To,
The Members of
VELS FILM INTERNATIONAL LIMITED
Your Directors are pleased to present the 5rrt Annual Report of your company together with Audited Financial statements for the year ended March 31, 2024.
1. FINANCIAL PERFORMANCE AND HIGHLIGHTS
Your Company's performance during the year ended March 31, 2024 as compared to the previous financial year, is summarized as beiow-
STANDALONE:
CONSOLIDATED:
2. DETAILS OF REVISION OF FINANCIAL STATEMENTS OR BOARD'S REPORT
Your Company has not revised the financial statements or Boards Report during the year.
3. AMOUNT, WHICH THE BOARD PROPOSES TO CARRY ANY RESERIVES
During the year, the Company has transferred the net loss of Rs. 1345.20 lakhs to Reserves. The Total reserves & surplus for the year ended 31" March 2024 stood at Rs. 3407.05 {In Lakhs)
4. DIVIDEND
During the year the Company has incurred a net loss of Rs. 1345.20 Lakhs and the Board of Directors of the Company have not recommended any dividend for the FY 2023-24.
5. PERFORMANCE REVIEW
The Company's Revenue from operation for 2023- 24 was Rs.1075.30 Lakhs as compared with Rs.5443.66 Lakhs during the previous year. The Company has resulted in a net loss after tax of Rs.1345.20 lakhs compared with a net profit after tax of Rs.658.46 Lakhs during the last year.
6. STATE OF AFFAIRS AND FUTURE OUTLOOK
a) State of the company?s affairs: During the year under review ended on 31" March 2024, your Company has earned Standalone loss of Rs. 1,34,520.40/- (in Thousands) and Consolidated loss of Rs.3,64,271.18/- (in Thousands) against the Standalone profit of Rs 65,846.40/- (in Thousands) and Consolidated Profit of Rs. 52,40.96 (in Thousands) for the corresponding period ended 31" March 2023
b) The Earnings per share (basic) were at Rs. (10.42) stood as on 31" March 2024 against Rs. 6.86 for the previous year. The company got listed in NSE and shares are traded at the SME platform of a nationwide Stock Exchange.
c) Change in the nature of business: No change in the Nature of Business.
d) Material changes arid commitments, if any. affecting the financial position of the company which has occurred between the end of the financial year of the company to which the Financial Statements relates and the date of the Report: Nil
7. CAPITAL STRUCTURE
The share capital of the Company as on 31J March 2024 is as mentioned below:
Increase in Authorised Share capital:
• During the reporting period, the Authorised share capital of the Company has not been increased .
Further during the Company has not issued
• Equity shares with Differential Rights
• Sweat Equity Shares
• Employee Stock options
• Shares to Trustees for Benefit of Employees
• Other securities which carries a right or option to convert into equity shares
8. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on Management Discussion and Analysis (MDA) Report as stipulated under Securities and Exchange Board of India {Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in this Report as Annexure-I.
9. STATEMENT OF UTILIZATION OF FUNDS RAISED THROUGH IPO UNDER REGUATION 32(1) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURES REQUIREMENTS) REGULATIONS, 2015
During the year under review, the Company has come up with Initial Public offer of 34,08.000 Equity Shares for cash at a price of Rs. 99/- per Equity Shares (including a premium of Rs. 89/- per Equity Shares), aggregating to Rs.33.73 Crores. Pursuant to Regulation 32(l)(a) and 32(l)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company hereby states that: There was no devlation(s) or variation(s) in the utilization of public issue proceeds from the objects as stated in the prospectus dated 27" February 2023.
10. ANNUAL RETURN
The details forming part of Annual Return as required under Section 92 of the Companies Act, 2013 will be made available at the website of the Company at https://velsfilminternational. com/
11. NUMBER OF BOARD MEETINGS
Dates for Board Meetings are well decided in advance and communicated to the Board and the intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. The information as required under Regulation 17(7) read with Schedule II Part A of the LODR is made available to the Board. The agenda and explanatory notes are sent to the Board in advance. The Board periodically reviews compliance reports of all laws applicable to the Company.
The Directors of the Company met 10 Times during the financial year 2023-2024.
12. CREDIT RATING
No Credit Rating was required to be obtained by the company.
13. COMPOSITION OF AUDIT COMMITTEE
Your Company has formed an Audit Committee as per the Companies Act, 2013 and Securities and Exchange 8oard of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. All members of the Audit Committee possess strong knowledge of accounting and financial management. During the year there are 04 (Four) meeting of an Audit committee was held, i.e. on 25.05.2023, 07.06.2023, 09.09.2023 and 14.11.2023. The primary objective of the Audit Committee is to monitor and provide an effective supervision of the Management?s financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting The Committee oversees the work carried out in the financial reporting process by the Management, the statutory auditor and notes the processes and safeguards employed by each of them. Further, the Audit Committee is also functional as per the provision of Section 177 of Companies Act, 2013 and Rules made thereunder and as per Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations. 2015.
14. COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE
Your Company has formed a Nomination & Remuneration Committee to lay down norms for determination of remuneration of the executive as well as non-executive directors and executives at all levels of the Company. The Nomination & Remuneration committee has been assigned to approve and settle the remuneration package with optimum blending of monetary and nonmonetary outlay. During the year there are 02 (Two) meeting of Nomination & Remuneration committee was held i.e. on 20.07.2023, 02.03.2024
15. DISCLOSURES PERTAINING TO CORPORATE SOCIAL RESPONSIBILITY
The Company has actively supported various initiatives in the areas of Health and Education during the Year Details about the CSR policy and initiatives taken by the Company during the Financial Year 2023-24 is annexed to this report (Annexure III).
16. COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The terms of reference are in line with Section 178 of the Companies Act, 2013 and Regulation 20 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year 01 (One) meeting of a Stakeholders Relationship Committee was held, i.e on 02.03.2024. Following are the details and attendance of Directors during the Board Meetings as well as its Committee:
•Resigned w.e.f 08"' March 2024
17. RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the FY 2023-24 with related parties were on an arm?s length basis and m the ordinary course of business. Brief of Related Party Transaction's pursuant to Section I34(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are attached in Form AOC-2 as Annexure-llt.
18. CORPORATE GOVERNANCE
Your company being responsible corporate citizen provides utmost importance to best Corporate Governance practices and always works in the best interest of its stakeholders. Your company has incorporated the appropriate standards for corporate governance. Pursuant to Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, The Company is not obligated to comply with provisions of certain regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
19. RISK MANAGEMENT
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the Meetings of the Audit Committee and the Board of Director of the Company.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the Provisions of Section 152 & 203 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Following changes in composition of Board of Director as on the date of report
However, the composition of the Board of Directors and Key Managerial Personnel remains same, with the exception of Mr Sankara Mudaliar Jagadeesan, who has resigned from his role as Director with effect from 08,h March, 2024.
Mr. Rangasamy Sivakumar was appointed as an Additional Director (Nonexecutive and Independent) w.e.f 08" June 2024 for a period of 5{five) years and who shall hold office till the date of the ensuing annual general meeting.
21. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they comply the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and as per SEBI (LODR) Regulations, 2015.
22. BOARD EVALAUTION:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 the Nomination and Remuneration Committee has carried out an Annual Performance Evaluation of the 8oard and of the Individual Directors has been made. During the year, the Evaluation cycle was completed by the Company internally which included the evaluation of the Board as a whole. Board Committees and Directors. The Evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience, performance of duties and governance issues etc Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as contribution, independent judgment and guidance and support provided to the Management. The results of the evaluation were shared with the Board, Chairman of respective Committees and individual Directors.
23. REMUNERATION POLICY
The Board of Directors on the recommendation of the Nomination & Remuneration Committee has framed a Policy for Directors, Key Managerial Personnel and other Senior Managerial Personnel of the Company, in accordance with the requirements of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations. The website link for the policy is - https://velsfilmlnternational.com/nomination- and-remuneration-policy-2/
24. DISCLOSURE REGARDING FRAUDS
There are no frauds reported during 2023-2024.
25. DETAILS OF VALUATION MADE WHILE TAKING LOAN FROM BANK OR FINANCIAL INSTITUTION :
The requirement to disclose details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the banks or financial institution along with the reasons thereof is not applicable
26. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
No application has been made under the insolvency and bankruptcy code: hence the requirement to disclose the details of application made or any proceeding pending under the insolvency and bankruptcy code 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable
27. LOAN FROM DIRECTORS AND RELATIVES :
The Company has outstanding loan as on 31" March 2024 from the directors as follows;
28. AUDITORS Statutory Auditor:
The Company's Statutory Auditor M/s. S R B R & Associates LLP , Chartered Accountants, Chennai (Firm Registration NO.004997S/S200051) was appointed in the Annual General Meeting held on 3111 December 2020 for a term of 5 years to hold office till the conclusion of AGM of the Company to be held in the year 2025. Pursuant to provisions of Section 143(12) of the Companies Act, 2013, as amended from time to time, the Statutory Auditors have not reported any Incident of fraud to the Audit Committee during the year under review.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. BP and Associates Practicing Company Secretaries to undertake the Secretarial Audit for F.Y 2023-24. Otherwise except as mentioned in the secretarial audit report, does not contain any qualifications, reservations, or adverse remarks or disclaimer. The Management has taken on record the remarks and it will duly comply it. The Board will adhere to all others Rules and Regulations has stipulated. The said report is attached to this report Annexure-IV. Internal Auditor:
Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Board based on the Recommendation of Audit Committee, appointed M/s. S B N & Co.. Chartered Accountants. Chennai as Internal Auditor of the Company for conducting internal audit of the Company for F.Y 2023-24.
29. DISCLOSURE UNDER SCHEDULE V (F) OF THE SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
Your Company does not have any unclaimed shares issued In physical form pursuant to public Issue/ Right issue.
30. SUBSIDIARY AND ASSOCIATE COMPANY
• Subsidiary Company- Vels Studios and Entertainment Private Limited
• Associate Company- Nil
• A statement containing salient features of the financial statements of Company's Subsidiary is given in the prescribed Form AOC-1 as an Annexure-V.
31. MATERIAL ORDERS OF REGULATORS
No such orders/event took place during the period under review.
32. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. The Company has implemented a vigil mechanism to provide a framework for the Company's employees and Directors to promote responsible and secure whistle blowing. It protects employees who raise a concern about serious irregularities within the Company.
33. DETAILS OF REMUNERATION OF EMPLOYEES None of the Employees come under the Rule 5(2) of the companies (Appointment and remuneration of Managerial personnel) Rules 2014.
The Statement containing such particulars of employees as required in terms of provision of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies of Section 197(12) of the Act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Annual Report. Pursuant to the provision of the Section 136(1) of the Companies Act, 2013, the reports and accounts, as set out therein, are being sent to all the members of the Company, excluding the aforesaid information and the same Is open for inspection at the registered office of the Company during working hours upto the date of the Annual General Meeting and if any members are interested in obtaining such information, may write to the Director at the Registered Office of the Company in this regard.
34. DEPOSITS
During the period under review, the Company had not accepted any fixed deposits with the meaning of Section 73 to 76 of the Companies Act, 2013.
35. LOANS, GUARANTEES OR INVESTMENTS During the Year under review the Company has not given any loan or provided any guarantee or security in favour of other parties and has also not made any investment of its fund with any other party under Section 186 of Companies Act, 2013. However, the Company has an outstanding balance of Loans and advances given towards its subsidiary Company M/s. Vels Studios and Entertainment Private Limited of Rs. 53,05,35,588/
36. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OF REPORT
There have no material changes and commitments affecting the financial position of the Company which have occurred between the date of the Balance Sheet and the date of this Report.
There are no any significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
37. ENERGY CONSERVATION, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:
(a) Conservation of Energy:
We continue to strengthen our energy conservation efforts. We are always in lookout for energy efficient measures for operation, and value conservation of energy through usage of latest technologies for quality of services. Although the equipment's used by the Company are not energy sensitive by their very nature, still the Company is making best possible efforts for conservation of energy, which assures that the computers and all other equipment's purchased by the Company strictly adhere to environmental standards, and they make optimum utilization of energy.
(b) Absorption of Technology:
In this era of competition, in order to maintain and increase the clients and customers, we need to provide best quality services to our clients and customers at minimum cost, which is not possible without innovation, and adapting to the latest technology available in the market for providing the services.
(c) Foreign Exchange Earnings and Outgo:
Foreign Exchange Earnings 163.12 Lakhs and Foreign Exchange Outgo Nil during the F.Y 2023- 24.
(d) Research &Development:
The Company believes that In order to improve the quality and standards of services, the Company should have a progressive Research and Development Process, which should keep on increasing along with the scale of operations of the Company.
38. STATEMENT PURSUANT TO SECTION 197(2) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in this Report as Annexure-VI which forms a part of this Report.
39. DETAILS OF SICKNESS OF THE COMPANY Not Applicable to the company
40. FAILURE TO COMPLETE BUY BACK Not Applicable to the company
41. COST AUDITOR AND COST AUDIT REPORT
Your company does not come under the ambit of section 148 of the Companies Act, 2013. Hence appointment of cost auditor and cost audit report does not apply to the company.
42. EXPLANATIONS IN RESPONSE TO AUDITORS' QUALIFICATIONS
The Auditors' Report on the Balance Sheet and Profit and Loss Account for the Year ending 31st March 2024 is self-explanatory and contains no qualification, reservations, adverse remarks and disclaimer.
43. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Board members are provided with necessary documents/brochures, reports and Internal policies to enable them to familiarize with the Company's procedures and practices, the website link is available at - www.velsfilm international, com.
44. INTERNAL FINANCIAL CONTROLS
The Company has put In place an adequate system of internal financial controls with respect to the Financial Statement and commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of business. No reportable material weakness in the operation was observed.
45. VIGIL MECHANISM/WHISTLE BLOWER POLICY 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 the Section
177(9) of the Act and as per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
46. OBLIGATION OF YOUR COMPANY UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT. 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The below table provides details of complaints received/disposed during financial year 2022-23: Number of complaints at the beginning of the financial year: Nil
No. of complaints filed during the financial year: Nil
No. of complaints disposed during the financial year: Nil
No. of complaints pending at the end of the financial year: Nil
47. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the requirement clause (c) of subsection (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:
i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.
ii. 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 of the profit and loss of the Company for that period;
iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. They have prepared the annual accounts on a going concern basis;
v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively ; and
vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
48. COMPLIANCE OF SECRETARIAL STANDARDS 1 AND 2
Your Directors confirms that pursuant to Section 118(10) of the Companies Act, 2013, applicable Secretarial Standards, i.e. SS-1 and SS- 2, pertaining to Meeting of Board of Directors and General Meetings, respectively specified by the Institute of Company Secretaries of India (ICSI) have been duly complied by the Company. The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
49. CFO CERTIFICATION
The Chief Financial Officer of the Company give annual certification on financial reporting and internal controls to the Board in terms of Regulation 17 (8) of the Listing Obligations. The Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2) of the Listing Regulations. The Annual Certificate given by the Chief Financial Officer is attached In Annexure-6.
50. ACKNOWLEDGEMENT
Your company wishes to place this on record with appreciation to all Employees, Investors, vendors and Bankers for their continued support during the year. We are grateful to the various authorities like Tax Departments of Central and State Departments, Tax authorities, Ministry of Corporate Affairs, NSDL, CDSL and the National Stock Exchange of India Limited for their continued cooperation We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.