The Members of
Prime Focus Limited
Your Company's Directors are pleased to present the Twenty-Second Annual Reporttogether with Audited Financial Statements for financial year ended March 31 2019.
1. FINANCIAL PERFORMANCE SUMMARY
The Consolidated and Standalone Audited Financial Results for the financial year endedMarch 31 2019 are as follows:
| || || || ||(Rs. Crores) |
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Income from services ||2510.62 ||2227.52 ||152.56 ||136.44 |
|Other operating income ||29.63 ||29.96 ||9.53 ||8.88 |
|Total revenue from operations ||2540.25 ||2257.48 ||162.09 ||145.32 |
|Less: Expenses ||2485.48 ||2118.39 ||179.03 ||167.38 |
|Add: Other income ||123.49 ||34.44 ||41.12 ||26.76 |
|Less: Finance costs ||236.68 ||212.30 ||57.39 ||74.13 |
|Less: Tax expense ||(25.48) ||5.63 ||0.06 ||(12.83) |
|Less: Minority interest ||(10.24) ||8.78 ||- ||- |
|Loss for the year ||(22.71) ||(53.18) ||(33.27) ||(56.60) |
2. OPERATIONS AND PERFORMANCE REVIEW
During the year under review total revenue from operations of the Company and itssubsidiaries stood at Rs.2540.25 crores as compared to Rs.2257.48 crores in the previousyear. Loss before tax during the year was Rs.(58.42) crores as compared to Rs.(38.77)crores in previous year. The Net Loss after tax was Rs.(22.71) crores as compared toRs.(53.18) crores in previous year.
Total revenue from operations of the Company during the year was Rs.162.09 crores ascompared to Rs.145.32 crores in the previous year. Loss before tax during the year wasRs.(33.21) crores as compared to Rs.(69.43) crores in the previous year. The Net Lossafter tax was Rs.(33.27) crores as compared to Rs.(56.60) crores in the previous year.
A detailed analysis on the Company's performance both Consolidated & Standaloneis included in the "Management Discussion & Analysis" Report which formspart of this Annual Report.
In view of the losses in Financial Year 2018-19 your Board did not recommend anydividend for its equity shares.
4. TRANSFER TO RESERVES
During the year under review the company has transferred Rs.22.28 crores fromDebenture Redemption Reserve to General Reserve.
5. SHARE CAPITAL
The paid-up equity share capital of the Company as on March 31 2019 was '299182312comprising of 299182312 equity shares of Rs.1/- each. During the year under review theCompany has allotted 16667 equity shares of Rs.1/- each pursuant to exercise of employeestock options. The Company has neither issued share with differential voting rights norsweat equity. As on March 31 2019 none of the Directors of the Company hold instrumentsconvertible into equity shares of the Company.
6. SECRETARIAL STANDARDS
The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India (ICSI) and approved by the Central Governmentunder Section 118 (10) of the Companies Act 2013 (the Act) for the Financial Year ended2018-19.
7. EMPLOYEE STOCK OPTION SCHEME (ESOP)
The Company has implemented 'PFL-ESOP Scheme 2014' compliant with the SEBI (Share BasedEmployee Benefits) Regulations 2014 to reward and retain the qualified and skilledemployees and to give them an opportunity to participate in the growth of the Company;these schemes are administered by the Compensation Committee of the Company.
Pursuant to the applicable provisions of the Act and the Securities Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 'PFL-ESOP Scheme 2014' Clause3.13 has undergone amendment wherein "Exercise Period" has now been increased to5 years from 2 years.
A certificate from the Statutory Auditors of the Company as required under Regulation13 of the SEBI (Share Based Employee Benefits) Regulations 2014 shall be placed at theensuing Annual General Meeting for inspection by the Members. The disclosures as requiredunder Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 readwith SEBI Circular dated June 16 2015 are accessible on Company's website athttp://www.primefocus.com/sites/default/ files/pdf/ESOP Disclosure 2018-19.pdf .The details of Employee Stock Options form part of the Notes to accounts to financialStatements in this Annual Report. No employee of the Company received grant of optionsduring the year amounting to 5% or more of the options granted or exceeding 1% of issuedcapital of the Company.
8. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of financial year of the Company to whichthe Financial Statements relate and the date of this Report. There has been no change inthe nature of business of the Company.
9. DISPOSAL OF INVESTMENT HELD BY THE COMPANY IN GENER8 INDIA MEDIA SERVICES LIMITED(CURRENTLY KNOWN AS DNEG INDIA MEDIA SERVICES LIMITED) ITS WHOLLY OWNED SUBSIDIARY
The Company has executed a share purchase agreement on January 31 2019 for sale of100% equity shares of its wholly owned subsidiary Gener8 India Media Services Limited(currently known as DNEG India Media Services Limited) to DNEG Creative Services Limited(formerly known as Prime Focus World Creative Services Private Limited) a subsidiary ofthe Company for an aggregate consideration not exceeding '1309800000/- (Rupees OneHundred and Thirty Crores and Ninety Eight Lakhs only) and on the terms and conditions ascontained in the said share purchase agreement.
10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant or material orderspassed by the Regulators or Courts or Tribunal which would impact the going concern statusof the Company and its future operation.
11. RISK MANAGEMENT
The Company is exposed to inherent uncertainties owing to the sectors in which itoperates. A key factor in determining a Company's capacity to create sustainable value isthe risks that the company is willing to take (at strategic and operational levels) andits ability to manage them effectively. Many risks exist in a Company's operatingenvironment and they emerge on a regular basis. The Company's Risk Management processesfocuses on ensuring that these risks are identified on a timely basis and addressed.
The Company is well aware of the above risks and as part of business strategy has arobust risk management framework to identify evaluate and mitigate business risks withtimely action. This framework seeks to enable growth create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantageby undertaking effective steps to manage risks.
12. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Audit Committee reviews adequacy and effectiveness of the Company's internalcontrol environment and monitors the implementation of audit recommendations includingthose relating to strengthening of the Company's risk management policies and systems. Forfurther details please refer to the Management Discussion and Analysis Report which formsa part of the Annual Report.
13. HUMAN RESOURCES
Human Resource is considered as one of the most critical resource in the business whichcan be continuously smoothened to maximize the effectiveness of the organization. HumanResource build the Enterprise and the sense of belonging would inculcate the spirit ofdedication and loyalty amongst them towards strengthening the Company's Policies andSystems. All personnel continue to have healthy cordial and harmonious approach therebyenhancing the contributory value of the Company. The Company has generally enjoyed cordialrelations with its personnel. Further the total number of permanent employees of theCompany as on March 31 2019 is 581.
14. PREVENTION OF SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and has a mechanismin place for prevention prohibition and redressal of sexual harassment at workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder. The Company is committed toprovide equal opportunities without regard to their race caste sex religion colournationality disability etc. All employees are treated with dignity with a view tomaintain a work environment free of sexual harassment whether physical verbal orpsychological. All employees (permanent contractual temporary trainees) are covered.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment at workplace. During the year underreview Company has not received any complaints on sexual harassment and as such theCompany has not disposed of any complaints. There are no complaints pending as on the endof the Financial Year 2018-19 on sexual harassment.
15. REDEMPTION OF DEBENTURES
During the financial year under review your Company has made payment of redemptionamount and interest to debenture holders. The details of redemption are as mentionedbelow:-
|Sr. No. ||Type of Security ||Redemption Date ||No. of Security ||Face Value (Rs.) |
|1 ||Series B-Zero Coupon Unsecured Redeemable Non-Convertible Debentures ||November 02 2018 ||891 ||1000000/- |
16. PUBLIC DEPOSITS
The Company has not accepted any deposits from the public falling within the ambit ofSection 73 and 76 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.
17. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Act andRule 12 of the Companies (Management and Administration) Rules 2014 is annexed as Annexure-Ato this Report and is available on the website of the Company at http://www. primefocus.com/sites/defauit/files/pdf/AnnualReturn 2018-19.pdf .
18. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of the Act Regulation 33 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as "SEBI Listing Regulations") and applicableAccounting Standards the Audited Consolidated Financial Statements of the Company for thefinancial year 2018-19 together with the Auditors' Report form part of this AnnualReport.
19. SUBSIDIARY COMPANIES JOINT VENTURE AND ASSOCIATE COMPANIES
A statement containing the salient features of financial statements ofsubsidiaries/joint venture companies of the Company in the prescribed Form AOC-1 forms apart of Consolidated Financial Statements (CFS) in compliance with Section 129 (3) andother applicable provisions if any of the Act read with Rule 5 of the Companies(Accounts) Rules 2014.
The said Form also highlights the financial performance of each of the subsidiariesincluded in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts)Rules 2014.
In accordance with Section 136 of the Act the financial statements of the subsidiaryand associate companies are available for inspection by the members at the RegisteredOffice of the Company during business hours on all working days except Saturdays andnational holidays upto the date of the Annual General Meeting of the Company i.eSeptember30 2019. Any member desirous of obtaining a copy of the said financial statements maywrite to the Company Secretary at the Registered Office of the Company. The financialstatements including the CFS and all other documents required to be attached to thisreport have been uploaded on the website of the Company at www.primefocus.com.
The company has 44 subsidiaries as on March 31 2019. During the financial year thefollowing changes have taken place in subsidiary companies:-
a. Companies which have become subsidiary Company:
1. Apptarix Mobility Solutions Private Limited
2. Prime Focus MEAD FZ LLC
3. Re:Define FX Ltd.
Note: Jam8 Prime Focus LLP became subsidiary of the Company w.e.f. April 22 2019
b. Companies which ceased to be Subsidiary Company:
1. DNEG India Media Services Limited (formerly known as Gener8 India Media ServicesLimited) ceased to be a direct subsidiary of Prime Focus Limited w.e.f. January 31 2019.
2. Double Negative Canada Productions Ltd Gener8 Digital Media Services Ltd PrimeFocus Creative Services Canada Inc Amalgamated Into Double Negative Canada Productions Ltdand pursuant to amalgamation the shares in the amalgamated company were transferred fromDouble Negative Holdings to Prime Focus World NV.
3. Double Negative Montreal Productions Ltd Prime Focus Creative Services MontrealInc Gener8 Digital Montreal Media Services Ltd amalgamated into Double Negative MontrealProductions Ltd and pursuant to amalgamation the shares in the amalgamated company weretransferred from Double Negative Holdings to Prime Focus World NV.
c. Name changes:
1. Name of Prime Focus Visual Effects Private Limited has been changed to Prime FocusProduction Services Private Limited w.e.f. August 06 2018
2. Name of Prime Focus 3D India Private Limited was changed to PF Digital MediaServices Private Limited w.e.f. August 06 2018. Further pursuant to the conversion ofthe company from "Private Limited" to "Public Limited" the name of theCompany changed from PF Digital Media Services Private Limited to PF Digital MediaServices Limited w.e.f. March 26 2019.
3. Name of Prime Focus VFX Limited has been changed to Re:Define FX Ltd. w.e.f.November 09 2018.
4. Name of Gener8 India Media Services Limited has been changed to DNEG India MediaServices Limited w.e.f. March 27 2019.
5. DNEG Creative Services Private Limited has been converted from a private limitedcompany to a public limited company and consequently it is named as DNEG Creative ServicesLimited w.e.f. April 16 2019.
d. Joint Venture/Associate Companies:
During the financial year under review there are no Companies which has become orceased to be Associate/Joint Venture.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
i. The steps taken to or impact on conservation of energy-
Although the Company is not engaged in manufacturing activities as a responsiblecorporate citizen we continue to pursue and adopt appropriate energy conservationmeasures. The Company makes every effort to conserve energy as far as possible in itspostproduction facilities Studios Offices etc. The Company also takes significantmeasures to reduce energy consumption by using energy efficient computers and bypurchasing energy efficient equipment. The Company purchases PCs laptops airconditioners etc. that meet environment standards wherever possible and replace oldequipment with more energy-efficient equipment.
ii. The Steps taken by the Company for utilizing alternate sources of energy-Notapplicable.
iii. The capital investment on energy conservation equipment's-The
Company constantly evaluates new developments and invests into latest energy efficienttechnology.
B. TECHNOLOGY ABSORPTION
i. The efforts made towards technology absorption-The Company adopts the latesttrends in the technology development and introduces the same so as to ensure reduction incost with best quality output.
ii. The benefits derived like product improvement cost reduction Product developmentor import substitution
- Not applicable.
iii. IMPORTED TECHNOLOGY
(a) The details of technology imported-Not Applicable
(b) The year of import-Not applicable
(c) Whether the technology has been fully absorbed-Not applicable.
(d) If not fully absorbed-Not applicable
iv. Expenditure incurred on Research and Development (R&D):
Your company is predominantly a service provider and therefore has not set up a formalR&D unit however continuous research and development is carried out at variousdevelopment centers as an integral part of the activities of the Company.
(C) PARTICULARS OF FOREIGN CURRENCY EARNINGS AND OUTGO:
|Particulars ||March 31 2019 ||March 31 2018 |
|Foreign Exchange Earned: Revenue from operations and interest income ||2.86 ||7.53 |
|Foreign Exchange Outgo: Technical service cost repairs and maintenance interest and others ||3.65 ||0.75 |
21. MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis Report for the financial year ended March 31 2019as stipulated under Regulation 34 of SEBI Listing Regulations is included as a separatesection forming part of this Annual Report.
22. CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Practicing Company Secretary confirming compliance of CorporateGovernance norms as stipulated in Regulation 34 read along with schedule V of SEBI ListingRegulations is included in the Annual Report for the Financial Year 2018-19.
As per the relevant provisions of the Act and SEBI Listing Regulations during thefinancial year under review the following changes in Directors are detailed as follows:
i) Resignation of Directors
Mr. Amit Bapna (DIN: 00008443) (Nominee of Reliance Mediaworks Financial ServicesPrivate Limited wholly owned subsidiary of Reliance Mediaworks Limited) resigned asNon-Executive Director w.e.f. May 30 2018 due to pre-occupancy.
Upon the recommendation of Nomination and Remuneration Committee of the Board Mr.Anand Natarajan (DIN: 00061109) was appointed as an Additional Director of the Company (asa Nominee of Reliance Mediaworks Financial Services Private Limited wholly ownedsubsidiary of Reliance Mediaworks Limited) w.e.f. May 30 2018 in place of Mr. Amit Bapnaand his appointment was regularized by the Members of the Company as Non-Executive NonIndependent Director at the Annual General meeting of the Company on September 28 2018.Due to pre-occupation Mr. Anand Natarajan Non-executive Non Independent Director of theCompany resigned as a Director w.e.f. December 21 2018.
The Board placed on record its appreciation for the services rendered by Mr. Amit Bapnaand Mr. Anand Natarajan during their tenure with the Company.
ii) Appointment of Directors
At the last Annual General Meeting of the Company held on September 28 2018 Mr.Ramakrishnan Sankaranarayanan (DIN: 02696897) was re-appointed as a Director of theCompany liable to retire by rotation and special resolution was passed by theShareholders of the Company towards continuation of directorship of Mr. G. P Aiyar (DIN:02722981) as Non-Executive Independent Director of the Company.
iii) Change in designation
Designation of Mr. Namit Malhotra (DIN 00004049) Director of the Company was changedto Non-Executive Director from Chairman Chief Executive Officer and Executive Director ofthe Company w.e.f. February 14 2019 and Mr. Naresh Malhotra (DIN 00004597) Whole TimeDirector of the Company was also appointed as Chairman of the Company w.e.f. February 142019.
iv) Retirement by Rotation
In accordance with the provisions of Section 152 of the Act read with Companies(Management & Administration) Rules 2014 Mr. Namit Malhotra (DIN: 00004049)Director of the Company retires by rotation at the ensuing Annual General Meeting andbeing eligible offer himself for re-appointment.
v) Re-appointment of Independent Directors whose term of office is expiring at theensuing Annual General Meeting:
a. Mr. Srinivasan Kodi Raghavan (DIN: 00012449)
Mr. Padmanabha Gopal Aiyar (DIN: 02722981) and Mr. Rivkaran Singh Chadha (DIN:00308288) were appointed as Independent Directors of the Company at the 17thAnnual General Meeting to hold office for 5 (five) consecutive years upto the conclusionof the ensuing Annual General Meeting and being eligible and seeking re-appointment haveconsented to act as Independent Directors of our Company in respect of whom the Companyhas received a notice in writing under Section 160 of the Act from a member proposingtheir candidature in the ensuing Annual General Meeting for another term of 5 years uptothe conclusion of the 27th Annual General Meeting of the Company. The Board hasrecommended their re-appointment pursuant to the recommendation of Nomination andRemuneration Committee.
b. The term of office of Dr. (Mrs.) Hemalatha Thiagarajan (DIN: 07144803) IndependentDirector will expire on March 30 2020. Dr. (Mrs.) Hemalatha Thiagarajan being eligibleand seeking re-appointment has consented to act as Independent Director of your Companyin respect of whom the Company has received a notice in writing under Section 160 of theAct from a member proposing her candidature in the ensuing Annual General Meeting foranother term of 5 years w.e.f. March 31 2020 to March 30 2025. The Board has recommendedher re-appointment pursuant to the recommendation of Nomination and RemunerationCommittee.
The Board recommends for the above appointment /reappointment. Items seeking yourapproval on the above are included in the Notice convening the Annual General Meeting.Brief resume and other requisite details as stipulated under SEBI Listing Regulations andSecretarial Standard- 2 on General Meetings of the directors beingappointed/re-appointed/whose remuneration is proposed to be increased/fixed forms part ofthe Notice of the ensuing Annual General Meeting.
24. DECLARATION BY INDEPENDENT DIRECTORS
Every Independent Director at the first meeting of the Board after appointment andthereafter at the first meeting of the Board in every financial year or whenever there ischange in the circumstances which may affect his status as the independent director isrequired to provide the declaration that he/she meets the criteria of independence asprovided under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI ListingRegulations.
In accordance with the above the Company has received necessary declaration from eachindependent director under Section 149(7) of the Act that he/she meets the criteria ofindependence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of SEBIListing
Regulations. Further all the Independent Directors have affirmed that they haveadhered and complied with the Company's Code of Conduct for Independent Directors which isframed in accordance with Schedule IV of the Act.
In the opinion of the Board all the Independent Directors fulfills the criteria ofindependence as provided under the Act Rules made thereunder read with the SEBI ListingRegulations and are independent of the management.
25. KEY MANAGERIAL PERSONNEL (KMP)
During the year under review designation of Mr. Namit Malhotra was changed fromChairman Chief Executive Officer and Executive Director to Non-Executive Director of theCompany w.e.f. February 14 2019.
Further the following Directors/Executives continued as KMPs during Financial Year2018-19:
^ Mr. Ramakrishnan Sankaranarayanan Managing Director ^ Mr. Nishant Fadia ChiefFinancial Officer ^ Ms. Parina Shah Company Secretary and Compliance Officer
26. BOARD EVALUATION
Pursuant to the provisions of the Act and the corporate governance requirements asprescribed by SEBI Listing Regulations annual evaluation of the performance of the Boardits Committees and of individual directors has been made.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors were carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The Nomination and RemunerationCommittee also reviewed the performance of the Board its Committees and of the Directors.
The criteria for performance evaluation of the Board included aspects like Boardcomposition and structure; effectiveness of Board processes information and functioningetc. The criteria for performance evaluation of Committees of the Board included aspectslike composition of Committees effectiveness of Committee meetings etc. The criteria forperformance evaluation of the individual Directors included aspects on contribution to theBoard and Committee meetings like preparedness on the issues to be discussed meaningfuland constructive contribution and inputs in meetings etc. In addition the Chairperson wasalso evaluated on the key aspects of his role. The Criteria for performance evaluation ofIndependent Directors included aspects like Invests time in understanding the company andits unique requirements; Brings in external knowledge and perspective to the table fordiscussions at the meetings; Expresses his/her views on the issues discussed at
the Board; and keeps himself/herself current on areas and issues that are likely to bediscussed at the Board level.
Criteria for Determining Qualifications Positive Attributes and Independence of aDirector
In terms of the provisions of Section 178(3) of the Actand Regulation 19 of the SEBIListing Regulations the Nomination and Remuneration Committee (NRC) has formulated thecriteria for determining qualifications positive attributes and independence ofDirectors the key features of which are as follows:
Qualifications-The Board nomination process encourages diversity of thoughtexperience knowledgeage and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.
Positive Attributes-Apart from the duties of Directors as prescribed in the Actthe Directors are expected to demonstrate high standards of ethical behaviorcommunicationskills and independent judgment. The Directors are also expected to abide by therespective Code of Conduct as applicable to them.
Independence-A Director will be considered independent if he/she meets thecriteria laid down in Section 149(6) of the Act the Rules framed thereunder andRegulation 16(1)(b) of the SEBI Listing Regulations.
Familiarisation Programme for Independent Directors
Pursuant to Regulation 25(7) of the SEBI Listing Regulations and the requirement ofSecurities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 datedSeptember 15 2014 the Company has in place a programme for familiarisation of theIndependent Directors details of which are available on the website of the company:http://www.primefocus.com/investor- center#Results Reports.
27. NOMINATION AND REMUNERATION POLICY
The Company has in place a Nomination and Remuneration Policy for the Directors KeyManagerial Personnel Senior Management and other Employees pursuant to the provisions ofthe Act and Regulation 19 of the SEBI Listing Regulations.
The salient features and objectives of the Nomination and Remuneration policy which wasamended by the Board of Directors at its meeting held on February 14 2019 pursuant toSEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 areas follows:
- To formulate the criteria and terms to determine qualifications attributes andindependence of Directors;
- To identify the qualification key attributes and profile required of persons who maybe appointed in Senior Management and Key Managerial positions;
- To determine remuneration of the Directors Key Managerial Personnel and SeniorManagement employees and other employees based on the Company's size of businessfinancial position and trends and practices prevailing in similar companies in theindustry;
- To devise mechanism and carry out evaluation of the performance of Directors;
- To devise and achieve diversity on the composition of Board an essential element tosupport quality of performance;
- To retain motivate and promote talent and create a sense of participation andownership;
- To carry out such other functions as is mandated by Board of Directors and performsuch other functions as may be necessary or appropriate for performance of duties.
Further the Nomination and Remuneration policy of the Company is available on thewebsite of the Company at http://www. primefocus.com/sites/default/files/pdf/NOMINATIONAND REMUNERATION POLICY.pdf .
28. BOARD MEETINGS
During the financial year under review Six (6) Board Meetings were held the detailsof which are given in the Corporate Governance Report. The intervening gap between themeetings was within the period prescribed under the Act and Regulation 17 of SEBI ListingRegulations.
Currently the Board has Five (5) committees namely Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee Stakeholders'Relationship Committee and ESOP Compensation Committee.
During the year ended March 31 2019 a separate meeting of the Independent Directorswas held in compliance with the requirements of Schedule IV to the Act and Regulation 25(3) of the SEBI Listing Regulations.
Details of the composition of the Board and its Committees along with the Meetingsheld attendance of the Directors at such Meetings and other relevant details are providedin the Corporate Governance Report.
29. AUDIT COMMITTEE
The Audit Committee comprises of following members:
|Name of the Members ||Positions |
|Mr. Rivkaran Chadha ||Chairman |
|Mr. Kodi Raghavan Srinivasan ||Member |
|Mr. Padmanabha Gopal Aiyar ||Member |
|Mr. Amit Bapna* ||Member |
|Name of the Members ||Positions |
|Mr. Samu Devarajan ||Member |
|Mr. Anand Natarajan** ||Member |
* Mr. Amit Bapna resigned from Audit committee w.e.f. May 30 2018 and ceased to be amember of the Committee ** Mr. Anand Natarajan was appointed as a member in auditcommittee w.e.f. May 30 2018 and ceased to be a Member of Audit Committee w.e.f. December21 2018 due to his resignation.
Further details relating to the Audit Committee are provided in the CorporateGovernance Report.
30. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company Code of Conductor ethics policy. The Policy provides for adequate safeguards against victimization ofemployees who can avail the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Chairperson of the Audit Committee. The Audit Committee periodically reviewsthe functioning of this Mechanism. The policy of vigil mechanism is available on theCompany's website at http://www.primefocus. com/sites/default/files/pdf/WHISTLE BLOWERPOLICY.pdf.
The Vigil Mechanism/Whistle-blower Policy of the Company was amended by the Board atits meeting held on February 14 2019 in light of the recent amendments introducedthrough the Securities and Exchange Board of India (Prohibition of Insider Trading)(Amendment) Regulations 2018 and the Securities and Exchange Board of India (Prohibitionof Insider Trading) (Amendment) Regulations 2019. The details of the Vigil Mechanism/Whistle Blower Policy are given in the Report on Corporate Governance.
31. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to the Report as Annexure B.
In terms of Section 136 of the Act the Report and Accounts are being sent to themembers excluding the information on employees' particulars which is available forinspection by the Members at the Registered Office of the Company during the businesshours on all working days except Saturdays and national holidays upto the date of AnnualGeneral Meeting of the Company i.e September 30 2019. Any member interested in obtainingsuch particulars may write to the Company Secretary at the Registered Office of theCompany.
32. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted Corporate Social Responsibility Committee in compliancewith the provisions of Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The brief outline of the CSR Policy of the Companyalongwith the Annual Report on CSR activities is set out in Annexure C of thisreport. The policy is available on the Company's website athttp://www.primefocus.com/sites/default/files/pdf/ CORPORATE SOCIAL RESPONSIBILITYPOLICY.pdf.
33. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans given Investments made Guarantees given and Securitiesprovided during the financial year under Section 186 of the Act are stated in the Notes toAccounts which forms part of this Annual Report.
34. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/ transactions entered by the Company with the RelatedParties during the financial period were on an Arm's length basis and were in compliancewith the applicable provisions of the Act and the SEBI Listing Regulations. There were nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All Related Party Transactions were entered into only with prior approval of the AuditCommittee except transactions which qualify under Omnibus approval as permitted under thelaw. A statement of all Related Party Transactions entered is placed before the AuditCommittee and Board for its review on a quarterly basis specifying the nature value andterms and conditions of the transactions.
Transactions of the Company with any person or entity belonging to thepromoter/promoter group which hold(s) 10% or more shareholding in the company are statedin the Notes to Accounts which forms part of this Annual Report.
The policy on Related Party Transactions which was amended by the Board on February 142019 pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment)Regulations 2018 is available on the Company's website at http://www.primefocus.com/sites/default/files/pdf/RELATEDPARTY TRANSACTION POLICY.pdf. There are no transactions that are required to bereported in Form AOC-2 and as such do not form part of the Report.
35. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124 and other applicable provisions if any ofthe Companies Act 2013 and Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 the Company has transferred 9485 shares inrespect of which dividend has not been paid or claimed for seven consecutive years or moreto IEPF Authority including shares held in unclaimed suspense account on November 302017.
The members whose unclaimed shares have been transferred to IEPF may claim the sameby making application to the IEPF authority in Form No. IEPF-5 available on www.iepf.gov.infor details of unclaimed shares transferred to IEPF please refer company's websiteviz. www.primefocus.com
M/s Deloitte Haskins & Sells Chartered Accountants were appointed as StatutoryAuditors of the Company for the year 2013-14 for a period of 1 (One) year. Further at theAGM held on December 24 2014 M/s Deloitte Haskins & Sells (DHS) were appointed asStatutory Auditors of the Company to hold office from the conclusion of 17thAnnual General Meeting till the conclusion of the 22nd Annual General Meeting.According to the Section 139 of Companies Act a firm can be appointed as an auditor fornot more than two terms of five consecutive years. Accordingly the Board of Directors hasrecommended the re-appointment of DHS Chartered Accountants (Firm Registration No.117364W) as Statutory Auditors of the Company for another term of 4 (four) consecutiveyears to hold office from the conclusion of the ensuing Annual General Meeting till theconclusion of the 26th Annual General Meeting.
Deloitte Haskins & Sells have confirmed their eligibility and qualificationrequired under the Act for holding the office as Statutory Auditors of the Company.
The Auditors Report for the Financial year 2018-19 does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A ofSEBI Listing Regulations M/s. D. M. Zaveri & Co. (CP No. 4363) Practicing CompanySecretaries has been re-appointed as Secretarial Auditor to undertake Secretarial Auditof the Company for the financial year 2018-19. The report of the Secretarial Auditor inthe prescribed Form MR-3 is annexed to this report as Annexure D.
The Secretarial Auditors' Report for the Financial year 2018-19 does not contain anyqualification reservation or adverse remark except that the Company has failed to complywith Regulation 30 to be read with Schedule III Part A(a)(4)(h) w.r.t. filing of AuditedFinancial Statements of the Company for the year ended March 31 2018 within 30 minutesof the closure of the Board Meeting held on May 30 2018 to approve the Audited FinancialStatements. The Board represents that the above non-compliance was due to the technicalerror.
In accordance with the SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 08 2019the Company has obtained the Annual Secretarial Compliance Report from the SecretarialAuditor for the financial year 2018-19. The same is also submitted to the Stock Exchanges.
37. COST RECORDS
Maintenance of Cost records as prescribed under Section 148 of the Act is not requiredby the Company.
38. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE ACT
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Act.
39. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuring compliances with theprovisions of section 134(3)(c) read with section 134(5) of the Act in the preparation ofthe annual accounts for the year ended on March 31 2019 and to the best of theirknowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view
of the state of affairs of the company as at the March 31 2019 and of the loss of theCompany for that year on that date;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had laid down proper systems of internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively;
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
40. MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION
In terms of Regulation 17(8) of SEBI Listing Regulations the Company has obtainedcompliance certificate from the Managing Director and Chief Financial Officer.
Your Directors would like to express their sincere appreciation to its stakeholdersfinancial institutions bankers and business associates Government authorities customersand vendors for their co-operation and support and looks forward to their continuedsupport in future. Your Directors also place on record their deep sense of appreciationfor the committed services by the employees of the Company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
|Ramakrishnan Sankaranarayanan ||Naresh Malhotra |
|Managing Director ||Chairman & Whole-Time Director |
|DIN: 02696897 ||DIN: 00004597 |
|Date : May 30 2019 || |
|Place: Mumbai || |