Pritish Nandy Communications Ltd Directors Report.

To

The Members

Pritish Nandy Communications Limited

Your Directors present the 26th Annual Report on the business and operations of the Company together with the audited financial accounts for the financial year ended March 31,2019.

FINANCIAL HIGHLIGHTS

Total income for this year was Rs 1,568.91 lakh as compared to Rs 2,005.21 lakh for the earlier year. The Company made a profit of Rs 86.01 lakh before tax as compared to a profit of Rs 157.59 lakh before tax in the preceding year.

In Rs lakh
Particulars

Standalone

Year ended March 31,2019 Year ended March 31,2018
Income from operations 1,504.27 1,955.53
Other income 64.64 49.67
Total turnover 1,568.91 2,005.21
Total expenditure 1,482.90 1,847.61
Profit/(loss) before exceptional and extraordinary items and tax 86.01 157.59
Current tax 27.23 20.00
Profit/(loss) after current tax 58.78 137.59
Deferred tax (35.06) (72.74)
Profit/(loss) after deferred tax 93.84 210.33
Dividend (%) 0 0
Transfer to reserves 0 0
Balance in statement of profit and loss (189.17) (280.00)
Paid up capital 1,446.70 1,446.70
Earnings per share ( Rs ) 0.65 1.45
Book value per share ( Rs ) 56.67 56.04

PRESENT ECONOMIC SITUATION AND PERFORMANCE OF THE COMPANY

The increasing demand for content—both filmed entertainment and serialised digital streaming shows- added to your Companys revenues and we are optimistic of further developing our footprint in the growing content market. Your Company is strategically well positioned to address the viewing preferences of todays youth, the largest consumers of content across all different platforms. It is an audience your Company has been successfully addressing in the past as well. But a new orientation is now taking place and a shift in the market that allows for more OTT content to be shown. Your Company has demonstrated its ability to successfully relate to the content expectations of new viewers on mainstream OTT platforms that are today reaching out not just to Indian but also to global audiences.

Your Company visualizes an increasing opportunity for creating more such shows. To begin with, your Company has successfully delivered the first season of an Amazon Prime Original, Four More Shots Please which has been widely appreciated by both audiences and critics. All ten episodes of the first season of the show were dropped for binge-watching on January 25, 2019 across 200 countries and territories on the Amazon Prime Video platform. What should particularly interest our stakeholders is the fact that the show has been conceived and creatively developed in-house. Both the creator and the associate creator, who double up as the show-runners of More Shots Please, are senior in-house professionals. This is the talent hot-house that the Company set out to be 26 years ago and, today, we take pride not only in the sustainable model of business that we have created in the content business but also in the talent we have built up over the years to produce and execute our own creative projects.

The positive audience response to the show has resulted in your Company being commissioned by Amazon Prime Video to additionally and simultaneously develop the second and third seasons of Four More Shots Please. Apart from the development and writing, the principal photography for season two is also now complete and post production work has already commenced. Your Company has, as is true to your Companys reputation and work ethics, successfully worked within the budget and deadlines for season one and we intend to repeat that success in the coming two seasons.

Two more shows are being currently developed for OTT, one a fiction show like Four More Shots Please and the other, a non-fiction series in the true crime genre. Your Company has been approached by other OTT platforms as well for developing new shows, both scripted and unscripted, and work is underway for the same.

Your Company also continues to remain engaged in the development and production of filmed entertainment content. Two new feature film projects are in various stages of development. Here, too, we are looking at releasing the filmed entertainment content on OTT platforms which would entirely de-risk the projects and help us to explore the expectations of the new generation of viewers on such platforms.

Your Company has also reissued the satellite broadcasting rights of its film library to Star TV.

The film library is also being streamed on a non-exclusive basis on several OTT platforms, including Netflix, Hotstar, Jio, Sony LIV, ErosNow, MX Player and Spuul.

Moving into its 27th year of operations, yourDirectors are of the view thatyour Company is well poised to make and deliver innovative content for screening on multiple platforms in India and overseas.

DIVIDEND

To conserve cash resources your Directors do not recommend any dividend for this year.

LISTING WITH THE STOCK EXCHANGES

The equity shares of the Company continue to remain listed with the Bombay Stock Exchange Ltd (BSE) and National Stock Exchange of India Ltd (NSE). The listing fees payable to both the stock exchanges for the year 2019-2020 have been paid.

TRANSFER TO RESERVES

Your Company has not transferred any amount to the general reserve.

DEPOSIT FROM PUBLIC

The Company has not accepted any deposits within the meaning of sections 73, 74 and 76 of the Companies, Act 2013 (the Act) and the rules framed thereunder.

SUBSIDIARIES

The Company has two subsidiaries: PNC Digital Ltd and PNC Wellness Ltd. There are no associate companies within the meaning of section 2(6) of the Act. There has been no material change in the nature of the business of its subsidiaries.

Pursuant to section 129(3) of the Act, in addition to the financial statements provided under section 129 (2) of the Act, consolidated financial statements of the Company and its subsidiaries in the same form and manner as that of its own shall also be laid before the Annual General Meeting (AGM) of the Company. A statement containing salient features of the financial statements of the Companys subsidiaries inFormAOC-1 is appended as Annexure I. Pursuant to the provisions of section 136 of the Act the financial statements and consolidated financial statements of the Company along with relevant documents and separate audited accounts in respect of its subsidiaries are available on the Companys website.

PNC Digital Ltd

There has been no material change in the nature of the business of this subsidiary. Its principal business is sourcing content for digital streaming, setting up niche delivery systems for digital streaming and running the business of content aggregation as well as any other technology business using the internet as its primary delivery platform. Efforts till date have not translated into revenue generation but this subsidiary will continue its efforts. Essentially this subsidiary will function as a bridge between content producers and digital distributors. There is no revenue generated in the year 2018-19 resulting in a loss.

PNC Wellness Ltd

There has been no material change in the nature of the business of this subsidiary. It is in dialogue with other business enterprises to expand the Companys wellness business through the digital medium. This subsidiary owns several wellness brands like Moksh, Power Yoga, Passion Yoga, Cool Yoga and Couple Yoga and is exploring ways and means to commercialise these brands by introducing them into a joint venture wellness enterprise. Considering that there was no revenue generation during the year, your Company has made further provision for diminution in values of its investments by 1/5* of its book value. The holding Company is facilitating and supporting the revival of this subsidiarys business.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b. 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 of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and articles of associations of the Company, Pallab Bhattacharya, Director of the Company, retires by rotation at the ensuing AGM, and being eligible, offers himself for reappointment.

The Directors expressed their sorrow for the untimely death of Nabankur Gupta, Non-Executive Independent Director of the Company on December 7, 2018. The Directors place on record their deep appreciation for his invaluable guidance and support during his tenure as a Director. Mr Gupta was also Chairman of the Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee (CSR) and a Member of the Audit Committee of the Board of Directors of the Company.

Pursuant to Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015, on recommendation of Nomination and Remuneration Committee, the Board of Directors vide its circular resolution passed on February 28, 2019 have appointed Pradeep Guha as an additional Independent Director on the Board to comply with aforesaid regulation. Mr Guhas appointment is subject to approval by the shareholders in the ensuing AGM of the Company.

Mr Guha is currently Managing Director of 9X Media Pvt Ltd. Prior to this, he was Chief Executive Officer of Zee Entertainment Enterprises Ltd and, before that, President and Executive Director of The Times of India Group. He is also on the board of Raymond Ltd, Puravankara Ltd and Whistling Woods International Ltd.

COMPLIANCE ON CRITERIA OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent Director under section 149(7) of the Act, that he/she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year, except for the sitting fees, the independent Directors of the Company had no other pecuniary relationship or transactions with the Company.

PARTICULARS OF EMPLOYEES

This disclosure required to be furnished pursuant to section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure II.

BOARD MEETINGS HELD DURING THE YEAR

As required under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year four meetings of the Board of Directors were held and one meeting of independent directors was also held. The details of the meetings of the Board are furnished in the Corporate Governance Report.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors including independent Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by the Securities and Exchange Board of India (SEBI) and the SEBI Listing Regulations.

Further, the independent Directors, at their exclusive meeting held during the year on February14, 2019, reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the SEBI Listing Regulations.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR AND TILL THE DATE OF REPORT

There has been no material change and commitment, affecting the financial performance of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

POLICY ON DIRECTORSAPPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on Directors appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this Directors report.

AUDITORS

Statutory Auditors

BD Jokhakar and Co., Chartered Accountants (FRN 104345W) were appointed as Statutory Auditors of the Company for a period of four consecutive years at the AGM of the Members held on September 24, 2018 on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors. Pursuant to the amendments made to section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective from May 7,2018, the requirement of seeking ratification of the Members for the appointment of the Statutory Auditors has been withdrawn from the Statute. Hence the resolution seeking ratification of the Members for continuance of their appointment at the ensuing AGM is not being sought.

There is no audit qualification, reservation or adverse remark for the year under review.

AUDITORS REPORT

The Auditors Report does not contain any qualifications, reservations or adverse remarks.

In the Emphasis of Matter paragraph, the auditors have stated

"We draw attention to Note 36(a) on the standalone financial statements which relates to investment in wholly owned subsidiary "PNC Wellness Ltd.". The investment in this subsidiary stands at Rs 116.40 lakh whereas the net worth of the subsidiary is Rs 33.42 lakh as at March 31, 2019. Considering that the Company has made provision for diminution in value of investment in this subsidiary by 1/5* of its book value and considers the balance retained book value as fully realizable no further provision is made for the diminution in book value of investment which is considered as temporary.

We further draw attention to Note 36(b) on the standalone financial statements which relates to investment in subsidiary "PNC Digital Ltd.". The investment in this subsidiary stands at Rs 70.20 lakh whereas the net worth of the subsidiary is Rs 7.56 lakh as at March 31, 2019. The Company has agreed to provide its films to this Subsidiary to explore revenue opportunities on the digital platform and exploit it to its commercial advantage. In view of the fact that this subsidiary has unfettered access to the film content of the Holding Company and requires no additional substantive capital deployment to generate revenue no provision for diminution in value of investment, which is considered temporary, has been made in the accounts.

We further draw attention to Note 38(a) on the standalone financial statements which describe the facts related to the legal proceedings initiated by the Company for the recovery of an advance of Rs 150 lakh. The management considers the same as good and fully recoverable. The legal opinion obtained by the Company supports this. We have relied on the opinion and consequently the Company has not made provision of any amount there against. We further draw attention to Note 38(b) on the standalone financial statements which describes that the Company has received an award of Rs 352 lakh in its favour in the arbitration case filed against White Feather Films. The Company has also received a revised order for the amount of interest, which the Company has not found satisfactory and hence it has moved an appeal with the Bombay High Court. White Feather Films has gone in appeal against the above said award and has been directed to deposit an amount of Rs 300 lakh by the Bombay High Court. Proceedings are ongoing and in view of the same, outstanding of Rs 317.53 lakh is considered as fully recoverable.

We further draw attention to Note 39 on the standalone financial statements which describes the facts related to the arbitration proceedings initiated by the Company against Prasar Bharati on account of wrongful encashment of bank guarantee of Rs 750.50 lakh. The Company has obtained legal opinion from Justice AM Ahmadi, former Chief Justice of Supreme Court of India, which supports the Companys stand that the amount is fully recoverable and hence no provision is made there against.

Our opinion is not modified in respect of the above matters."

Your Directors confirm that the matters referred to in the segment relation to Emphasis of Matter by the independent auditors in their report have been clarified in Notes 36(a), 36(b), 38(a), 38(b) and 39 on the financial statements forming part of the balance sheet and Statement of Profit and Loss, and are self-explanatory and reproduced below

Note 36 (a)

PNC Wellness Ltd

The Company has an investment of 116.40 lakh (PY Rs 174.60 lakh) in equity shares of wholly owned subsidiary viz PNC Wellness Ltd. The net worth of this subsidiary is 33.42 lakh as on March 31, 2019. There was no revenue generation by this subsidiary during the year under review. This Subsidiary, which owns several wellness brands like Moksh and sub brands like Power Yoga, Passion Yoga, Cool Yoga, Couple Yoga, etc. is exploring avenues to commercialise its aforesaid brands. This subsidiary is inthe process of realigning its business by making efforts to commercialise and lease its various brands through collaborative arrangements with other parties. The Company is facilitating and supporting the revival of this subsidiarys business. Considering that there was no revenue generation during the year under review the management has made provision for diminution in value of investment in this subsidiary by 1/5* of its book value and considers the retained book value as fully realisable. No further provision is made for the diminution in book value of investment which is considered as temporary.

Note 36 (b)

PNC Digital Ltd

The Company has an investment of Rs 70.20 lakh (PY Rs 70.20 lakh) in equity shares of subsidiary viz PNC Digital Ltd. The net worth of this subsidiary is Rs 7.56 lakh as on March 31, 2019. The Company has agreed to provide its films to this Subsidiary to explore revenue opportunities on the digital platform and exploit it to its commercial advantage but this subsidiary was not able to generate income from its operational activities in the year gone by. This subsidiary will continue its efforts in future. In view of the fact that this subsidiary has unfettered access to the film content of the holding Company and requires no additional substantive capital deployment to generate revenue no provision for diminution in value of investment, which is considered temporary, has been made in the accounts. This Company will leverage its market standing to facilitate other smaller production houses to gain access to large digital content distributors to facilitate them getting better prices and commercial terms for their content.

Note 38 (a)

The legal proceedings initiated by the Company for the recovery of an advance of 150 lakh which was given against the Music, Asian and Indian Satellite rights of a film, where the Company has lien over the exploitation of the said rights. The management of the Company considers the same as good and fully recoverable. Legal opinion obtained by the Company supports this. Auditors have relied on the opinion and consequently no provision has been made in the accounts at this stage.

Note 38 (b)

The Company has received an award of 352 lakh in its favour in the arbitration case filed against White Feather Films. The Company has also received a revised order for the amount of interest, which the Company has not found satisfactory and hence it has moved an appeal with the Bombay High Court. White Feather Films has gone in appeal against the above said award and has been directed to deposit an amount of Rs 300 lakh by the Bombay High Court. Proceedings are ongoing and in view of the same outstanding amount of Rs 317.53 lakh is considered as fully recoverable and no provision made of any amount there against.

Note 39

Arbitration proceedings initiated by the company against Prasar Bharati on account of wrongful encashment of bank guarantee of Rs 750.50 lakh. The Company has obtained legal opinion from Justice AM Ahmadi, former Chief Justice of Supreme Court of India, which supports the Companys stand that the amount is fully recoverable and hence no provision is made there against.

SECRETARIAL AUDITORS REPORT

VN Deodhar and Company, practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the fiscal year2019, as required under section 204 of the Act, 2013 and rules thereunder.

The Secretarial Auditors Report is given as Annexure III which forms part of this report. The Secretarial Auditors report states that during the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned therein except in the following case:

Your Company has filled up the vacancy of Chief Financial Officer (CFO) by appointing Santosh Gharat, Company Secretary of our Company, a suitable candidate for the post, as the Chief Financial Officer of the Company in its meeting of the Board of Directors held on April 16,2019.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A detailed report on Management Discussion and Analysis is enclosed with this report.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Auditor submits his report to the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system of the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of the Internal Auditor, officers undertake corrective action in their respective areas and thereby strengthen control. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy, pursuant to the provisions of section 134 of the Act, which enables identification and evaluation of business risks and opportunities. This policy seeks to create transparency, minimize adverse impacts on business objectives and enhance the Companys competitive advantage. The Company has constituted a Business Process and Risk Management Committee to monitor the risks and their mitigating actions continuously.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

TRANSACTIONS WITH RELATED PARTIES

All Related Party Transactions entered into during the financial year were on an arms length basis and in the ordinary course of business. Details of Related Party Transactions are disclosed in Note 34 of the Audited Financial Statements of the Company.

EXTRACT OF ANNUAL RETURN

Under section 92(3) of the Act, the extract of annual return is given in Annexure IV in the prescribed form MGT-9, which forms part of the report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH Act) and Rules made thereunder, your Company has constituted an Internal Complaints Committees (ICC). While maintaining the highest governance norms, the Company has, within the ICC, appointed an external independent person who has worked in this area and has the requisite experience in handling such matters.

During the year, no complaint of sexual harassment was received by the Company. To build awareness in this area, the Company has been conducting induction and refresher programmes in the organisation on a continuous basis.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/ or Board under section 143(12) of Act and Rules framed thereunder.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Companys CSR policy is aimed at demonstrating care for the community through its focus on education, skill development, health, wellness and research on content.

Further, in accordance with the provisions of section 135 of the Act and rules framed thereunder, the Company has adopted and constituted a CSR Committee of Directors comprising of the following:

1. Udayan Bose(Chairman)

2. Pallab Bhattacharya

3. Hema Malini

The detailed policy and constitution of the committee is available on the Companys website.

No CSR provision is applicable for the financial year ended March 31,2019as the average net profit of the Company for the last three financial years is a loss and inadequate profit.

However, the Company has put in place a policy that ensures all excess and unconsumed food for unit people, including cast and crew, during production shoots are immediately given away to the NGO Feeding India for urgent distribution to the needy and hungry.

DISCLOSURE REQUIREMENT

As per SEBI Listing Regulations, Corporate Governance Report with auditors certificate thereon and Management Discussion and Analysis are attached, which form part of this report.

Details of the familiarization programme of the independent Directors are available on the website of the Company.

Policy for determining material subsidiaries of the Company is available on the website of the Company.

Policy on dealing with related party transactions is available on the website of the Company.

The website of the Company is www.pritishnandycom.com.

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 section 177(9) of the Act and the SEBI Listing Regulations with stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As per section 134(3) (m) of the Act, the particulars of Energy Conservation, Research and Development and Technology Absorption are not applicable to your Company.

Foreign Exchange Earnings and Outgo during the year are given in Annexure V which forms part of the report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts which remained unclaimed, and unpaid, for a period of 7 years from the date of declaration of dividend.

ACKNOWLEDGMENT

The Board thanks all stakeholders in the Company, clients, bankers and financial institutions for their continued support during the year. It also wishes to record its appreciation of the efforts put in by all staff and associates of the Company.

For and on behalf of the Board of Directors

Pallab Bhattacharya Udayan Bose
Wholetime Director and CEO Director
Mumbai, May 28,2019 DIN:00008277 DIN:00004533