Picturehouse Media Ltd Directors Report

[RS. IN LAKH]

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 propose to 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 Business operations, the Board of Directors did not recommend any dividend for the financial year ended March 31, 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 part of the Note No. 52 to the financial statements provided in this Annual Report.

10. RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions that are foreseen and repetitive. For all the transactions entered pursuant to the omnibus approval so granted, a statement giving details of all such transactions is placed before the Audit Committee for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is posted on the Company’s website www.pvpcinema.com in accordance with Accounting Standard 18, the Related Party Transactions are disclosed in the notes to accounts of the Standalone Financial Statements.

11. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION

The company in the board meeting held on 28^th Aug 2023 had approved the acquisition of 81% stake in New Cyberabad City Projects Private Limited from PVP Ventures Limited for a consideration of Rs.32.56 Crs. The Shareholders approval for the same was obtained by postal ballot dated 31^st Aug, 2023. Pursuant to this acquisition the company has become a material subsidiary.

12. DETAILS OF ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS, DETAILS OF ISSUE OF SWEAT EQUITY SHARES- Not Applicable

13. DETAILS OF LOANS FROM DIRECTORS- Not Applicable

14. DETAILS OF ANY DIRECTOR WHO IS IN RECEIPT OF ANY COMMISSION FROM THE COMPANY AND WHO IS A MANAGING OR WHOLE-TIME DIRECTOR OF THE COMPANY SHALL NOT BE DISQUALIFIED FROM RECEIVING ANY REMUNERATION OR COMMISSION FROM ANY HOLDING COMPANY OR SUBSIDIARY COMPANY OF SUCH COMPANY SUBJECT TO ITS DISCLOSURE BY THE COMPANY IN THE BOARD’S REPORT-Not Applicable

15. SUBSIDIARY COMPANIES

The Company and its subsidiaries operate in the verticals of Film Production and Film Financing. As on March 31, 2024, the Company had following subsidiaries

The consolidated financial statements of the Company including its subsidiaries have been prepared in accordance with Section 129(3) and Section 133 of the Companies Act, 2013 read 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 statement containing salient features of the financial statements of 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 joint venture companies is not repeated here for the sake of brevity.

As required under Section 136 of the Companies Act, 2013 the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on the website www.pvpcinema.com. These documents will also be available for inspection during business hours at the registered office of the Company and any member who wishes to get copies of such financial statements may write to the Company for such requirements.

16. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

17. CORPORATE GOVERNANCE

The Company is committed to maintaining the prescribed standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India’s Corporate Governance practices and have implemented all the mandatory stipulations prescribed. The Report on Corporate Governance as stipulated under Regulation 34 read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015 forms part of the Annual Report.

18. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review there were following changes in the board of the company:

19. TRAINING AND FAMILIARIZATION PROGRAMS AND ANNUAL BOARD EVALUATION PROCESS

The details of training and familiarization programs and the Annual Board Evaluation process for directors 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 subsection (6) of Section 149 of the Companies Act, 2013.

The policy on Directors’ appointment and remuneration including criteria for determining qualifications positive attributes, independence of directors, and also remuneration for Key Managerial Personnel and other employees and the Board evaluation process also forms part of the Corporate Governance Report as per Section 178(3) of the Companies Act, 2013 is hosted on the Company’s website and the web link thereto is http://pvpcinema.com/docs/other_statutory_info/PML-N&RCommPolicy.pdf.

20. BOARD COMMITTEES

Pursuant to the Act, 2013 and the Listing Regulations, the Company has formed all the statutory Committees namely, the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, and the Stakeholders’ Relationship Committee. Detailed information about these Committees and relevant information for the year under review are given in the Corporate Governance Report. There have been no instances where the Board did not accept the recommendations of its Committees including the Audit Committee.

21. NUMBER OF MEETINGS OF THE BOARD

The Board met seven times through Video Conference during the financial year, and the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was well within the period prescribed under the provisions of the Companies Act, 2013

22. DIRECTORS’ RESPONSIBILITY STATEMENT

The financial statements of the Company are prepared as per applicable Accounting Standards 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 from prescribed accounting standards. The Directors confirm that:

(i) In preparation of the annual accounts for the financial year ended March 31, 2024 the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 proper internal financial controls, which are adequate and are operating effectively; and (vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate to operate the company effectively.

23. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION

(6) OF SEC.149 OF THE COMPANIES ACT, 2013

The independent directors have submitted the declaration of independence, as required pursuant to sub-section (6) of section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149.

24. AUDITORS

24.1 Statutory Auditor

M/s RPSV & Co, Chartered Accountants (FRN: 0013151S) are the statutory auditor of the company.

Auditors’ Report & Management’ Comments on the Qualifications made by statutory auditors The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been qualification, reservation, adverse remark or disclaimer given by the Auditors in 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 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 with respect to production of 2 movies costing Rs 76.69 lakhs. In respect of the balance inventory of Rs 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 parties relating to the status of the inventory amounting to Rs 2,879.83 lakhs, we are unable to agree with the views of the Board. We are of the opinion that realization of inventories is doubtful but we are also unable to decide the quantum of loss that may arise on account of write down of inventory

ii. Attention is invited to note no.44 to the Standalone Financial Statements, Investment in wholly owned subsidiary viz. PVP Capital Limited, Chennai (PVPCL) The subsidiary’s net worth stands at Rs. 581.84 lakhs (negative) as at 31.03.2024. The possibility of liberal cash flow is dim. The company has also defaulted in statutory dues are not remitted into the Government. PVPCL has not 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 impairment in investment made. We do not agree with that view. But it is difficult to assess correctly the extent of erosion and the loss arising therefrom.

iii. Note No.46 in the financial statements which indicates that the company is advancing for production 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 our observations made in preceding paragraphs, and other related factors indicate that there is an existence of material uncertainty that will cast significant doubt on the company’s ability to continue 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 with respect to production of 2 movies costing Rs. 76.69 lakhs. In respect of the balance inventory of Rs 2879.83 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 parties relating to the status of the inventory amounting to Rs 2873.83 lakhs, we are unable to agree with the views of the Board . We are of the opinion that realization of inventories is doubtful but we are also unable to decide the quantum of loss that may arise on account of write down of inventory.

ii. The independent auditor of subsidiary company viz. PVP Capital Limited in their auditor’s report on the financial statements for the year ended 31^st March, 2024 have drawn qualified opinion. a) The Company is pursuing the realization of dues to the Company and created provisions for unrealizable 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 Financial officer (KMP) as per section 203 of the company’s act 2013. Default of the mandatory requirement will result the penalties to the company and Directors. c) The Companys inability to meets its financial requirements, non-payment of statutory dues, absence of visual cash flows, the pending legal outcomes and liquidity constraints which doubts the 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 worth has completely eroded (negative net worth of Rs. 6,552.59 lakhs) and the Group incurring continuous losses from business operations, existence of adverse key financial ratios, non-payment of statutory dues and other related factors indicate that there exists material uncertainty that will cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

b) The independent auditor of subsidiary company viz. PVP Capital Limited in their auditor’s report on the financial statements for the year ended 31st March, 2024 have drawn Material Uncertainty relating to Going Concern which indicates as note no. 46 to the Consolidated Financial Statements, The Company has not maintained the minimum net owned fund of Rs. 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 in basis for qualified opinion, indicates the existence of material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern. However, in view of the management revised plans and other factors described, the management is of the view that the going concern basis for accounting is appropriate.

Management Comments on the above qualification:

Note:

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 Listing Regulations and other applicable provisions, framed thereunder, as amended, your Company has appointed M/s. D. Hanumata Raju and Co., Company Secretaries, to undertake the Secretarial Audit of Picturehouse Media Limited

The Secretarial Audit Report for financial year 2023-24 forms part of Annual Report as Annexure 2 of the Board’s Report.

Auditors Qualification

1. The constitution of Nomination and Remuneration Committee of the Company was not as per the Regulation 19(1)(c) of SEBI (LODR) Regulations, 2015 and Section 178(1) of Companies Act, 2013 during 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 of Mr. Gautam Shahi as Independent Director of the company as required under Regulation 19(4) read with Part D Para A of Schedule II of SEBI (LODR) Regulations, 2015 and Section 178(2) of Companies Act, 2013.

3. The Company has not obtained prior approval of the shareholders through resolution for the related party transaction entered with BVR Malls Private Limited for the financial year 2023-24, as required under 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 for the 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 to the stock exchange in PDF mode on 26.12.2023 and in XBRL mode on 29.12.2023 i.e., beyond 24 hours of 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 Limited and hence not in compliance with the provisions of Section 186 of the Act.

Management Comments on the above qualification:

1. Due to successive resignations of the independent directors the NRC constitution was not as per SEBI (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 SEBI guidelines so appointment was approved by wider forum that is board members at the respective Board meeting.

3. The company had undertaken the RPT transaction in the ordinary course of business. The company has obtained shareholders approval in the AGM held on Sep 30, 2022 for material related party transactions.

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 interest free for statutory payments. These transactions are related party transactions for which the Company obtained omnibus approval from directors. The Company did not lend any amount to its wholly owned subsidiary.

25. 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 and accordingly such accounts and records are not maintained.

26. REPORTING OF FRAUDS

There have been no instances of fraud reported by Statutory Auditors of the Company under Section 143(12) of the Companies Act, 2013 and the Rules framed there under either to the Company or to the Central Government.

27. STOCK EXCHANGE LISTING

Presently, the Equity Shares of the Company are listed on the BSE Limited (BSE).

28. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016

During the year under review, there were no applications made or proceedings pending in the name of the company under the Insolvency Bankruptcy Code, 2016.

29. DETAILS OF THE DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE-TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the year under review, there was no one-time settlement or any loans availed from banks or Public Financial Institutions.

30. MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER CERTIFICATION

As required under the listing regulations, the Managing Director and the Chief Financial Officer Certification are attached to this Report.

31. SIGNIFICANT ORDERS AND MATTERS

During the financial year there were no significant orders passed by any Regulators or Courts or Tribunals which would impact the going concern status of the Company.

32. EXTRACT OF ANNUAL RETURN

In accordance with Section 134 (3)(a) of the Companies Act, 2013, the Annual Return in the prescribed format is available on the website of the Company http://pvpcinema.com/otherstatutory-information/.

33. 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 the transactions are authorized, recorded and reported correctly. This is commensurate with the nature of business and the size and complexity of the company’s operations.

The company also has internal control through sufficient policies and procedures over the recoverability of advances made for film financing and provides reasonable assurance that such advances would not affect the company adversely.

34. VIGIL MECHANISM / WHISTLE-BLOWER POLICY

Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, if any genuine grievances to the appropriate authority.

The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company www.pvpcinema.com. During the year under review, the Company has not received any complaint(s) under the said policy.

35. CORPORATE SOCIAL RESPONSIBILITY

Your Company has in place a CSR Committee in accordance with Section 135 of the Act.. Further, the CSR Policy as approved by the Board is also available on the website of the company. However CSR is not applicable for the company during the year under review.

36. PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 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 to the Board’s Report.

37. RISK MANAGEMENT POLICY

The Company has a risk management policy in place with an object to ensure that all the Current and Future Material Risks of the Company are identified, assessed/quantified, and effective steps are taken to mitigate/ reduce the effects of the risks to ensure proper growth of the business and there are no elements of risk, which in the opinion of Board of Directors may jeopardize the existence of the Company.

38. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.

39. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition, And Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. 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 complaints pertaining to Sexual Harassment.

40. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

Particulars regarding technology absorption, conservation of energy, and foreign exchange earnings and outgo 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 its operations.

C FOREIGN EXCHANGE EARNINGS AND OUTGO

[Rs. In Lakh]

41. CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Company’s objectives, projections, estimates, and expectations may constitute ‘forward-looking statements’ within the meaning of applicable laws and regulations. Actual results may differ from those either expressed or implied in the statement depending on the circumstances.

42. ACKNOWLEDGEMENTS

The directors acknowledge with gratitude the cooperation and assistance received from the bankers, actors, technicians, directors, production houses, shareholders, government agencies, and other business associates. The Directors wish to place on record their deep sense of appreciation for the committed services by the employees of the Company.