaluation process ofthe Board its Committees and of individual directors for directors have been provided inthe Nomination Remuneration & Performance Evaluation Policy annexed with this 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://www.pvpglobal.com/pdf/PVP-N&RCommPolicy.pdf.

18. Compositions of Board Committees are specified as per the date of Director'sreport.

Audit Committee
Mr. N. S. Kumar Chairman
Mr. Sohrab Chinoy Member
Mr. Prasad V. Potluri Member
Nomination and Remuneration Committee
"Mr. Sohrab Chinoy Chairman
"Mr. N. S. Kumar Member
Mr. Subramanian Parameswaran Member
Stakeholders Relationship Committee
"Mr. Sohrab Chinoy Chairman
""Mr. N. S. Kumar Member
Mr. Prasad V. Potluri Member

"Mr. Sohrab Chinoy Kersasp - Member till 05-11-2020 ""Mr. N S Kumar -Chairman till 05-11-2020

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.

19. Number of Meetings of the Board

The Board met 4 (Four) times through Video Conference during the financial year andthe details of which are given in the Corporate Governance Report that forms part of thisAnnual Report. The intervening gap between any two meetings was well within the periodprescribed under the provisions of the Companies Act 2013.

Note: Wherever the required Limit of gap between two Meetings exceeded is due toand as per the Notification issued by the Statutory Authorities like Ministry of CorporateAffairs and Securities Exchange Board of India (SEBI) in view of the COVID-19 issued timeto time.

20. 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 2021the 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 judgments 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.

21. 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.

22. Auditors

21.1 Statutory Auditor

As per provision of Section 139 of the Act M/s. Sundaram & Srinivasan CharteredAccountants (FRN: 004207S) were appointed as Statutory Auditors of your Company to holdoffice until the Conclusion of 26th Annual General Meeting.

22.1.1 Auditors' Report & Management Response on the Qualification made bystatutory auditors:

The Auditors' Report for the financial year 2020-21 is a "qualified report'' forthe both standalone and consolidated financial statements.

Auditors Qualification:

Standalone:

1. Attention is invited to note no. 34 of standalone financial statements in relationto investment in equity shares including deemed investment in three subsidiaries. Thecarrying value is Rs. 58098.85 lakhs. This is after provision of Rs. 35160.16 lakhs fordiminution in value. The Board is of the view that considering the market value of theassets and expected cash flows in future from the business of these subsidiary companiesthe provision for diminution already made is adequate. However considering erosion in thenet worth of the subsidiary companies and their dependence on the holding company tocontinue as a going concern absence of cash inflow delay in commencement of projects andother related factors indicate the existence of material uncertainty in the ability of thecompany to make progress.

Therefore we are of the view that the carrying amounts of the investments (includingdeemed investment) shall be restated for their realisability by making additionalprovision taking cognizance of erosion in the net worth of the investee/loanee companiesand also taking into consideration their inability to continue as a going concern.However it is difficult to measure the extent of further diminution and fair value. Theprovision short made on this score is also not ascertainable.

2. The Company has mortgaged its land situated at Perambur Chennai as a security andalso furnished corporate guarantee to a bank for the borrowings made by PVP CapitalLimited Chennai (i.e. wholly owned step-down subsidiary company) amounting to Rs. 10000lakhs. The outstanding amount as per the books of accounts as on March 31 2021 includinginterest due is Rs 20012.67 lakhs. The loanee i.e. PVP Capital Limited has not adheredto repayment schedule of principal and interest dues to its bank consequent to which thebank filed for recovery of its dues before the Debt Recovery Tribunal (DRT) and alsoinitiated recovery proceedings against the company under Securitization and Reconstructionof Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act 2002).Further the lender bank has taken possession of mortgaged lands and issued sale noticefor e-auction of the property given by the ultimate holding company as corporateguarantee but there were no bidders. We were informed by the Board that the subsidiaryviz. PVP Capital Limited is in negotiation with the said bank for one time settlement(OTS). The Board of PVP Ventures Ltd also asserts that no provision is required to be madeto the carrying value as it is confident that the payment obligation by the PVP CapitalLimited will be met in due course. But in our view the carrying value of the relevantmortgaged assets is dependent on the repayment of the loan by the PVP Capital Limited.Under these circumstances we are unable to express our view whether the company isjustified in carrying the assets that have been mortgaged where the loanee has alreadydefaulted and similarly whether the company is justified in not taking cognizance offinancial obligation that may devolve on the company in case the corporate guarantee isinvoked. Accordingly the company should have considered carrying value of the said assetand/or guarantee furnished as an obligation as per Ind AS 109 while preparing thefinancial statements.

On the basis of above facts the loss for the year ended March 31 2021 is understatedto this extent. However it is difficult to measure the extent of understatement of lossin the circumstances obtaining. (Refer Note No. 46(ii)(a))

3. Attention is invited to note no. 31(a) & 31(b) to the standalone financialstatements which explains the Board's view regarding defaults committed in redeeming thedebentures and payment of interest as per the schedule of redemption/payment.

Though the board has obtained an extension till 30th June 2021 from thedebenture holder vide letter dated 08th February 2021 to pay the outstandingwe are of the opinion that such extension of time granted by the debenture holder withrespect to repayment of principal and interest (covering all the defaults happened up to31st March 2020) with retrospective effect will not prevent disqualificationof directors from section 164(2)(b) of the Companies Act 2013.

Consolidated:

1. Attention is invited to note no. 36 to the Consolidated Financial Statements theCompany has mortgaged its land situated at Perambur Chennai as a security and alsofurnished corporate guarantee to a bank for the borrowings made by PVP Capital LimitedChennai (i.e. wholly owned step-down subsidiary company) amounting to Rs. 10000 lakhs.The outstanding amount as per the books of accounts as on March 31 2021 includinginterest due is Rs 20012.67 lakhs. The loanee i.e. PVP Capital Limited has not adheredto repayment schedule of principal and interest dues to its bank consequent to which thebank filed for recovery of its dues before the Debt Recovery Tribunal (DRT) and alsoinitiated recovery proceedings against the company under Securitization and Reconstructionof Financial Assets and Enforcement of Security Interest Ac 2002 (SARFAESI Act 2002).Further the lender bank has taken possession of mortgaged lands and issued sale noticefor e-auction of the property given by the ultimate holding company as corporateguarantee but there were no bidders. We were informed by the Board that the subsidiaryviz. PVP Capital Limited is in negotiation with the said bank for one time settlement(OTS). The Board of PVP Ventures Ltd also asserts that no provision is required to be madeto the carrying value as it is confident that the payment obligation by the PVP CapitalLimited will be met in due course. But in our view the carrying value of the relevantmortgaged assets is dependent on the repayment of the loan by the PVP Capital Limited.Under these circumstances we are unable to express our view whether the company isjustified in carrying the assets that have been mortgaged where the loanee has alreadydefaulted and similarly whether the company is justified in not taking cognizance offinancial obligation that may devolve on the company in case the corporate guarantee isinvoked. Accordingly the holding company should have considered carrying value of thesaid asset and/ or guarantee furnished as an obligation as per Ind AS 109 while preparingthe financial statements. On the basis of above facts the loss for the year ended March31 2021 is understated to this extent. However it is difficult to measure the extent ofunder-statement of loss in the circumstances obtaining.

2. Attention is invited to note no. 33(a) & 33(b) to the Consolidated FinancialStatements which explains the management view point and understanding of the implicationsarising on account of defaults committed in redeeming the debentures and repayment ofinterest as per the schedule of redemption/ payment. Though the Board has obtained anextension till 30th June 2021 from the debenture holder vide letter dated 08thFebruary 2021 to pay the outstanding. we are of the opinion that such extension of timegranted by the debenture holder with respect to repayment of principal and interest(covering all the defaults happened up to March 31 2020) with retrospective effect willnot prevent disqualification of directors under section 164(2)(b) of the Companies Act2013.

3. Attention is invited to note no. 34 to the Statement in relation to advances madefor film production (including interest accrued of Rs. 1324.37 lakhs) amounting to Rs.3895.29 lakhs by one of its subsidiaries whose realisability is significantly dependenton timely completion of production of films and the commercial viability of the filmsunder production etc. The holding company's Board is of the view that advances can berealised at the time of release of the movies and accordingly the company is confident ofrealizing the entire amount of loans with interest and does not foresee any erosion incarrying value. We are not provided with any documentary evidence as regards Board'sassertion that the carrying amount of loans made have not suffered any erosion as on March31 2021. No evidence was adduced regarding the status of production of films. Nor wasconfirmation produced from the loan debtors. Consequently we are unable to determinewhether any impairment to the carrying amounts of advances were necessary and to thisextent loss for the year ended March 31 2021 is understated.

4. Attention is invited to note no. 35 to the Statement in relation to inventory i.e.films production expenses amounting to Rs. 4995.64 lakhs mainly consists of advancesgranted to artists and co-producers. As the films have not commenced and/or completed theadvances made continued to be carried as inventory. However the Board of the holdingcompany states that it is evaluating options for maximum utilization of these payments. Inthe absence of tangible evidence towards commencement and/or completion of production offilms and also in the absence of confirmation of balances from the parties we are unableto agree with the views of the Board. We are of the opinion that realisation ofinventories is doubtful but we are also unable to decide the quantum of loss that mayarise on account of write down of inventory.

5. The independent auditor of subsidiary company viz. PVP Capital Limited in theirauditor's report on the financial statements for the year ended 31st March2021 have drawn Qualified conclusion in the following matter.

a. Attention is invited to note no. 36 to the Consolidated Financial Statement whichindicates that the Company has not adhered to the repayment schedule for the principaland interest dues to the Bank consequent to which the Bank has filed for recovery of itsdues before the Debt Recovery Tribunal (DRT) and also initiated recovery proceedings underSecuritization and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 (SARFESI Act 2002). Further the Bank has taken over symbolic possession of theimmovable property and issued sale notice for e-auction of the property given by theultimate holding company as corporate guarantee. The outstanding amount is Rs. 20012.67lakhs as per the books of account as at 31st March 2021.

Further the Company is currently pursuing the realization of dues to the Company andother than this the Company is not carrying any business activity. The regulatoryauthority may cancel the registration to carry the principal business activity as aNon-Banking Finance Company due to non-maintenance of minimum net owned fund of Rs. 200lakhs as stated in the said note to the financial statement. The Company's inability tomeets its financial statements non-payment of statutory dues and in absence of visualcash flows doubts are cast on the ability of the Company to continue as a going concernto achieve its future business plans. Taking into consideration the pending legal outcomesof the legal proceedings as well as liquidity constraints we are unable to express ourview whether it is appropriate to treat the Company as a going concern. However based onthe management's assertions that the Company's financial statements have been prepared onthe basis of going concern and the impact if any if it were to be treated as a goingconcern is not ascertainable at this stage.

b. Attention is invited to note no. 37 to the consolidated Financial Statements inrelation to the loans for film production amounting to Rs. 15381.04 lakhs whoserealisability is significantly dependent on timely completion of the production of thefilms and the commercial viability of the films under production etc. The Management hasassessed the recoverability of the loan amount and accordingly made a provision of Rs.13889.46 lakhs as at 31st March 2021. However the Management is unable toprovide the status of the production of the recoverability of the whole amount. filmsHence we are unable to determine whether the said provision is adequate or not.

6. The independent auditor of subsidiary company viz. PVP Cinema Private Limited hasdrawn Qualified conclusion in the following matter which is reproduced as under:

Interest on unpaid income tax for FY 2008-09 till date aggregating to Rs. 9.50 lakhs isnot accounted. The accumulated loss is short by this amount.

7. The independent auditor of subsidiary company viz. PVP Global Ventures PrivateLimited has drawn Qualified conclusion which is reproduced below

We invite attention to Note No. 11.1 regarding advance of Rs. 10366.39 lakhs (PY: Rs.10321.29 lakhs) given for acquisition of land. The long duration of outstanding of theseadvance and other factors like low probability of availability of a big chunk of landindicate the existence of uncertainty on the eventual realisability of these advance.

We invite attention to the fact that the Company has advanced Rs. 3389.09 lakhs (PY:Rs. 3434.19 lakhs). This has been classified under long term advance. The long duration ofoutstanding of these advance and other factors like nonpayment of interest indicate theexistence of uncertainty on the eventual realisability of these advance. However thisyear Rs. 847.27 lakhs has been provided for Expected Credit Loss. The financial impact ifany due to non-realisability is not ascertainable at this stage.

Management Comments on the above qualification:

1. The Company has made investment in the Subsidiary Companies on a long-term basiswith an intension to expand its business vicinity through its subsidiary companies.Considering the business potential of these companies expected future generation ofrevenues cash flows expected development of these projects and the market value of theassets of the subsidiaries the company is of the view that the provisions already createdare sufficient and there is no requirement to create further provisions in the books ofaccounts.

2. The Company has given a corporate guarantee to its Step-down Subsidiary Company PVPCapital Limited (PVPCL) which has not adhered to repayment schedule of principal andinterest dues to a bank consequent to which the bank has filed a case for recovery of thedues before the Debt Recovery Tribunal (DRT) amounting to Rs. 20012.67 lakhs (includesinterest) along with consequent interest and costs thereon as on 31st March 2021. Furtherthe bank has initiated SARFAESI proceedings and has taken symbolic possession of securedimmovable property of the Company under Securitisation and Reconstruction of FinancialAssets and Enforcement of Security Interest Act 2002 (SARFAESI) and issued an e-auctionsale notice. There were no bidders for the aforesaid sale notice and consequently thee-auction sale proceedings have become infructuous. Further PVPCL has applied for OneTime Settlement to the bank and confident to settle the same.

3. The Company is of the view that loans and advances can be realized at the time ofrelease of the movies andaccordingly the company is confident of realizing the entireamount of loans with interest and does not foresee anyerosion in carrying value. Thecompany is confident of realizing the value at which they are carried notwithstandingtheperiod of outstanding.

4. 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.

5. The Company has defaulted on repayment of interest and loans aggregating Rs.20012.67 lakhs which are payable on demand. Due to market condition in film industry thecompany's borrowers did not meet their payment obligations and hence the above default.The company is contemplating to close the loan by way of One Time Settlement (OTS) to theBank and is confident to settle the same.

6. a) The Company has a loan book of Rs. 15381.04 lakhs given to various filmproducers. Due to significant delay in completing the films the Company's Borrowers didnot service the interest and loan repayment. Consequently the company has made aprovision of Rs. 13889.46 lakhs as on 31st March 2021 for the expected credit loss.

a) Management asserts that no adjustment to the carrying value is required as it isconfident by considering the aspects like recovery from the borrowers and other resourcesto bring in additional cash flows to meets it obligations.

7. The Company has given advance to acquire land for the proposed power projects. TheCompany is confident of acquiring the land against the advances. The Company doesn'tforesee any erosion in carrying value of advances.

8. The management shall accrue the said interest in upcoming quarter in books ofaccounts.

Note:1) All the recommendations made by the Audit Committee and Nomination andRemuneration Committee are taken on record and accepted by the Board of Directors.

2) The Statement of Impact of Auditors Qualifications for the year ended 31st March2021 as per Regulation 34 (2) (a) of SEBI (LODR) Regulations 2015 can be navigated via https://www.pvpglobal.com/other-statutory-information/

21.2 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 Mr. PAP Murthy Practicing Company Secretary to undertake theSecretarial Audit of PVP Ventures Limited and New Cyberabad City Projects Private Limited.

The Secretarial Audit Report forms part of the Annual Report as Annexure-2 of theBoard's Report.

Secretarial Auditors Qualifications:

a. The Company did not submit the related party transactions on a consolidated basis asrequired under Regulation 23(9) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015for the half year ended31.03.2020 with the stock exchange within 30 days from the publication of financialresults. The Company submitted the same on 31.08.2020 for the financial results publishedon 31.07.2020.

b. The Company had to give prior intimation as per Regulation 29 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 read with Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/63 dated April 17 2020 about themeeting of Board of Directors in which the quarterly/annual financial results were to beconsidered for the period ended 31.03.2020 atleast 2 days in advance excluding the date ofthe intimation and date of the meeting. However the same was intimated to Stock Exchangeon 29.07.2020 for the Board meeting held on 31.07.2020.

c. As per Regulation 30read with Schedule III Part A Para A sub clause 7A ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company was required to give intimation to stock exchange aboutresignation of Statutory Auditors vide resignation letter dated 20.10.2020 which wasreceived on 05.11.2020 within 24 hours of the receipt of resignation. However this wasintimated on 11.12.2020. Further the Company has not obtained the resignation in theformat as prescribed in SEBI Circular CIR/CFD/CMD1/114/2019 dated October 18 2019.

d. As per Regulation 34(2)(a) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company was required toprovide the Statement on Impact of Audit Qualifications in its Annual Report for the yearended 31st March 2020 but the same has not been provided.

e. The Company has not included part of the information in Management Discussion andAnalysis Report forming part of Annual Report for the year ended 31st March 2020 asrequired under Regulation 34 read with Para B of Schedule V of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015

f. The Company was required to provide information as per the Regulation 36(5) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as a part of explanatory statement to the notice of Annual GeneralMeeting (AGM) where the Statutory Auditor is proposed to be appointed but the same has notbeen provided.

g. The Company did not publish the details in the newspapers as per Regulation 47 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 read with Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12 2020with respect to:

> Notice of the Board Meeting held on 31.07.2020 in which financial results for theperiod ended 31.03.2020 were considered.

> Financial results for the period ended 31.03.2020.

h. As per Regulation 50(1) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company was required togive prior intimation to stock exchange at least 11 working days before the date on whichthe amount of interest/redemption of Non - Convertible Debentures (NCDs) is due but thesame was intimated on:

> 22.09.2020 for 386 NCD's which was due for payment on 30.09.2020

> 31.10.2020 for 829 NCD's which was due for payment on 31.10.2020

> 19.03.2021 for 386 NCD's which was due for payment on 31.03.2021

i. As per Regulation 52(5) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company was required tosubmit a certificate to stock exchange obtained from debenture trustee within 7 workingdays from the submission of Half year financial results but the same was submitted on31.12.2020 for the half year ended 30.09.2020 results of which were published on06.11.2020.

j. As per Regulation 55 of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company was required to obtain a reviewof credit rating with respect to NCD's. However the same was not obtained during thereview period.

k. The Company did not obtain a certificate for maintenance of 100% asset cover asrequired under Regulation 56(1)(d) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 for the half year ended

> 31.03.2020 from a Practising Chartered Accountant/ Practising Company Secretary

> 30.09.2020 from the Statutory Auditor

l. As per Regulation 57(1) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company was required tosubmit a certificate to the stock exchange that it has made timely payment ofinterest/principle within 2 days of amount becoming due but the company has submitted thesame on :

> 05.01.2021 for 386 NCDs for the payments due on 31.12.2020

> 04.05.2020 for 829 NCDs for the payments due on 30.04.2020

Also the company has not made any intimation w.r.t. payments for the 829 NCD's due on31.07.2020 and 31.01.2021.

m. As per Regulation 60 of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company was required to give intimationto the stock exchange about the record date at least 7 working days in advance (excludingthe date of intimation and the record date). However the Company intimated the same tostock exchange on:

> 15.04.2020 for 829 NCDs for the record date 20.04.2020

> 12.06.2020 for 386 NCDs for the record date 22.06.2020

> 13.07.2020 for 829 NCDs for the record date 22.07.2020

> 22.09.2020 for 386 NCDs for the record date 29.09.2020

> 31.10.2020 for 829 NCDs for the record date 30.10.2020

> 19.03.2021 for 386 NCDs for the record date 30.03.2021

n. As per regulation 74(5) of SEBI (Depository Participants) Regulations 2018 theCompany was required to file the certificate issued by RTA with the Stock Exchanges.However the Company has not filed the same for the quarter ended 31.03.2020.

o. As per Regulation 9 of Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015 read with Schedule B the Company did not intimate tostock exchanges the details of closure of trading window for the quarter ended 31.03.2020and for the quarter ended 31.12.2020 the intimation was made on 06.01.2021.

p. The Company did not file the annual disclosure with regard to entity identified as aLarge Corporate as per Circular No.SEBI/ HO/DDHS/CIR/P/2018/144 dated November 26 2018 tothe stock exchanges within prescribed/extended timelines. The Company filed the same on08.07.2020.

Management Response on Secretarial Auditors Qualification:

a) The qualifications of Secretarial Auditors pertaining to delay in filing of reportsand submissions have been noted by the Company and the Company assure to follow the samein future.

b) For point (c) the management was very keen in negotiating with the previous Auditorregarding their proposal to resignation from the Company creating the Casual Vacancyhence the delay occurred. The delay occurred will avoided in future in such matters.

23. 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.

24. 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.

25. Stock Exchange Listing/ Listing Fees payment

Presently the Equity Shares of the Company are listed on the (BSE Limited) andNational Stock Exchange of India Limited.

26. Chairman & Managing Director and Chief Financial Officer Certification

As required under the SEBI Guidelines the Chairman and Managing Director and the ChiefFinancial Officer Certification is attached to this Report.

27. Annual Return

In accordance with Section 134 (3)(a) of the Companies Act 2013 Annual Return in theprescribed format is available on website of the Company www.pvpglobal.com.

28. 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 authorised recorded and reported correctly. This is commensurate withthe nature of business and the size and complexity of the company's operations.

The real estate industry is passing through a challenging phase and the Company is noexception. The top management of the Company to utilize the available resourcesefficiently has decided to engage itself more with the operations of the Company. TheCompany is further enhancing/ strengthening the internal financial reporting with respectto significant business control risk management processes etc. The Company's internalcontrols are further supplemented by internal audits management review and documentedpolicies procedures & guidelines

The company has systems policies and process in place pertaining to the InternalControl over the investments and advances in its subsidiaries. The Company is alsoextending the financial and strategic support to recover the investments and advances madeto subsidiaries considering the market value of the assets and expected cash flows.

29. 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 listing Regulations the Company has a Whistle Blower Policyframed to deal with instances of fraud and mismanagement if any genuine grievances to theappropriate authority.

The Company has a Whistle Blower Policy framed to deal with instances of fraud andmismanagement if any. The details of the Policy are explained in the Corporate GovernanceReport and also posted on the website of the Company www.pvpglobal.com . During the yearunder review the Company has not received any complaint(s) under the said policy.

30. Corporate Social Responsibility (CSR)

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 onwebsite of the company.

31. 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.

32. Risk Management Policy

The Company has risk management policy in place which mitigates the risk at appropriatesituations and there are no elements of risk which in the opinion of Board of Directorsmay jeopardize the existence of the Company.

33. 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.

34. 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.

The following is a summary of sexual harassment complaints received and disposed offduring financial year ended March 31 2021:

• No. of complaints received : Nil
• No. of complaints disposed off : Nil

35. Conservation of Energy Technology Absorption and Foreign Exchange Earning/Outgo

Disclosures pertaining to conservation of energy technology absorption foreignexchange earnings and outgo are not applicable to your company during the year underreview.

36. Acknowledgements

Your Directors wish to express their appreciation for the support and co-operationextended by the bankers financial institutions joint development partners shareholdersgovernment agencies and other business associates. Your Directors wish to place on recordtheir deep sense of appreciation for the committed services by the employees of theCompany.

For and on behalf of Board of Directors
Sd/- Sd/-
Place: Chennai Prasad V. Potluri N S Kumar
Date: August 11 2021 Chairman & Managing Director Director

.