DIRECTORS REPORT TO THE MEMBERS, We are pleased to present the report on the business and operations of your Company for the year ended March 31, 2015. REVIEW OF OPERATIONS During the financial year 2014-15, the Company could witness moderate profits on Consolidated basis. The total revenue of the Company for the financial year ended 31 March, 2015 on Standalone basis is Rs.1996.56 Lakhs as compared to the previous year's total revenue of Rs.7933.24 Lakhs. Further, total revenue on Consolidated basis is Rs.5504.58 Lakhs as compared to the previous year's total revenue of Rs. 10141.99 lakhs. The Standalone PAT (Profit after Tax) stood at (Rs.5.70) crores as against Rs.4.05 crores in 2014. Further, the Consolidated PAT stood at Rs.2.90 crores as against Rs.10.79 crores in 2014. DIVIDEND In view of the inadequacy of the profits 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, 2015. TRANSFER TO RESERVES In view of the aforesaid reason, the Board of Directors did not propose to transfer any amount to reserves for the period under review. CAPITAL STRUCTURE During the year, there is no change in the capital structure of the Company. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. PUBLIC DEPOSITS The Company has not accepted/renewed any fixed deposits during the year under review. INSURANCE All the properties of your Company have been adequately insured. RELATED PARTY TRANSACTIONS In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your company has formulated a Policy on Related Party Transactions which is also available on the Company's website at <http://www.pvpcinema.com/pdf/2015/RPTPolicy-PHML.pdf>. The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the Related Parties. The Policy specifically deals with the review and approval of Material Related Party Transactions keeping in view the potential or actual conflicts of interest that may arise because of entering into these transactions. In accordance with the policy all related party transactions are to be placed before Audit Committee for review and approval. Prior omnibus approval will be obtained for related party transactions on quarterly basis for transactions which are of repetitive nature and/ or entered in the ordinary course of business and are at arm's length. During the year under review, no Related Party Transactions or Material Related Party Transactions i.e., transactions, exceeding 10% of the annual consolidated turnover as per the latest audited financial statements. Accordingly, the disclosure of Related Party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable for the year ended March 31, 2015. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT As on the date of this report, the company has become a subsidiary of PVP Ventures Ltd. PVP Ventures Ltd. along with its subsidiaries, viz. PVP Global Ventures Pvt. Ltd. and PVP Media Ventures Pvt. Ltd. holds 51.46% equity shareholding in the company. SUBSIDIARY COMPANIES The Company along with its subsidiaries is operating in the verticals of Film Production and Film Financing. As on March 31, 2015, the Company has 3 (Three) wholly-owned subsidiaries viz.,PVP Capital Limited, PVP Cinema Private Limited and Picturehouse Media Private Limited (Foreign Subsidiary) The consolidated financial statements of the Company including its subsidiaries have been prepared in accordance with Section 129(3) of the Companies Act, 2013. 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. 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 the business hours at the Registered office of the Company and any member who wish to get copies of such financial statements, may write to the Company for such requirement. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. CORPORATE GOVERNANCE The Company is committed to maintain 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 Clause 49 of the Listing Agreement forms part of the Annual Report. BOARD OF DIRECTORS During the year under review, the Board has appointed Mrs. P. Sai Padma as an Additional Director in compliance of Section 149 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 (II) (A) (1) of the Listing Agreement with effect from March 28, 2015 to hold office up to the date of ensuing Annual General Meeting. Being eligible, Mrs. P. Sai Padma offered herself to be appointed as Director liable to retire by rotation. As per the provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a term of 5 consecutive years, and they will be eligible for re-appointment for another term of 5 years upon passing of a special resolution by the Company. The Independent Directors are not liable to retire by rotation. As required, the Independent Directors have confirmed by virtue of certificate stating that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013. The details of training and familiarization programs and Annual Board Evaluation process for directors have been provided under the Corporate Governance Report. The policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and also remuneration for Key Managerial Personnel and other employees and Board evaluation process also forms part of Corporate Governance Report at Annexure 2. None of the directors are due for re-appointment during the year under review. NUMBER OF MEETINGS OF THE BOARD The Board met 7 (Seven) times 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 betweenany two meetings was well within the period prescribed under the provisions of the Companies Act, 2013. 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 of the Companies Act, 2013 and other applicable provisions if any of the said act. There are no material departures from prescribed accounting standards. The Directors confirm that: ? In preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed; H The directors have selected such accounting policies and applied them consistently and made judgements 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; ? 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; ? The directors have prepared the annual accounts on a going concern basis; 5 The directors have laid down internal financial controls, which are adequate and are operating effectively; and ? 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. STATUTORY AUDITORS M/s. CNGSN and Associates LLP (FRN: 004915S), the statutory auditors, holds office up to the conclusion of this Annual General Meeting (AGM). The Company has received consent from M/s. CNGSN and Associates LLP, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and stated that they are not disqualified from being appointed as the Statutory Auditors of the Company. The Board of Directors therefore recommends reappointment of M/s. CNGSN & Associates LLP as the Statutory Auditors of the Company for the year 2015-16. Necessary resolution for their reappointment is incorporated in the Notice calling for the AGM. AUDITORS' REPORT The Auditors' Report for the financial year 2014-15 is an "Un-qualified" report and the said Report together with the Audited Accounts for the financial year ended March 31, 2015 read with the Notes on Accounts are self-explanatory and therefore do not call for any further comments. SECRETARIAL AUDITOR M/s. D. Hanumanta Raju and Co., Company Secretaries was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of theCompanies Act, 2013 and Rules thereunder. The Secretarial Audit Report for financial year 201415 forms part of the Annual Report as Annexure 3 of the Board's Report. As regards the observations in the report are concerned, the former relates to procedural delay and the latter observation merely states the manner by which the Company has complied with the provisions of the Companies Act, 2013. STOCK EXCHANGE LISTING Presently, the Equity Shares of the Company are listed on The BSE Limited (BSE). The Company confirms that it has paid the Annual Listing Fees due to the Stock Exchange for the year 2015-16. MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER CERTIFICATION As required under the SEBI Guidelines, the Managing Director and the Chief Financial Officer Certification is attached to this Report. SIGNIFICANT MATERIAL ORDERS There were NO significant Material Orders passed against the Company during the year under review. EXTRACT OF ANNUAL RETURN In accordance with Section 134 (3)(a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format is appended as Annexure 4 of the Board's Report. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. CORPORATE SOCIAL RESPONSIBILITY As per the Companies Act, 2013 all Companies having net worth of Rs.500 crore or more, turnover of Rs.1000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of the Board of Directors comprising 3 or more directors, and at least one of whom should be an independent director. As per the provisions, such company shall spend 2% of the average net profits of the company's, immediately preceding the three financial years. CSR Committee of the Company comprises of Mr. R Nagarajan, Mr. N S Kumar and Mr. Prasad V. Potluri and the Committee is responsible for formulating and monitoring the CSR Policy of the Company. The CSR Policy of the Company as approved by the Board of Directors of the Company forms part of this report at Annexure 5. During the financial year ended March 31, 2015, the Company is required to spend Rs.20,11,267 i.e., being 2% of the average net profits of the company's immediately preceding three financial years towards CSR activities. The Management proposes to spend the required amount on Education related activities during the financial year 2015-16. As on the date of report, the Company has spent Rs.20,11,500/- towards CSR Activities in the Education sector i.e. on Siddhartha Academy of General and Technical Education ('SAGTE'). Siddhartha Academy, the brainchild of a host of philanthropists with a pragmatic perception and holistic vision for a better tomorrow, was established in the year 1975 recognizing the need for imparting quality education complemented by skill based learning processes. A galaxy of stalwarts from different walks of life numbering about 250 founded this educational empire which contributes to fulfilling the academic aspirations of thousands of children of the region. 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 Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure 6 to the Board's Report. There are no employees who's details are required to be disclosed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ACKNOWLEDGEMENTS Your Directors acknowledge with gratitude the co-operation and assistance received from the bankers, actors, technicians, directors, production houses, shareholders, government agencies and other business associates. Your Directors wish to place on record their deep sense of appreciation for the committed services by the employees of the Company. For and on behalf of Board of Directors Sd/- Prasad V. Potluri Managing Director Sd/- R Nagarajan Director Date August 14, 2015 Place Chennai |