We are pleased to present the report on the business and operations of your Company for the yearended March 31, 2024
PARTICULARS
STANDALONE
CONSOLIDATED
Summary of Statement of Profitand Loss:
2023-24
2022-23
Total Income
49.40
1,379.09
763.16
1,579.09
Operational, Administration, and OtherExpenses
158.66
1,912.54
198.15
2,552.79
Profit/(Loss) Before DepreciationInterest and Tax
(109.26)
(533.45)
565.01
(973.7)
Depreciation
5.44
26.64
5.54
27.21
Interest and Finance Charges
7.47
5.88
625.01
246.54
Profit / (Loss) Before ExceptionalItems
(122.17)
(565.97)
(65.55)
1,247.45
Exceptional Items
-
1,425.63
2,1771.91
Profit / (Loss) Before Tax
(1,991.6)
20,554.47
Tax Expense
8.89
50.42
Other Comprehensive Income
1.12
(0.17)
Profit/ (Loss) after Tax
(121.05)
(2,000.66)
20,503.88
Basic and diluted
(0.23)
(3.83)
(0.13)
39.24
During the financial year 2023-24, the turnover of the company decreased from Rs. 1379.09 lakhs to Rs.49.40 lakhs.
During the financial year 2023-24, there was no change in the nature of the Company's business.
In view of the losses incurred by the Company during the year, the Board of Directors did not proposeto transfer any amount to reserves for the period under review.
In view of the losses incurred and in order to conserve the resources of the Company, for future Businessoperations, the Board of Directors did not recommend any dividend for the financial year ended March31, 2024.
During the year, there was no change in the capital structure of the Company.
The Company did not accept any deposits from the public within the meaning of Chapter V of the Act,2013, read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2024.
All the properties of the Company have been adequately insured.
Loans, guarantees, and investments covered under Section 186 of the Companies Act, 2013 form partof the Note No. 52 to the financial statements provided in this Annual Report.
All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prioromnibus approval of the Audit Committee was obtained for the transactions that are foreseen andrepetitive. For all the transactions entered pursuant to the omnibus approval so granted, a statementgiving details of all such transactions is placed before the Audit Committee for their approval on aquarterly basis. The policy on Related Party Transactions as approved by the Board is posted on theCompany's website www.pvpcinema.com in accordance with Accounting Standard 18, the Related PartyTransactions are disclosed in the notes to accounts of the Standalone Financial Statements.
The company in the board meeting held on 28th Aug 2023 had approved the acquisition of 81% stakein New Cyberabad City Projects Private Limited from PVP Ventures Limited for a consideration ofRs.32.56 Crs. The Shareholders approval for the same was obtained by postal ballot dated 31st Aug,2023. Pursuant to this acquisition the company has become a material subsidiary.
14. DETAILS OF ANY DIRECTOR WHO IS IN RECEIPT OF ANY COMMISSION FROM THE COMPANYAND WHO IS A MANAGING OR WHOLE-TIME DIRECTOR OF THE COMPANY SHALL NOT BEDISQUALIFIED FROM RECEIVING ANY REMUNERATION OR COMMISSION FROM ANYHOLDING COMPANY OR SUBSIDIARY COMPANY OF SUCH COMPANY SUBJECT TO ITSDISCLOSURE BY THE COMPANY IN THE BOARD'S REPORT-Not Applicable
The Company and its subsidiaries operate in the verticals of Film Production and Film Financing. As onMarch 31, 2024, the Company had following subsidiaries
1. PVP Capital Limited (WOS)
2. PVP Cinema Private Limited (WOS)
3. New Cyberabad City Projects Private Limited
The consolidated financial statements of the Company including its subsidiaries have been prepared inaccordance with Section 129(3) and Section 133 of the Companies Act, 2013 read with the rules madethereunder and applicable Indian Accounting Standards (Ind AS) along with the Auditor's Report formspart of this Annual Report. Further, a statement containing salient features of the financial statementsof the subsidiaries in the prescribed format AOC-1 is appended as Annexure - 1 to the Board's Report.Hence, a separate report on the performance and financial position of each of the subsidiaries and jointventure companies is not repeated here for the sake of brevity.
As required under Section 136 of the Companies Act, 2013 the audited financial statements includingthe consolidated financial statements and related information of the Company and audited accounts ofeach of its subsidiaries are available on the website www.pvpcinema.com. These documents will also beavailable for inspection during business hours at the registered office of the Company and any memberwho wishes to get copies of such financial statements may write to the Company for such requirements.
Management Discussion and Analysis Report for the year under review, as stipulated under Regulation34 of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, is presented in aseparate section forming part of the Annual Report.
The Company is committed to maintaining the prescribed standards of Corporate Governance. TheDirectors adhere to the requirements set out by the Securities and Exchange Board of India's CorporateGovernance practices and have implemented all the mandatory stipulations prescribed. The Report onCorporate Governance as stipulated under Regulation 34 read with Schedule V of the SEBI (ListingObligations & Disclosure Requirement) Regulations, 2015 forms part of the Annual Report.
During the year under review there were following changes in the board of the company:
• Mr. NS Kumar, Independent director resigned with effect from 31 May, 2023.
• Mr. Sohrab Chinoy, Independent director resigned with effect from 08 Aug, 2023
• Mr. Subramanian Parameswaran was appointed as Independent director (AdditionalDirector) with effect from 02 Aug, 2023. The appointment was regularized at the AGMheld on 01 Sep, 2023.
• Mr. Gautam Shahi was appointed as Independent director with effect from 16 Aug, 2023.The appointment was regularized through postal ballot dated 31 Aug, 2023.
• Mr. Nandakumar Subburaman, Independent director resigned with effect from 24 Aug,2023.
The details of training and familiarization programs and the Annual Board Evaluation process fordirectors have been provided under the Corporate Governance Report.
The Independent Directors have submitted the declaration of independence, pursuant to Section 149(7)of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub¬section (6) of Section 149 of the Companies Act, 2013.
The policy on Directors' appointment and remuneration including criteria for determining qualificationspositive attributes, independence of directors, and also remuneration for Key Managerial Personnel andother employees and the Board evaluation process also forms part of the Corporate Governance Reportas per Section 178(3) of the Companies Act, 2013 is hosted on the Company's website and the web linkthereto is http://pvpcinema.com/docs/other statutory info/PML-N&RCommPolicy.pdf.
Pursuant to the Act, 2013 and the Listing Regulations, the Company has formed all the statutoryCommittees namely, the Audit Committee, the Nomination and Remuneration Committee, the CorporateSocial Responsibility Committee, and the Stakeholders' Relationship Committee. Detailed informationabout these Committees and relevant information for the year under review are given in the CorporateGovernance Report. There have been no instances where the Board did not accept the recommendationsof its Committees including the Audit Committee.
The Board met seven times through Video Conference during the financial year, and the details of whichare given in the Corporate Governance Report that forms part of this Annual Report. The interveninggap between any two meetings was well within the period prescribed under the provisions of theCompanies Act, 2013
The financial statements of the Company are prepared as per applicable Accounting Standards asprescribed under Section 133 read with Rule 7 of the Companies (Accounts) Rules, 2014 and otherapplicable provisions, if any. There are no material departures from prescribed accounting standards.The Directors confirm that:
(i) In preparation of the annual accounts for the financial year ended March 31, 2024 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;
(ii) The directors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit and loss of thecompany for that period;
(iii) The directors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of the companyand 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 proper internal financial controls, which are adequate and areoperating effectively; and
(vi) The directors have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate to operate the company effectively.
The independent directors have submitted the declaration of independence, as required pursuant tosub-section (6) of section 149 of the Companies Act, 2013 stating that they meet the criteria ofindependence as provided in sub-section (6) of Section 149.
M/s RPSV & Co, Chartered Accountants (FRN: 0013151S) are the statutory auditor of the company.
The Report given by the Auditors on the financial statements of the Company is part of the AnnualReport. There has been qualification, reservation, adverse remark or disclaimer given by the Auditorsin their Report.
The Auditors' Report for the financial year 2023-24 is a "qualified report'' for both standalone &consolidated financial statements.
Auditors Qualification:
On Standalone financial statement:
STANDALONE QUALIFICATION
i. Attention is invited to note no. 43 to the Statement, in relation to inventory i.e., films productionexpenses amounting to Rs. 2,956.52 Lakhs, consists of advances granted to artists and co¬producers. As represented by the Management the film production is under progress withrespect to production of 2 movies costing Rs 76.69 lakhs. In respect of the balance inventory ofRs 2,879.83 lakhs the Board is confident of recovering the amount from the production houses.In the absence of documentary evidence as well as the confirmation of balance from the partiesrelating to the status of the inventory amounting to Rs 2,879.83 lakhs, we are unable to agreewith the views of the Board. We are of the opinion that realization of inventories is doubtful butwe are also unable to decide the quantum of loss that may arise on account of write down ofinventory
ii. Attention is invited to note no.44 to the Standalone Financial Statements, Investment in whollyowned subsidiary viz. PVP Capital Limited, Chennai (PVPCL) The subsidiary's net worth standsat Rs. 581.84 lakhs (negative) as at 31.03.2024. The possibility of liberal cash flow is dim. Thecompany has also defaulted in statutory dues are not remitted into the Government. PVPCL hasnot maintained minimum net owned funds as per RBI Regulations. Under these circumstances,regulatory authorities may cancel its registration as non-banking finance company. However,the Board of the Picturehouse Media Limited considers there is no need to provide for impairmentin investment made. We do not agree with that view. But it is difficult to assess correctly theextent of erosion and the loss arising therefrom.
iii. Note No.46 in the financial statements which indicates that the company is advancing forproduction of movies, it is still incurring losses from operations (negative net worth Rs.4,155.62 lakhs). Adverse key financial ratios, non-payment of statutory dues, impact of ourobservations made in preceding paragraphs, and other related factors indicate that there is anexistence of material uncertainty that will cast significant doubt on the company's ability tocontinue as a going concern. Our opinion is not modified in respect of this matter.
On consolidated financial statement:
i. Attention is invited to note no.45 to the Consolidated Financial Statements, films production
expenses amounting to Rs. 2,956.52 Lakhs, consists of advances granted to artists and co¬producers. As represented by the Management the film production is under progress withrespect to production of 2 movies costing Rs. 76.69 lakhs. In respect of the balance inventoryof Rs 2879.83 lakhs the Board is confident of recovering the amount from the productionhouses. In the absence of documentary evidence as well as the confirmation of balance fromthe parties relating to the status of the inventory amounting to Rs 2873.83 lakhs, we are unableto agree with the views of the Board . We are of the opinion that realization of inventories isdoubtful but we are also unable to decide the quantum of loss that may arise on account ofwrite down of inventory.
ii. The independent auditor of subsidiary company viz. PVP Capital Limited in their auditor's reporton the financial statements for the year ended 31st March, 2024 have drawn qualified opinion.
a) The Company is pursuing the realization of dues to the Company and created provisions forunrealizable amounts. Apart from this the Company is not carrying any main business activity.
b) The Company has not filled the appointment of Company Secretary and Chief Financialofficer (KMP) as per section 203 of the company's act 2013. Default of the mandatoryrequirement will result the penalties to the company and Directors.
c) The Company's inability to meets its financial requirements, non-payment of statutory dues,absence of visual cash flows, the pending legal outcomes and liquidity constraints which doubtsthe ability of the company
We draw attention to the following matters in the Notes to the financial statements
a) Note No.49 in the financial statements which indicates that the Companies the net worthhas completely eroded (negative net worth of Rs. 6,552.59 lakhs) and the Group incurringcontinuous losses from business operations, existence of adverse key financial ratios, non¬payment of statutory dues and other related factors indicate that there exists materialuncertainty that will cast significant doubt on the Group's ability to continue as a goingconcern. Our opinion is not modified in respect of this matter.
b) The independent auditor of subsidiary company viz. PVP Capital Limited in their auditor'sreport on the financial statements for the year ended 31st March, 2024 have drawn MaterialUncertainty relating to Going Concern which indicates as note no. 46 to the ConsolidatedFinancial Statements, The Company has not maintained the minimum net owned fund ofRs. 200 Lakhs as per registration and regulation policy of RBI which leads the non¬compliance and may cancel the registration as NBFC. Along with other points discussed inbasis for qualified opinion, indicates the existence of material uncertainty that may castsignificant doubt about the company's ability to continue as a going concern. However, inview of the management revised plans and other factors described, the management is ofthe view that the going concern basis for accounting is appropriate.
Management Comments on the above qualification:
1. Realisability is significantly dependent on timely completion of production of films and thecommercial viability of the films under production etc. Management is of the view that loans andadvances can be realised at the time of release of the movies and accordingly, the company isconfident of realizing the entire amount of loans with interest and does not foresee any erosionin carrying value. The management is confident of realising the value at which they are carriednotwithstanding the period outstanding.
2. PVPCL had entered into OTS of Rs.9500 Lacs with Canara Bank. The management considersthere is no need to provide for impairment in investment write down considering its future cashflows and possibility of receiving the dues from the borrowers.
3. Even though the company is incurring continuous losses, it has succeeded in generatingrevenue. This is entirely aligned with the Company's long range plan, which encompasses acontinued development of the Company's revenue generating activities in order to absorb thelosses carried 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 keep improving.The Company has paid advance amounts to the artistes and technicians for the future moviesproductions which are shown under Inventory. The financial statements have been prepared ona going concern basis based on cumulative input of the available movie projects in pipe lineand risk mitigating factors.
4. The films under production expenses mainly comprising payments to artists and co-producersthe company is evaluating options for optimal utilization of these payments in production andrelease of films. The management does not foresee any erosion in carrying value
5. Even though the company is incurring continuous losses, it has generated revenue from moviebusiness. There is no intention to liquidate the company and has future projects to producemovies. The financial statements have been prepared on a going concern basis based on thecumulative inputs of available movie projects in pipeline and risk mitigating factors.
6. Management has evaluating the action plans to realize the dues to the company and settlementthe existing vendors, further the company can carry the movie financing business after takingnecessary approvals from the RBI. Hence management is of the view that the financialstatements shall continue to be prepared on the assumption that the company is a goingconcern. The management is taking all efforts to appoint a suitable candidate for the position ofCFO and CS.
7. The management is taking all necessary steps to strengthen the internal control framework.Note:
1) All the recommendations made by the Audit Committee and Nomination and RemunerationCommittee are taken on record and accepted by the Board of Directors.
2) The Statement of Impact of Auditors Qualifications for the year ended 31st March, 2024 as perRegulation 34 (2) (a) of SEBI (LODR) Regulations, 2015 can be navigated via OTHERSTATUTORY INFORMATION (pvpcinema.com).
24.2 Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act and Rules and Regulation 24A of the ListingRegulations and other applicable provisions, framed thereunder, as amended, your Company hasappointed M/s. D. Hanumata Raju and Co., Company Secretaries, to undertake the Secretarial Audit ofPicturehouse Media Limited
The Secretarial Audit Report for financial year 2023-24 forms part of Annual Report as Annexure 2 ofthe Board's Report.
Auditors Qualification
1. The constitution of Nomination and Remuneration Committee of the Company was not as per theRegulation 19(1)(c) of SEBI (LODR) Regulations, 2015 and Section 178(1) of Companies Act, 2013during the period 01.06.2023 to 04.06.2023, 09.08.2023 to 15.08.2023 and 25.08.2023 to 07.11.2023.
2. Recommendation of Nomination and Remuneration Committee was not sought for appointment ofMr. Gautam Shahi as Independent Director of the company as required under Regulation 19(4) readwith Part D Para A of Schedule II of SEBI (LODR) Regulations, 2015 and Section 178(2) of CompaniesAct, 2013.
3. The Company has not obtained prior approval of the shareholders through resolution for the relatedparty transaction entered with BVR Malls Private Limited for the financial year 2023-24, as requiredunder Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
4. The Company has delayed by one day in submitting the disclosure of related party transactions forthe half year ended 31.03.2023 as per Regulation 23(9) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015 to stock exchange.
5. The Company has intimated about Closure of Trading Window for the quarter ended 31.12.2023 tothe stock exchange in PDF mode on 26.12.2023 and in XBRL mode on 29.12.2023 i.e., beyond 24 hoursof PDF filing, as required under BSE Circular No 20231208-34.
6. The company has made interest free loan to its Wholly owned Subsidiary i.e., PVP Capital Limitedand hence not in compliance with the provisions of Section 186 of the Act.
1. Due to successive resignations of the independent directors the NRC constitution was not as perSEBI (LODR) Regulations, 2015. The Company is in compliance with the provisions as on March 31,2024 and till the date of this report.
2. As on the date of Appointment of Mr. Gautam Shahi, the NRC was not constituted as per SEBIguidelines so appointment was approved by wider forum that is board members at the respective Boardmeeting.
3. The company had undertaken the RPT transaction in the ordinary course of business. The companyhas obtained shareholders approval in the AGM held on Sep 30, 2022 for material related partytransactions.
4. The delay in submitting the RPT was due to internal circulation of data.
5. The delay was inadvertent, however public dissemination was done in a timely manner.
6. The Subsidiary companies are not carrying any business, so the parent company is providing interestfree for statutory payments. These transactions are related party transactions for which the Companyobtained omnibus approval from directors. The Company did not lend any amount to its wholly ownedsubsidiary.
Maintenance of cost records as specified by the Central Government under sub-section (1) of section148 of the Companies Act, 2013, is not required by the Company and accordingly such accounts andrecords are not maintained.
There have been no instances of fraud reported by Statutory Auditors of the Company under Section143(12) of the Companies Act, 2013 and the Rules framed there under either to the Company or to theCentral Government.
Presently, the Equity Shares of the Company are listed on the BSE Limited (BSE).
During the year under review, there were no applications made or proceedings pending in the name ofthe company under the Insolvency Bankruptcy Code, 2016.
During the year under review, there was no one-time settlement or any loans availed from banks orPublic Financial Institutions.
As required under the listing regulations, the Managing Director and the Chief Financial OfficerCertification are attached to this Report.
During the financial year there were no significant orders passed by any Regulators or Courts orTribunals which would impact the going concern status of the Company.
In accordance with Section 134 (3)(a) of the Companies Act, 2013, the Annual Return in the prescribedformat is available on the website of the Company http://pvpcinema.com/otherstatutory-information/.
The Company has a well-placed, proper, and adequate Internal Financial Control (IFC) system whichensures that all assets are safeguarded and protected and that the transactions are authorized, recordedand reported correctly. This is commensurate with the nature of business and the size and complexityof the company's operations.
The company also has internal control through sufficient policies and procedures over the recoverabilityof advances made for film financing and provides reasonable assurance that such advances would notaffect the company adversely.
Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant tothe provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 theCompany has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, ifany genuine grievances to the appropriate authority.
The details of the Policy are explained in the Corporate Governance Report and also posted on thewebsite of the Company www.pvpcinema.com. During the year under review, the Company has notreceived any complaint(s) under the said policy.
Your Company has in place a CSR Committee in accordance with Section 135 of the Act.. Further, theCSR Policy as approved by the Board is also available on the website of the company. However CSR isnot applicable for the company during the year under review.
The table containing the names and other particulars of employees in accordance with the provisions ofSection 197(12) of the Companies Act, 2013 read with Rules 5(1) and 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure 2 tothe Board's Report.
The Company has a risk management policy in place with an object to ensure that all the Current andFuture Material Risks of the Company are identified, assessed/quantified, and effective steps are takento mitigate/ reduce the effects of the risks to ensure proper growth of the business and there are noelements of risk, which in the opinion of Board of Directors may jeopardize the existence of theCompany.
The Company has complied with applicable provisions of the Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Government of India under Section118(10) of the Companies Act, 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The SexualHarassment of Women at the Workplace (Prevention, Prohibition, And Redressal) Act, 2013. InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the financial year ended 31st March 2024, the Company has not received any complaintspertaining to Sexual Harassment.
Particulars regarding technology absorption, conservation of energy, and foreign exchange earnings andoutgo required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of Companies(Accounts) Rules, 2014 to the extent applicable are as under:
A
CONSERVATION OF ENERGY
The operations of the Company involve low energy consumption. Adequate measures have,however, 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]
CURRENT
YEAR
PREVIOUS YEAR
Foreign Exchange Earnings
Nil
Foreign Exchange Outgo
Total
Statements in this Report, particularly those which relate to Management Discussion and Analysisdescribing the Company's objectives, projections, estimates, and expectations may constitute'forward-looking statements' within the meaning of applicable laws and regulations. Actual results maydiffer from those either expressed or implied in the statement depending on the circumstances.
The directors acknowledge with gratitude the cooperation and assistance received from the bankers,actors, technicians, directors, production houses, shareholders, government agencies, and otherbusiness associates. The Directors wish to place on record their deep sense of appreciation for thecommitted services by the employees of the Company.
For and on behalf of the Board of Directors
Sd/- Sd/-
Date: 12.08.2024 Prasad V. Potluri Subramanian Parameswaran
Place: Chennai Managing Director Independent Director