To
The Members
Padmalaya Telefilms Limited
Your directors have pleasure in presenting the 33rd Annual Report on the business of your company and the Audited Financial Statements for the year ended on 31st March 2024 thereof. The Business and operations of the company over the last fiscal year are briefly encapsulated in this Annual Report.
Financial Results
Financial performance of the Company is elaborated in the Financial Statements annexed to this Annual Report.
Business Performance Review
During the year under review, the performance of the company is not as per the business standards set-up by the management due to various external, marketing & industry factors have affected the business. The Board and its Management has made the postmortem analysis on the performance and the Board of Directors assures you better performance in the years to come.
Outlook for the current year
Your Company is not as per the expectations in spite of continuous efforts to strengthen its stand in the market.
Dividend
The Board could not recommend dividend during the year under review in absence of profits.
BUSINESS RISK MANAGEMENT
The Company, like any other enterprise, is exposed to business risk which can be internal risks as well as external risks. The threats to the industry in which the company operates are:
Piracy: Piracy of the produced content, under the purview of intellectual property rights, can adversely affect revenues and profitability.
Mitigation: Industry members have set up an Antipiracy Society (AACT) to fight the menace.
DEPOSITS
The Company has not accepted deposits covered under Chapter V of the Companies Act, 2013 and accordingly, the disclosure requirements stipulated under the said Chapter are not applicable.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the year under review, the company has not given any loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013
CONTRACTS AND ARRANGEMEMENTS WITH RELATED PARTIES
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, except the remuneration to managerial personnel, there are no related party transactions to be disclosed.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith elsewhere in the Annual Report.
DEMAT SUSPENSE ACCOUNT UNCLAIMED SHARES
As on 31st March 2024, there were no Equity Shares of Shareholders were lying in the Escrow Account due to non-availability of the correct particulars.
CORPORATE GOVERNANCE
Your Company is compliant with the Corporate Governance requirements as per the Provisions of SEBI (Listing Obligations and Disclosures Requirements) Regulations upto a certain extent. A separate section on Corporate Governance together with a certificate from the Statutory Auditor's confirming compliance is set out in the Annexure forming part of this report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
A Management Discussion and Analysis Report, has been attached and forms part of the Annual Report.
ADDITIONAL INFORMATION AS REQUIRED U/ S 134(3)(m) OF THE COMPANIES ACT, 2013
(a) Conservation of Energy:
(i) details of steps taken by the company for utilising alternate sources of energy, and (ii) the capital investment on energy conservation equipment's, are - The company is not engaged in manufacturing activities, and as such the particulars relating to conservation of energy is not applicable. The company makes every effort to conserve energy as far as possible in its editing facilities, Production Floors, Office etc.
(b) Technology Absorption, adaptation and innovation:-
(i) The company is not engaged in manufacturing activities, and as such the particulars relating to Research, Development and technology absorption are not applicable.
(ii) Research and Development (R & D): No research and Development has been carried out.
(c) Foreign exchange earnings: Nil
(d) Foreign exchange out go: Nil
PARTICULARS OF EMPLOYEES
The Directors are to report that none of the employee was in receipt of remuneration exceeding the limit prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 .
AUDIT COMMITTEE:
Pursuant to the provisions of section 177 of the Companies Act, 2013 the company's Board constituted the Audit Committee with the following directors.
STATUTORY AUDITORS
At the 31st Annual General Meeting held on 30th September, 2022, M/s. P Murali & Co., Chartered Accountants (FRN: 007257S), Hyderabad were appointed as Statutory Auditors of the Company, to hold office for a period of five consecutive years commencing from the financial year 2022-23. In this regard, the said Statutory Auditors has given the declaration that they meet the criteria to act as the Statutory Auditor and they are not disqualified to continue as the Statutory Auditors of the Company. It would be in accordance with the provisions of section 141 of the Companies Act, 2013.
BOARD AND COMMITTEES PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations 2015, the Board has carried out an annual performance, the directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees.
NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR AND THE DATES OF THE BOARD MEETINGS:
The Board met during the financial year 2023-24 as follows & the dates on which the above-Board meetings were held are as follows: 30th May 2023, 14th August 2023, 5th September 2023, 14th November 2023, and 14th February 2024.
DIRECTORS AND INDEPENDENT DIRECTORS
In accordance with the provisions of the Act and Articles of Association of the Company, the Board is duly constituted. During the financial year under review, Sri. G.V. Narasimha Rao (DIN: 01763565) Director retired by rotation and being eligible were reappointed.
Mrs. Uma Devi Narravula was appointed by the Board of Directors as an Additional Director of the Company w.e.f 14th August 2019 and she was regularized as Director as well as Independent Director in the Annual General Meeting held on 30th September 2019 for a period of five years. Board of Directors in its meeting held on 14th August 2024, has considered and approved her re-appointment for the second term as Independent Director, which needs to be ratified by the shareholders of the Company in this Annual General Meeting.
Dr. DVN Raju was originally appointed on 26th December 2005, and as required under the Companies Act, 2013, earlier appointed as Independent Directors of the Company in the 23rd Annual General Meeting held on 30th September 2014, for a period of five years i.e. till 29th September 2019. Subsequently, he was reappointed for the second time as Independent Director of the Company, term of which expires on 30th September 2024. As per the provisions of the Companies Act, 2013 with respect to appointment and tenure of the Independent Director, the Independent Director shall be appointed for not more than two terms of five years each and shall not be liable to retire by rotation at every AGM. Accordingly, the Independent Director will serve for not more than two terms of five years each on the Board of the Company. In line with the requirements of the Companies Act, 2013, it is therefore proposed to designate him as Non Executive Non-Independent Director on the Board of the Company, commencing from 30th September 2024. A brief profile of proposed Independent Director, including nature of their expertise, is provided in this Annual Report.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations 2015. The Company has received declarations from the Independent Directors of the Company to the effect that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013 and are available for inspection at the registered office of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3) (c) of the Companies Act, 2013, with respect to Director's responsibilities Statement it is hereby confirmed:
POLICIES
Material Subsidiary
During the year ended March 31, 2024, the Company does not have any material listed/unlisted subsidiary companies as defined in SEBI (LODR) Regulations. The policy on determining material unlisted subsidiary of the Company is approved by the Board of Directors of the Company.
Vigil Mechanism
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Blower Mechanism for directors and employees to report genuine concerns has been established.
The Board of Directors of the company are committed to maintain the highest standard of honesty, openness and accountability and recognize that employees have important role to play in achieving the goal. As a public company the integrity of the financial matters of the Company and the accuracy of financial information is paramount. The stakeholders of the Company and the financial markets rely on this information to make decisions.
For these reasons, the Company must maintain workplace where it can retain and treat all complaints concerning questionable accounting practices, internal accounting controls or auditing matters or concerning the reporting of fraudulent financial information to our shareholders, the Government or the financial markets. The employees should be able to raise these free of any discrimination, retaliation or harassment. Pursuant to the policy, employees are encouraged to report questionable accounting practices to Dr. DVN Raju (DIN: 01887919), Chairman of Audit Committee through email or by correspondence through post.
Details of Subsidiaries, Associate Companies, and Joint Venture Companies, including in the consolidated financial statements:
The Company do not have Subsidiaries, Associate Companies, and Joint Venture Companies. So, the financials of the Company do not require to be prepared on consolidated basis.
Material changes and commitments affecting the financial position.
During the period under review, there is no event & Material change and commitments affecting the financial position.
Company's policy on director's appointment & remuneration.
The Company has a policy on Directors' appointment & Remuneration and the same will be implemented whenever the appointments take place.
Particulars of loans, Guarantees or investments.
During the period under review, there were no loans / Guarantees / Investments taken/provided by the Company.
Particulars of contract or arrangement with related party
During the period under review, there were no contracts or arrangement with related party except as provided in the Auditor's Report.
Annual evaluation of its own & Board committees' performance.
The company has a policy on Board & Committees' evolution & performance and the same is being reviewed on quarterly basis.
Implementation of risk management policy.
The company has a policy on risk management and the same is implemented by the Company to mitigate the risk in the business.
Policy on CSR initiatives
The Company need not have to make constitute a policy for CSR as the same is not applicable to the Company.
Post Balance Sheet events
There are no material events after the 31st March 2024 till the signing of this Annual Report, which has significant impact on the business of the Company.
Disclosure about Cost Audit
The requirement of maintaining the cost Audit Records is not applicable to the Company
Disclosure about ESOP and Sweat Equity Share
There are no securities issued on ESOP basis / Sweat Equity.
Familiarisation programme for Independent Directors
Pursuant to the provisions of SEBI (LODR) Regulations, the Company has formulated a programme for familiarising the Independent Directors with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc through various initiatives.
Key Managerial Personnel
Sri. GV Narasimha Rao (DIN: 01763565) Executive Director of the Company is the Chief Executive Officer of the Company (CEO), Sri. MVRS Suryanarayana, Chief Financial Officer (CFO) & Compliance officer of the Company, are the Key Managerial Personnel in accordance with the Section 203 of the Companies Act, 2013.
Related Party Transaction
Policy on dealing with Related Party Transactions is approved by the Board. No related party transactions were entered into during the financial year under review, except remuneration to managerial personnel, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The same was discussed by the Audit Committee as also the Board. The policy on Related Party Transactions as approved by the Board. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference to financial statements. Periodic audits are undertaken on a continuous basis covering all the operations i.e., manufacturing, sales & distribution, marketing, finance, etc. Reports of internal audits are reviewed by management from time to time and desired actions are initiated to strengthen the control and effectiveness of the System.
Depository System
Your Company's equity shares are tradable compulsorily in electronic form and your Company has connectivity with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL). As per the SEBI (Listing Obligations & Disclosure Requirements) (Fourth Amendment) Regulations, 2018, vide Gazette notification dated 8th June 8June, 2018 & 30th November, 2018 mandated that Share transfer shall be mandatorily carried out in dematerialized form only w.e.f. from 1st April 1, 2019. In view of the numerous advantages offered by the Depository System, members are requested to avail the facility of Dematerialization of the Company's shares on either of the Depositories mentioned as aforesaid.
Corporate Governance Report
Your Company has taken adequate steps to adhere to all the stipulations laid down in 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. A report on the Corporate Governance is included as a part of this report. Certificate from the Secretarial Auditors of the company M/s. Puttaparthi Jagannatham & Co, Company Secretaries, Hyderabad, confirming the compliance with the conditions of Corporate Governance as stipulated under above regulations is included as Annexure-6.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report in Form MR-3 is obtained by the company from M/s. Puttaparthi Jagannatham & Co, Company Secretaries, Hyderabad, and forms part of this Annual report annexed as Annexure-I.
Explanation to the qualifications mentioned in the Secretarial Audit Report in Form MR-3 obtained from M/s. Puttaparthi Jagannatham & Co, Company Secretaries, Hyderabad:
The Secretarial Auditors i.e., M/s. Puttaparthi Jagannatham & Co, Company Secretaries, Hyderabad, has made qualifications in their Secretarial Audit Report, regarding the instances of non-filing/delay in filing of compliances with the Stock Exchange during the financial year and others; The Company shall be cautious in future in this regard, and shall adhere to the Compliance. The Company has set in place the compliance adherence mechanism as on the date of this report and is reviewed quarterly to achieve 100% compliance status.
Disclosures pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
The details of remuneration paid to the Managerial Personnel are as under -
1. The Disclosures pursuant to sub-rule (1) of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forms part of the Board's Report.
2. The Disclosures pursuant to sub-rule (2) of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company forms part of the Board's Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details pertaining to criteria for determining qualifications, positive attributes and independence of a Director and remuneration policy have been provided in Section of the attached Corporate Governance Report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
Reply to the Qualifications / Reservation in the Audit Report / Secretarial Audit Report
Statutory Auditors of the Company, has made the following qualification / reservations on the financial statements for the period ended on 31st March 2024, and the reply of management is as follows:
1. The Company has not paid the GST liability of Rs. 56.06/-(in lakhs) upto 31st March 2024.
Management's Response:
The GST liability as on 31st Mach 2024, could not be paid due to the suspension of the registration of the GST registration. The company made appeal and it is under active consideration of the department for restoration of the same. On resolving of the issue, the company will proceed to affect the payments.
2. The Company has not submitted the physical verification reports of inventory aggregating to Rs. 13,13.14/-(in lakhs) as at 31st March 2024, and we are unable to obtain sufficient appropriate audit evidence regarding the physical existence and valuation of Inventory. In the absence of alternative corroborative evidence, we are unable to comment on carrying value of inventory and realizable value of the same.
The amount has been spent by the company over the past years and the company does not have any inventory to be valued as on date as the inventory pertains to the production of films in the past and it is not practically verifiable at this point of time due to practical difficulties involved in the typical film production.
3. The Company has not submitted the confirmations of Trade Payables and Trade Receivables of Rs. 36.00/- (in lakhs). In the absence of alternative corroborative evidence, we are unable to comment on the extent to which such balances are payable ore receivable.
The company as per customary practice has issue letters to the trade creditors as well as to the Trade debtors and no response has been received and as such the company is not able to confirm the actual balances.
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 Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. An Internal committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees including trainees are covered under this policy.
PERSONNEL
The relationship between the management and the staff was very cordial throughout the year under review. Your directors take this opportunity to record their appreciation for the cooperation and loyal services rendered by the employees.
ACKNOWLEDGEMENTS
Your directors place on records their appreciation of the continuous assistance and co-operation extended to your Company by the valued customers, bankers, Reserve Bank India, SEBI, Bombay Stock Exchange Limited & National Stock Exchange of India Limited and all other regulatory Authorities. The Directors also sincerely acknowledge the significant contributions made by all the employees for their dedicated services to the Company.