To,
The Members
Your Directors have pleasure in presenting the Fifteenth Annual Report of your Company along with Audited Statement of Accounts for the financial year ended 31 March, 2023.
FINANCIAL SUMMARY OF THE COMPANY
The Financial Performance of your Company for the year ended 31 March, 2023 is summarized below:
(Amount in Rs. ‘000)
REVIEW OF OPERATION
During the year under review, the Standalone Revenue of the Company has increased percentage of 56.40% over the previous year.
Your Company had a Net loss after tax of Rs. 1,985.17 thousand during the year as compared to Net profit of Rs. 54.30 thousand of previous year.
MATERIAL CHANGES
There have been no material changes and commitments affecting the financial position of the company, which have occurred since 31st March 2023, being the end of the Financial Year of the Company to which financial statements relate and date of the report.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the applicable provisions of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, ' 3,089/- of unpaid/unclaimed dividend was transferred during the year to the Investor Education and Protection Fund.
CHANGES IN ACCOUNTING POLICY
There is no change in accounting policy during the year.
DIVIDEND & RESERVES
In view of the planned business growth, the directors are unable to recommend dividend for the year under review, nor do they propose to carry any amount to reserves.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Your Company has neither a Subsidiary Company nor a Joint Venture Company during the year under review. Associate companies details are as under:
PUBLIC DEPOSITS
During the year the Company has not accepted any deposit under Section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014.
BORROWINGS
During the year, the Company has not obtained any cash credit facilities.
SHARE CAPITAL
The Paid-up Equity Share Capital as on 31st March, 2023 stood at '. 3,89,64,960. The Company has not during the year under report issued any shares with or without differential voting rights, granted stock options or issued sweat equity shares.
CHANGE IN REGISTERED OFFICE OR NATURE OF BUSINESS
During the year, the Registered Office of the Company has been shifted from "9, Lal Bazar Street, Mercantile Building, 3rd Floor, Kolkata - 700001" to "12, Free School Street, Kolkata - 700016" with effect from January 16, 2023.
SIGNIFICANT AND MATERIALS ORDERS PASSED BY THE REGULATORS OR COURT TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant materials orders passed by the Regulators/ Courts/ Tribunals which would impact the going concern status of the Company and its future operations.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments covered under Section 186 of Companies Act, 2013 forms the part of the Notes to the financial statements provided in this Annual Report.
DIRECTORS & KEY MANAGERIAL PERSON DIRECTORS:
Your Board comprises of 4 Directors including 2 Independent Directors. Independent Directors provide their declarations both at the time of appointment and annually confirming that they meet the criteria of independence
as prescribed under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the Financial Year 2022-2023 your Board met 5 (Five) times details of which are available in Corporate Governance Report annexed to this report.
KEY MANAGERIAL PERSONNEL
The following employees were designated as whole-time key managerial personnel by Board of Directors during the year 2022-2023, pursuant to section 203 of Companies Act 2013 and rules made thereon:
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149 OF THE COMPANIES ACT, 2013
As at the end of the financial year, there are 2 (Two) Non-Executive Independent Directors on the Board of the Company.
The Company has received necessary declaration from all Independent Directors under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 and 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board is of the opinion that the Independent Directors of the Company hold the highest standards of integrity and possess requisite expertise, proficiency and experience required to fulfil their duties as Independent Directors.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to requirements under section 134(5) of the Companies Act, 2013 the Board, to the best of its knowledge and belief, confirms that:
(i) The applicable accounting standards have been followed in preparation of annual accounts for the financial year ended 31st March, 2023 and proper explanations have been furnished relating to material departures;
(ii) Accounting policies have been selected and applied consistently and prudent judgments and estimates have been made so as to give a true and fair view of state of affairs of the Company at end of financial year and of profit and loss of the Company for the year under review;
(iii) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The annual accounts for the financial year ended 31st March, 2023 have been prepared on a going concern basis;
(v) Internal financial controls are in place and that such financial controls are operating effectively;
(vi) Adequate systems to ensure compliance with the provisions of all applicable laws are in place and are operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultant(s) and the reviews made by the Management and the relevant Board Committees including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and operationally effective during FY 2022-2023.
BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
In a separate meeting of independent directors, performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the view of non-executive director.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed.
Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
BOARD COMMITTES
During the period under review, the Board of Directors has following committees:
(a) The Audit Committee
(b) The Nomination and Remuneration Committee
(c) The Stakeholders Relationship Committee
The details of the above mentioned committees have been disclosed separately in the Corporate Governance Report which is annexed to and forms a part of this Annual Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.
CEO AND CFO CERTIFICATION
In accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,the Managing Director and Chief Financial Officer of the Company has submitted a certificate for the year ended31st March, 2023 to the Board of Director.
AUDITORS:
STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act, 2013, the Members at the Annual General Meeting (AGM) held on September 28, 2018 had approved the appointment of M/s. J N Agarwal & Co., Chartered Accountants for a term of 5 (five) consecutive years.
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 appointment Mr. Sourav Kedia, a Company Secretary in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure - I.
INTERNAL AUDITOR
Pursuant to the provision of section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014 the Company has appointed Mr. Samit Kumar Baid to undertake the Internal Audit of the Company for the F.Y. 2022-2023. There stood no adverse finding & reporting by the Internal Auditor in the Internal Audit Report forthe year ended 31st March, 2023.
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The Auditor Report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Reports of the auditors are given as an annexure which forms part of this report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has policy for Internal Financial Control System, commensurate with the size, scale and complexity of its operations. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The scope and authority of the Internal Audit function is defined in the internal financial control policy. The Internal Auditor monitors and evaluates the efficiency and adequacy of Internal Financial control system in the company, its compliance with operating systems, accounting procedures and policies. To maintain its objectivity and independence, the internal auditor reports to the Chairman of the Audit Committee of the Board, the internal audit report on quarterly basis and same are reviewed by the committee. The observation and comments of the Audit Committee are placed before the board.
The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate Governance over the years and it is a continuous and ongoing process. A detailed Report on Corporate Governance practices followed by our Company in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, together with a Certificate from the Secretarial Auditors confirming compliance with the conditions of Corporate Governanceare provided separately in this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top 1000 listed entities based on market capitalization are required to furnish Business Responsibility and Sustainability Report (BRSR). However, as the Company does not fall under the list of top 1000 companies basis market capitalization, the requirement of furnishing BRSR is not applicable upon the Company for the financial year 2022-23.
POLICIES ADOPTED BY THE COMPANY:
1. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment and unfair treatment. The company has adopted a Whistle Blower policy to establish a vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or ethics policy. The said policy is available at www.encashentertainment.com
2. NOMINATION & REMUNERATION POLICY
In accordance with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, the Board of Director of the Company on recommendation of the Nomination & Remuneration Committee have adopted the criteria for determination of qualification, positive attributes and independence of Directors, Remuneration of Senior Management Personnel(including Key Management Personnel) and Remuneration of Other Employees. The above mentioned criteria and Policies are available at www.encashentertainment.com.
3. CORPORATE SOCIAL RESPONSIBILITY
The Company had not taken any initiatives on the activities of Corporate Social Responsibilities as the provision relating to the same are not applicable to the company
4. RISK MANAGEMENT POLICY
Your Company actively stimulates entrepreneurship throughout the organization and encourages its people to identify and seize opportunities. The current economic environment, in combination with significant growth ambitions of it, carries an evolving set of risks. Encash recognizes that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. Risk and opportunity management is therefore a key element of the overall Encash strategy. This section provides an overview of the key strategic risks, Encash's risk and control framework, and its approach to risk management.
5. DISCLOSURE ON POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT
The company has adopted the policy on redressal of Sexual and Workplace Harassment as per the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013 [‘'Sexual Harassment Act'']. The Company believes that it is the responsibility of the organization to provide an environment to its employee which is free of discrimination, intimidation and abuse and also to protect the integrity and dignity of its employees and also to avoid conflicts and disruptions in the work environment. Further there stood no cases filed during the year under review.
6. RELATED PARTY TRANSACTIONS POLICY
In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party Transactions which is also available on the Company's website.
The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. During the year under review, the Policy was amended in line with the changes in applicable laws.
OTHER DISCLOSURES
a. RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on the Company's website at www.encashentertainment.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All Related Party transactions entered during the year were placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on annual basis for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arm's length basis. All Related Party Transactions entered during the year were in ordinary course of the business and on arm's length basis. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - II in Form AOC-2 and the same forms part of the Board's report.
b. EXTRACT OF ANNUAL RETURN
In accordance with the provisions of the Companies Act, 2013, the Annual Return of the Company in the prescribed form is available on the website of the Company https://encashentertainment.com/annual-return/
c. REPORTING OF FRAUDS BY AUDITORS
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Board or Audit Committee, as required under Section 134(3)(ca) and 143(12) of the Companies Act,2013, any instances of frauds committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
d. SECRETARIAL STANDARDS
The Company complies with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
e. DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The requisite details 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 to the Board's Report.
f. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto is disclosed in Form No. AOC -2, as annexed herewith.
g. INSOLVENCY AND BANKRUPTCY CODE
No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of any application made, or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 is not applicable for the year under review
h. DIFFERENCE BETWEEN AMOUNT AND VALUATION
The requirement to disclose the details of any difference between the valuation done at the time of a one- time settlement and the valuation done while taking loan from banks or financial institutions, along with the reasons thereof, is not applicable for this year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
Since the Company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars relating to conservation of energy, technology absorption and foreign exchanges earning and outgo, as prescribed under the provisions of Section 134(3)(m) of the Companies Act, 2013, are not applicable.
LEGAL AND OTHER INFORMATION NOT AFFECTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
Your company has filed a civil suit at the Hon'ble High Court at Kolkata, against Mr. Rakesh Singh and others for protection for our copyrights in respect of bengali feature film 'Ichhe'. Mr. Rakesh Singh has entered in to an agreement dated 8th June, 2011 with ourselves, assigning entire copyrights of Bengali color film 'Ichhe'. The film as released on 15th July, 2011 at several cinema halls in and around Kolkata, infringing our copyrights and violating the terms of captioned agreement. We have sought relief by restraining respondents to infringe copyrights, injunction to keep custody of negative etc., transfer of the negative etc. in our favour, injunction render accounts from exploitation of such movie and its audio rights, injunction to restraining respondent to receive any benefit from that movie, handling over the distributor's share to our favour, court receiver to be appointed for collection etc.
Hon'ble High Court at Kolkata vide its order dated 8th September, 2011 granted an order of injunction restraining the first and second defendants from realizing or appropriating and part of the proceeds arising out of the exhibition of the cinematograph film 'Ichhe'. The third defendant is injuncted from dealing with or disposing of or encumbering or exploiting the satellite and television rights relating to the film in any manner without the previous leave of court.
Hon'ble High Court at Kolkata vide its order dated 8th September, 2011 appointed Mr. Arindam Sinha advocate as receiver for the purpose of collecting all proceeds arising out of the exhibition of the cinematograph film 'Ichhe' from all the exhibitors (Cinema Halls).
ACKNOWLEDGEMENTS
Your Directors take the opportunity to thanks the Regulators, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the company viz. customers, members, vendors, banks and others business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution of the company.