Pritish Nandy Communications Ltd Directors Report

DIRECTORS REPORT

PRITISH NANDY COMMUNICATIONS LIMITED

THE 31ST ANNUAL REPORT AND ACCOUNTS 2024

To

The Members

Pritish Nandy Communications Limited

Your Directors present the 31st Annual Report on the business and operations of the Company together with the audited financial accounts for the financial year ended March 31, 2024.

FINANCIAL HIGHLIGHTS

Total income from operations for this year was Rs.5,771.93 lakh as compared to Rs.1,825.08 lakh for the earlier year. The Company made a profit of Rs.218.68 lakh after tax as compared to a loss of Rs.405.56 lakh after tax in the preceding year.

		In Rs.lakh
Particulars	Standalone
	Year ended March 31, 2024	Year ended March 31, 2023
Income from operations	5,771.93	1,825.08
Other income	63.57	55.12
Total turnover	5,835.50	1,880.20
Total expenditure	5,628.64	2,289.51
Profit/ (loss) before exceptional and extraordinary items and tax	206.86	(409.31)
Current tax	0.00	0.00
Profit/ (loss) after current tax	206.86	(409.31)
Deferred tax	(11.82)	(3.75)
Profit/ (loss) after tax	218.68	(405.56)
Dividend (%)	0	0
Transfer to reserves	0	0
Balance in statement of profit and loss	(835.98)	(1,049.92)
Paid up capital	1,446.70	1,446.70
Earnings per share (Rs.)	1.51	(2.80)
Book value per share (Rs.)	52.20	50.72

PRESENT ECONOMIC SITUATION AND PERFORMANCE OF THE COMPANY

During the year under review, the Company completed the principal photography for the Companys upcoming new series The Royals, a romantic comedy for Netflix, the worlds leading streaming platform.

The Companys new Amazon Original series "Ziddi Girls", the filming of which is complete and is expected to release on Prime Video this year.

The Company is planning to commence production of a new show in this financial year for another reputed international studio. More details of that show will be announced by the studio shortly.

During the year under review, the Companys income from operations reached Rs.5,771.93 lakh with a profit after tax of Rs.218.68 lakh. The Company continued to review advances for content as in the past and the Company has written off an amount of Rs.13.42 lakh incurred in developing content that is no longer viable to take up in the future.

As per the FICCI E&Y Report 2024, the Indian M&E sector continued its growth trajectory and it grew by Rs.173 billion (8.1%) to reach Rs.2.32 trillion (US$27.9 billion). The sector is expected to grow by 10.2% to reach Rs.2.55 trillion by 2024, then grow at a CAGR of 10% to reach Rs.3.08 trillion by 2026. The Report has also shown a significant growth of digital media. With streaming platforms continuing to grow viewership, the immediate future of the content business looks stable and strong. Particularly for a Company like yours, which makes shows for global streaming platforms.

The PNC film library is streaming on multiple OTT platforms, giving our earlier work a new life, a new audience apart from those who watch these films on satellite television on the Star TV platform. This growing viewership strengthens your Companys repute as Storytellers to the World.

Our objective is to scale up our existing business primarily through continuing to create and make new content, both original series and movies, that top-rated global studios are ready to fund and acquire. Simultaneously, we intend to leverage our existing content library across various platforms on a global scale. Our business model intends to remain predictable, scalable, and sustainable, ultimately leading to greater profitability.

DIVIDEND

Your Directors do not recommend any dividend for this year.

LISTING WITH THE STOCK EXCHANGES

The equity shares of the Company continue to remain listed with the Bombay Stock Exchange Ltd (BSE) and National Stock Exchange of India Ltd (NSE). The listing fees payable to both the stock exchanges for the year 2024-25 have been paid.

TRANSFER TO RESERVES

Your Company has not transferred any amount to the general reserve.

DEPOSIT FROM PUBLIC

The Company has not accepted any deposits within the meaning of Sections 73, 74 and 76 of the Companies Act, 2013 ("the Act") and the rules framed thereunder.

SUBSIDIARIES

The Company has two subsidiaries: PNC Digital Limited and PNC Wellness Limited. There are no associate companies within the meaning of Section 2(6) of the Act. There has been no material change in the nature of the business of its subsidiaries.

Pursuant to Section 129(3) of the Act, in addition to the financial statements provided under Section 129(2) of the Act, consolidated financial statements of the Company and its subsidiaries in the same form and manner as that of its own shall also be laid before the Annual General Meeting (AGM) of the Company. A statement containing salient features of the financial statements of the Companys subsidiaries in Form AOC-1 is appended as Annexure I.

Pursuant to the provisions of Section 136 of the Act, the standalone financial statements and consolidated financial statements of the Company along with relevant documents and separate audited accounts in respect of its subsidiaries are available on the Companys website www.pritishnandycom.com

PNC Digital Limited

This subsidiary was kept in order to explore new opportunities that may emerge in the streaming business by leveraging the goodwill and stature of the PNC brand. One of its roles can be that of an intermediary providing distribution services to content makers who are struggling to shift from traditional media to digital, where our Company believes the future lies. However, on the basis of a fair valuation report done by an independent registered valuer, the Company has impaired the value of its investment in this subsidiary by Rs.33.39 lakh for the year under review.

PNC Wellness Limited

This subsidiary operates in the wellness business segment which it pioneered in India when it opened Moksh: The Wellness Place in Mumbai. After a decade of innovative activity, with rentals increasing and the wellness business, like many others, shifting to digital platforms, Moksh was shut down.

The subsidiary however continues, intending to use the brands goodwill and reputation to build a digital opportunity at an appropriate time.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. they 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 profit/ (loss) of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such controls appear adequate and are operating effectively;

f. they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2023-2024.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and Articles of Association of the Company, Pritish Nandy (DIN: 00006331), Director of the Company, retire by rotation at the ensuing AGM, and being eligible, offers himself for reappointment. A resolution seeking Shareholders approval for his reappointment forms part of the notice.

Pallab Bhattacharya. (DIN: 00008277) a Wholetime Director of the Company is proposed to be appointed for a further period of 3 years with effect from February 17, 2025.

Similarly, Rangita Pritish Nandy (DIN: 00005690) a Wholetime Director of the Company is proposed to be appointed for a further period of 3 years with effect from February 18, 2025.

Resolutions seeking Shareholders approval for their re-appointment forms part of the notice.

COMPLIANCE ON CRITERIA OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent Director under Section 149(7) of the Act, that he/ she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year, except for the sitting fees, the Independent Directors of the Company had no other pecuniary relationship or transactions with the Company.

PARTICULARS OF EMPLOYEES

This disclosure required to be furnished pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure II.

BOARD MEETINGS HELD DURING THE YEAR

As required under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year four meetings of the Board of Directors were held and one meeting of independent Directors was held. The details of the meetings of the Board are furnished in the Corporate Governance Report.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES, AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors including Independent Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by the Securities and Exchange Board of India (SEBI) and the SEBI Listing Regulations.

Further, the Independent Directors, at their exclusive meeting held during the year on March 27, 2024, reviewed the performance of the Board, its Chairman and Non-Executive Directors, as well as its Executive Directors, and other items as stipulated under the SEBI Listing Regulations.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR AND TILL THE DATE OF REPORT

There has been no material change and / or commitment made affecting the financial performance of the Company that has occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this Directors report.

AUDITORS

Statutory Auditors

BD Jokhakar & Co., Chartered Accountants (FRN 104345W) were re-appointed as Statutory Auditors of the Company for another term of 5 years at the 29th AGM held on August 26, 2022 on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors till the conclusion of the 34th AGM of the Company to be held for the financial year 2026-2027.

AUDITORS REPORT

The Auditors Report does not contain any qualifications, reservations or adverse remarks.

In the Emphasis of Matter paragraph, the auditors have stated:

"We draw attention to note 33(b) on the standalone financial statements which relates to impairment loss of Rs.33.39 lakhs in investment in subsidiary company "PNC Digital Limited." based on the factors stated in the said note.

We further draw attention to note 35(a) on the standalone financial statements which describe the facts related to the legal proceedings initiated by the Company for the recovery of an advance of Rs.150 lakh. The management considers the same as good and fully recoverable. The legal opinion obtained by the Company supports this. We have relied on the opinion and consequently the Company has not made provision of any amount there against.

We further draw attention to note 35(b) on the standalone financial statements which describes that the Company has received an award of Rs.3.52 crore plus interest of Rs.35 lakh received by the Company in its favour in the arbitration case filed against White Feather Films (Proprietor Sanjay Gupta). White Feather Films has gone in appeal against the above said award. The court has directed the proprietor not to dispose off/create any third-party rights on his properties which are valued at Rs.12 crore. Proceedings are ongoing and in view of the same outstanding of Rs.3.17 crore is considered as fully recoverable and consequently there is no provision made of any amount there against.

Our opinion is not modified in respect of the above matters".

I Your Directors confirm that the matters referred to in the segment relation to Emphasis of Matter by the independent auditors in their report have been clarified in notes 33(b), 35(a) and 35(b) of the standalone financial statements which are self-explanatory and reproduced below.

NOTE - 33(b)

The Company has an impaired investment of Rs.19.26 lakh in equity shares of subsidiary viz PNC Digital Limited as at March 31, 2024. During the year this subsidiary has earned a nominal income from its non-operational activities. The net worth of this subsidiary is Rs.19.33 lakh as on March 31, 2024.This subsidiary will continue its efforts in future. Although, this subsidiary has unfettered access to the film content of the holding company and requires no additional capital deployment to earn revenue, Company has impaired the value of its investment in this subsidiary by Rs.33.39 lakh for the period under review, based on fair valuation report.

NOTE - 35(a)

The Company has initiated proceedings for the recovery of an amount of Rs.1.50 crore given to Saboo Films Pvt Ltd and Bharat film Works against film rights. Proceedings are ongoing before the City Civil Court and the management considers the same as fully recoverable and hence no provision is made. Legal opinion obtained by the Company supports this.

NOTE - 35(b)

The Company had received an award of Rs.3.52 crore plus interest of Rs.35 lakh in its favour in the arbitration filed against White Feather Films (Proprietor Sanjay Gupta). White Feather Films has gone in appeal against the award and was directed to deposit an amount of Rs.3 crore by the Bombay High Court, which they failed to do. The Company has filed a petition for execution of the arbitration award. The Bombay High Court has restrained Sanjay Gupta from disposing of, encumbering, alienating, transferring, and parting with the possession of or creating any third party rights or interest in his 3 properties in Pune and Khandala valued at Rs.12 crore. The advance of Rs.3.18 crore is therefore considered as fully recoverable.

SECRETARIAL AUDITORS REPORT

VN Deodhar & Company, practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the fiscal year 2024, as required under Section 204 of the Act and rules thereunder.

The Secretarial Auditors Report is given as Annexure III which forms part of this report. The Secretarial Auditors Report states that during the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned therein.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A detailed report on Management Discussion and Analysis is enclosed with this report.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Auditor submits his report to the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system of the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of the Internal Auditor, officers undertake corrective action in their respective areas and thereby strengthen control. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy, pursuant to the provisions of Section 134(n) of the Act, which enables identification and evaluation of business risks and opportunities. This policy seeks to create transparency, minimize adverse impacts on business objectives and enhance the Companys competitive advantage.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT

The particulars of loans, guarantees and investments have been disclosed in the standalone financial statements.

TRANSACTIONS WITH RELATED PARTIES

All Related Party Transactions entered into during the financial year were on an arms length basis and in the ordinary course of business. Details of Related Party Transactions are disclosed in note 31 of the Audited Standalone Financial Statements of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, the Annual Return for FY 2023-24 is available on Companys website. www.pritishnandycom.com.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act) and Rules made thereunder, your Company has constituted an Internal Complaints Committee (ICC). While maintaining the highest governance norms, the Company has, within the ICC, appointed an external independent person who has worked in this area and has the requisite experience in handling such matters.

During the year, no complaints were received by the Committee.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Companys CSR policy is aimed at demonstrating care for the community through its focus on education, skill development, health, wellness and research on content.

Further, in accordance with the provisions of Section 135 of the Act and rules framed thereunder, the Company has adopted and constituted a CSR Committee of Directors comprising of the following:

Sunil Kumar Alagh, Chairman Karan Ahluwalia Pallab Bhattacharya

The detailed policy and constitution of the committee is available on the Companys website.

No CSR provision is applicable for the financial year ended on March 31, 2024 as the average net profit of the Company for the last three financial years is inadequate.

DISCLOSURE REQUIREMENT

As per SEBI Listing Regulations, Corporate Governance Report with auditors certificate thereon and Management Discussion and Analysis are attached, which form part of this report.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and confirms that such systems are adequate and operating effectively.

Details of the familiarization programs of the independent Directors are available on the website of the Company.

Policy for determining material subsidiaries of the Company is available on the website of the Company.

Policy on dealing with related party transactions is available on the website of the Company.

Policy on fair disclosure and code of conduct required to be set out by the Company under SEBI (PIT) Regulations, 2015 is available on the website of the Company.

The website of the Company is www.pritishnandycom.com.

The Company has formulated and published a Whistle Blower Policy to provide vigil mechanism for employees including Directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and the SEBI Listing Regulations with stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per Section 134(3) (m) of the Act, the particulars of Energy Conservation, Research and Development and Technology Absorption are not applicable to your Company.

Foreign Exchange Earnings and Outgo during the year are given in Annexure IV which forms part of the report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts which remained unclaimed and unpaid, for a period of 7 years from the date of declaration of dividend.

ACKNOWLEDGEMENT

The Board thanks all stakeholders in the Company, clients, bankers and financial institutions for their continued support to the Company and their confidence in its management. It also wishes to record its appreciation of the efforts put in by all staff and associates of the Company.

	For and on behalf of the Board of Directors
	Pallab Bhattacharya	Raghu Palat
	Wholetime Director and CEO	Director
Mumbai, August 6, 2024	DIN:00008277	DIN:00311994