Sowbhagya Media Ltd Directors Report

To, The Members of Sowbhagya Media Limited

Your Directors have pleasure in presenting the 24^{t h} Annual Report of the Company together with the Audited Accounts for the year (FY 2018-19) ended 31^st March, 2019.

FINANCIALHIGHLIGHTS:

		(Amount in Rs.)
Particulars	As on 31/03/2019	As on 31/03/2018
Revenue from operations	555000	307,97,500
Total Expenditure	(10,157,059)	(42,284,725)
Profit/Loss from operations before other income, interest and exceptional items	(9602059)	(88,48,660)
Other income	-	26,38,565
Extraordinary Items	-	-
Profit (+)/Loss (-) from extraordinary activities before tax	(9602059)	(88,48,660)
Tax Expense	34,79,286	6,88,025
Net Profit (+)/Loss (-) from extraordinary activities after tax	(61,22,773)	(81,60,635)
Paid-up equity share capital	10,93,00,000	10,93,00,000
Face value of each share	Rs. 10/-	Rs. 10/-
Earnings Per Share (EPS)	(0.56)	(0.75)

COMPANYS PERFORMANCE:

During the year, the Company achieved the revenue from operations of Rs. 555,000/- as against the previous year income from operations of Rs. 307,97,500/-. Loss for the year was Rs.9602059/- over the PAT of Rs. (6122773)/- in FY 2018-19. The directors of your company are continuously putting their efforts to achieve the turnover as well as profits.

DIVIDEND:

The directors of the Company has not declared and not recommended any dividend during the year under review.

FINANCE:

During the year under review, your Company did not raise any capital from the capital markets either by way of issue of equity shares /ADR/GDR / or any debt by way of debentures. The Company continued to get financial assistance from its lenders within the overall facilities to meet the working capital requirements.

DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT:

The Company did not invite or accept deposits from public during the year under review.

DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE CHAPTER V OF THE COMPANIES ACT:

Not applicable as the company did not invite or accept deposits from public

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year2018-2019 to BSE where the Companys Shares are listed and not paid for 2019-20.

DEMATERIALISATION OF SHARES:

94.89%of the companys paid up Equity Share Capital is in dematerialized form as on 31^st March, 2019 and balance 5.11% is in physical form. The Companys Registrars and Share Transfer Agents are M/s.XL Softech Systems Limited having its registered office at 3, Sagar Society, Road No.2, Banjara Hills, Hyderabad 500 034.

DIRECTORS:

As on the date of this report, Companys Board comprises of 6(six) Directors, out of which 5 are Non-Executive directors including 1 Woman Director.

A. BACKGROUND OF DIRECTORS:

1. Madhusudan Rao Madikonda - Director

Sri M.Madhusudana Rao, Whole Time Director, is a Honours Graduate in Commerce ,Masters Degree Holder in Business Administration and has a Legal Degree, with more than 12 Years of Experience in Finance. He is a market leader within this sector and has handled the larger division of our organization with his extensive exposure. He would ensure the organization has continued growth and expansion in this challenging and rewarding environment with his knowledge. He works effectively to manage the day today running of Finance Function and has credible track record in Media &Entertainment Industry.

2. SeethaBalu- Woman Director

Smt. SeethaBal , an Women Director and Non-Executive Director is a Graduate and has vast experience in writing novels and books that brings rich and varied experience to the Company, she would ensure the organization has continued growth and expansion in this challenging and rewarding environment with her knowledge.

B. CHANGES IN DIRECTORS AND KMP:

There are new appointments in the members of directors during the financial year.

C. RETIREMENT BY ROTATION:

Mr. Madhusudan Rao Madikonda, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Board recommends his re-appointment.

D. EVALUATION OF PERFORMANCE OF THE BOARD OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board has carried out the evaluation of its own performance and Committees of the Board, the performance of directors individually after taking various parameters which include integrity, credibility, expertise and trustworthiness of Directors,

Boards monitoring of various compliances, laying down and effective implementation of various policies, level of engagement and contribution of the Directors, safeguarding the interests of the stakeholders etc.

The performance evaluation of the board as a whole was carried out by the Independent Directors. The performance evaluation of each independent director was carried out by the board. The directors expressed their satisfaction with the evaluation process.

Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:

Your Company has laid down well-defined criteria for the selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel.

CHIEF FINANCIAL OFFICER (CFO):

Mr. Pakeeraiah Pasupuleti is the Chief Financial Officer of the Company

BOARD & COMMITTEE MEETINGS:

During the year under review, the following Board/Committee Meetings were convened and held:

(a) Seven (9) Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

(b) Four (4) Audit Committee Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

(c) Four (4) Nomination & Remuneration Committee Meeting was held, details of which are given in the Corporate Governance Report.

INDEPENDENT DIRECTORS AND THEIR MEETING:

None of the Independent Directors on the Board serve as an Independent Director in more than seven listed companies. The Whole time Directors does not serve as an Independent Director in more than three listed companies. The details on the separate meeting of the Independent Directors are given in the Corporate Governance report.

VIGIL MECHANISM:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.

RISK MANAGEMENT POLICY:

Company is in the process of adopting a Business risk evaluation and management policy. However, Business risk evaluation and management is an ongoing process within the organization. The Board of Directors reviews the reports of compliance to all applicable laws and regulations periodically. Any non-compliance is seriously taken up by the Board and the action taken for rectification of non-compliance is reported to the Board.

CORPORATE SOCIAL RESPONSIBILTY POLICY:

Pursuant to Section-135 and Schedule VII of the Companies Act, 2013, read with Companies (Corporate Social Responsibility) Rules, 2014, during the year under review the company does not fall under the criteria of implementing CSR and hence CSR is not applicable.

PARTICULARS OF EMPLOYEES/MD/CFO:

There are no employees employed throughout the financial year and in receipt of remuneration of Rs. 1,02,00,000 (Rupees One Crore Two Lakhs) or more, or employed for part of the year and in receipt of Rs. 8,50,000/- (Rupees Eight Lakhs Fifty Thousand) or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, whose particulars are required to be furnished.

REMUNERATION RATIO OF THE DIRECTORS/KMP/EMPLOYEES:

Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: Information as per Rule 5(1) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2018-19: Nil

ii) ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2018-19 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

S. No	Name of Director/ KMP and Designation	The ratio of the remuneration of each Director to the median remuneration of the employees for the financial year	The Percentage increase in remuneration of each Director, CFO, CEO & CS in the financial year.	The percentage increase in the median remuneration of employees in the financial year	Comparison of the Remuneration of the KMP against theperformance of the Company
1.	Ramakrishna Prasad Kondapalli	No Change	0	0	Remuneration = 15 lakhs per annum Net Profit of the Company= Nil (FY 2018- 19)
2.	PakeeraiahPasupu leti	No Change	0	0	Remuneration = 4.80 lakhs per annum Net Profit of the Company= Nil (FY 2018- 19)

iii) The median remuneration of employees of the Company during the financial year : NA;

iv) In the financial year, increase in the median remuneration of employees-NA;

v) There are no other employees in the company for the Financial year ended 31^st March 2019 and the Company is Availing the services on consultancy basis.

vi) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2018-19 is not Applicable whereas the increase in the managerial remuneration for the same financial year is Nil.

vii) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

CONSTITUTION OF INTERNAL COMPLIANTS COMMITTEE:

The Company has adopted a policy on prevention and redressal of sexual harassment of women at work place as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy aims to provide protection to employees at the work place, and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, and framed with the objective of providing a safe working environment, where employees feel secure. There were no cases reported during the financial year 2018-19 under the said policy.

SECRETARIAL STANDARDS:

As Secretarial Standards approved by the Central Government, have been issued by the Institute of Company Secretaries of India (ICSI), under the provisions of Section 118(10) of the Companies Act, 2013 (the Act), vide ICSI Notification No. 1 (SS) of 2015 dated April 23rd, 2015 and these standards are ^applicable to all the companies. ICSI has notified two Secretarial Standards i.e. SS-1 and SS-2 for Board and General Meetings respectively with effect from 1^st July 2015. The Institute of ^Company Secretaries of India has revised the two secretarial standards viz. SS-1 and SS-2 with effect from 01^st October, 2017 mentioning the ^approval from Ministry of Corporate Affairs Letter No. 1/3/2014-CL.I Dated 14^th June, 2017 and by the institute by way of notification no. F. No. ICSI/6/2017 in the official gazette has withdrawn the old secretarial standards with effect from 30/09/2017. The company has implemented the applicable secretarial standards as applicable during the respective parts of the financial year.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under S e c t i o n - 134(5) of the companies act, 2013 Directors of your Company here by state and confirm that: 1. The applicable Accounting Standards have been followed in preparation of annual accounts; 2.The accounting policies selected were applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at 31st March,2019 and of the loss for the year ended on that date; 3. Proper and sufficient care has been taken for 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; 4.The Annual Accounts for the year ended 31^st March,2019 have been prepare^d on a going concern basis;

DETAILS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

Company does not have any subsidiary, associates and joint venture Companies.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES DURING THE YEAR:

Not Applicable

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Related party transactions that were entered during the financial year were on an arms length basis and were in the ordinary course of business. There are transactions with related parties referred to in Section 188(1) in the company during the financial year and the complete details incorporated in the notes to accounts and the particulars of contracts entered during the year as per

Form AOC-2 is enclosed as Annexure-A.

REPORT ON MANAGEMENT DISCUSSION AND ALANYSIS REPORT:

As required by ‘ SEBI (LODR) Regulations, 2015, the Management discussion and Analysis Report is enclosed as a part of this Annual report -

Annexure-B. REPORT ON CORPORTE GOVERNNCE:

As required by ‘SEBI (LODR) Regulations, 2015, the Corporate Governance Report is enclosed as Annexure-C

Certificate from the Statutory Auditors of the company M/s.KVSRY & Associates.,Chartered Accountants confirming the compliance with the conditions of Corporate Governance as specified in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report.

Directors explanation on the comments of the Secretarial Auditor for the yearended 31st March, 2019 as set out in his ^Secretarial Audit Report dated 28^thMay, 2019 is as follows:

(i) Wit^h reference to sub-clause (a) of clause (vi) of the said report wherein the Secretarial Auditor has mentioned that the company has not registered under Shops & Establishments Act, the board would like to inform that, the company is in the process of document preparation for getting registered and to comply the applicable provisions under the said Act.

(ii) With reference to sub-clause (b) and (c) of clause (vi) of the said report wherein the Secretarial Auditor has mentioned that the company secretary of the company has resigned and no qualified company secretary is appointed as a compliance officer during the reporting period, the board would like to inform that, the company has released number of advertisements, and did not get the qualified company secretary. The company will appoint a qualified company secretary as a compliance officer at the earliest.

(iii) With reference to sub-clause (d) of the clause (vi) of the said report , the company would like to affirm the said statement as its a fact on record.

(iv) With reference to sub-clause (e) of the clause (vi) of the said report , the company would like to affirm the said statement as its a fact on record.

(v) With reference to sub-clause (f) of the clause (vi) of the said report, the company states that the office was relocated, hence the documents with respect to notice copies sent to the Board of Directors of the company for their meetings held during the Financial Year (18-19) could not be located immediately at the time of the Secretarial Audit.

(vi) With reference to sub-clause (g) of the clause (vi) of the said report, the company states to comply with the provisions of the Companies Act, 2013 at the earliest.

(vii) With reference to sub-clause ( h) Vadde Kishore (director) did not comply with the provisions of Section 167(1)(b) hence the office of director is vacated.

(viii)With reference to sub-clause (i) of clause (vi) of the said report wherein the Secretarial Auditor has mentioned in his note that, There are existing cases filed against the company and its Ex-Managing Director by Central Bureau of Investigation (CBI) and Directorate of enforcement under the prevention of money laundering Act, 2002 and few properties of the company under final attachment with Enforcement Directorate. The Board would like to inform you that, the Directorate of Enforcement has given final attachment order vide F.No.ECIR/12/DLZO/2014/pt-1/AD (AK)/SDS/1256, 1258, 1260 Dated 04.07.2016 Dt. 04.07.2016 in respect of Fixed Deposit of Rs. 50 lakhs and Two Vehicles (Vide Vehicle Reg.No. AP09 BP 1111 and AP 09 BR 1111) of the company. The Case Details are as follows:

S.No	Case Number	Stage of the Case	Particulars of the properties attached	Letter Reference
	DIRECTORATE OF ENFORCEMENT
1.			Fixed deposit of Rs. 50.00 lakhs	F.No.ECIR/12/DLZO/2014/pt- 1/AD(AK)/SDS/1260 dated 04.07.2016
2.	487/2015	The company is in the process of filling further appeals	Vehicle Registration No. AP09 BP 1111	F.No.ECIR/12/DLZO/2014/pt- 1/AD(AK)/SDS/1256 dated 04.07.2016
3.			Vehicle Registration No. AP09 BR 1111	F.No.ECIR/12/DLZO/2014/pt- 1/AD(AK)/SDS/1258 dated 04.07.2016
	CENTRAL BUREAU OF INVESTIGATION (CBI)
1.	RC NO. 219 2013 E 0006	There was hearing on 25.05.2017	and no.of hearing subsequently

The company is of the opinion that it has complied the applicable laws and confident that, there are no violations and it would be able to give replies to the allegations to the satisfaction of the government agencies involved. These cases will have no impact on the financial statements of the company.

MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:

The Company has in place adequate internal financial controls commensurate with the size and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

AUDIT OBSERVATIONS:

Auditors observations are suitably explained in no test to the Accounts and are self-explanatory except the following:

In point vii(b) of Annexure B of Auditors Report, Auditors made an observation of service tax due to the department for the FY 2010-11 and 2011-12, and the board is informing that the dispute is pending and the company is in the process of making good for the dues and the details of which are as follows:

Nature of Statute	Nature of dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending
Finance Act, 1994	Service Tax	1,52,92,553	Financial year 2010-11 and 2011-12	Appellate Tribunal, Service Tax, Hyderabad

AUDITORS:

a) Statutory Auditors:

Pursuant to Section 139, 142 and other applicable provisions of the Companies Act, 2013, the Company has appointed M/s. KVSRY & Associates, Chartered Accountants, Firm Registration No. 08169S, are the Statutory Auditors of the company for the Financial Year 2018-19, who were appointed for a period of 5 (Five) years at 23rd Annual General Meeting.

c) Secretarial Auditors and Secretarial Auditors Report:

Pursuant to the provisions of Section-204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed GSLN GUPTA, Practicing Company Secretary to carry out the Secretarial Audit in terms of the Companies Act, 2013 for the financial year 2018-19. The Secretarial Audit Report issued by GSLN GUPTA, proprietor, CP11271, Practicing Company Secretary in form MR-3 is enclosed to this report as Annexure-D.

EXTRACT OF ANNUAL RETURN:

As required under Section-92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT- 9 as a part of this Annual Report- Annexure ‘E.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

Information required under Section-134ofthe Companies Act,2013 read with Companies (Disclosure of particulars in Directors ‘Report)Rules,1988 is given below:

A) Conservation of energy:

The Company has been continuously making efforts to reduce energy consumption. The management is striving to achieve cost reduction by economical usage of energy and to bring a general awareness about energy conservation among employees.

(B) Technology absorption:

No new Technology has been utilized for the services rendered and the company has not imported any technology.

(C) Foreign exchange earnings and Outgo:

Earnings in Foreign Exchange	: Rs. Nil
Spending in Foreign Exchange	: Rs. Nil

HUMAN RESOURCES:

There are no employees as on date on the rolls of the Company who are in receipt of Remuneration which requires disclosures under Section134ofthe Companies Act, 2013 and Companies (Particulars of Employees) Rules,1975. During the year under review, relationship with the employees is cordial.

VIGIL MECHANISM:

In pursuant to the provisions of section177(9)& (10)of the Companies Act,2013,a vigil mechanism for directors and employees to report genuine concerns has been established.

RESERVES:

The amount of net profits/Losses during the year, transferred to the reserves.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

4. No frauds were reported by the auditors during the year under review

APPRECIATION:

The Directors wish to place on record their appreciation to employees at all levels for their co-operation. Your directors would also acknowledge the continued support of the Companys Shareholders, Bankers, Exhibitors, Distributors, and all others that contributed to the success of the company.

By Order of the Board of Directors
For M/s.SOWBHAGYA MEDIA LIMITED
Sd/-	Sd/-
M.MADHUSUDANARAO	TIRUMALA RAO KUNDERU
Director	Director
DIN- 01638593	DIN- 06459338
Hyderabad, 16TH November 2019.