Auditor Report of Picturehouse Media Ltd.

Mar 31, 2024

We have audited the Standalone Ind AS financial statements of Picturehouse Media Limited, Chennai
("the Company"), which comprise the standalone balance sheet as at March 31, 2024, and the
standalone statement of profit and loss (including other comprehensive income), standalone
statement of changes in equity and standalone statement of cash flows for the year then ended, and
notes to the Standalone Ind AS financial statements, including a summary of significant accounting
policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS financial
statements").

In our opinion and to the best of our information and according to the explanations given to us, except
for the possible effects of the matter described in the Basis for Qualified Opinion paragraph below
including the disclosure of "Material Uncertainty Related to Going Concern", the aforesaid
Standalone Ind AS financial statements give the information required by the Companies Act, 2013
("Act") in the manner so required and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally
accepted in India, of the state of affairs of the Company, as at March 31, 2024, its Loss and other
comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(i) Attention is invited to note no. 43 to the Statement, in relation to inventory i.e., films
production expenses amounting to Rs. 2,956.52 Lakhs, consists of advances granted to artists
and co-producers. As represented by the Management the film production is under progress
with respect to production of 2 movies costing Rs 76.69 lakhs. In respect of the balance
inventory of Rs 2,879.83 lakhs the Board is confident of recovering the amount from the
production houses. In the absence of documentary evidence as well as the confirmation of
balance from the parties relating to the status of the inventory amounting to Rs 2,879.83
lakhs, we are unable to agree with the views of the Board. We are of the opinion that
realization of inventories is doubtful but we are also unable to decide the quantum of loss that
may arise on account of write down of inventory.

(ii) Attention is invited to note no.44 to the Standalone Financial Statements, Investment in
wholly owned subsidiary viz. PVP Capital Limited, Chennai (PVPCL)

The subsidiary''s net worth stands at Rs. 581.84 lakhs (negative) as at 31.03.2024. The
possibility of liberal cash flow is dim. The company has also defaulted in statutory dues are not
remitted into the Government. PVPCL has not maintained minimum net owned funds as per
RBI Regulations. Under these circumstances, regulatory authorities may cancel its registration
as non-banking finance company. However, the Board of the Picturehouse Media Limited
considers there is no need to provide for impairment in investment made. We do not agree
with that view. But it is difficult to assess correctly the extent of erosion and the loss arising
therefrom.

Material Uncertainty relating to Going Concern

We draw attention to the following matters in the Notes to the financial statements

Note No.46 in the financial statements which indicates that the company is advancing for
production of movies, it is still incurring losses from operations (negative net worth Rs.
4,155.62 lakhs). Adverse key financial ratios, non-payment of statutory dues, impact of our
observations made in preceding paragraphs, and other related factors indicate that there is
an existence of material uncertainty that will cast significant doubt on the company''s ability
to continue as a going concern. Our opinion is not modified in respect of this matter.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s
Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We
are independent of the Company in accordance with the Code of Ethics issued by the Institute of
Chartered Accountants of India together with the ethical requirements that are relevant to our audit of
the Standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion.

Emphasis of Matters

1. Attention is invited to note no. 45 of the Standalone Financial Statements - During the
Financial year, PHML acquired 81% stake in New Cyberabad City Projects Private Limited
(NCCPPL) for Rs 3,256.44 lakhs from PVP Ventures Limited. Accordingly, NCCPPL has become

a subsidiary of the Company with effect from 1 October 2023, However, it is noted that as of
the date of these financial statements, the consideration for this acquisition has not been
fully settled, with an outstanding balance of Rs 2,880 lakhs still due to PVP Ventures Limited.
Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the Standalone Ind AS financial statements of the current year. These matters were
addressed in the context of our audit of the Standalone Ind AS financial statements, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the
matter described in the Basis for Qualified Opinion section, we have determined the matters described
below to be the key audit matters to be communicated in our Report.

Contingent Liabilities in relation to Service Tax Litigations

Key audit matter

How the matter was addressed in our audit

The Company has received certain demand orders and notices relating to service tax matters. The company is contesting these demands (refer note no. 49 to the standalone financial statements). There is high level of judgment required in estimating the level of provisioning. The management''s assessment is supported by the facts of matter, their own judgment and advices from legal and independent service tax consultants where ever considered necessary. Accordingly, unexpected adverse outcomes may significantly impact the management''s reported loss and the Balance Sheet. We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of these matters which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analyzing the facts of subject matter under consideration and judgements/interpretation of law involved.

Our audit procedures included the following: (i) Understanding the current status of the service tax litigations. (ii) Examining recent orders and/or communication received from various service tax authorities and follow up action thereon. (iii) Evaluating the merit of the subject matter under consideration with reference to the grounds presented therein and available independent legal advice; and (iv) Review and analysis of evaluation of the contentions of the management through discussions, collection of details of the subject matter under consideration, the likely outcome and consequent potential outflows on service tax issues.

As a result of the above audit procedures no material differences were noted. We confirm the
adequacy of disclosures made in the Standalone Ind AS Financial Statements.

Information Other than the Standalone Ind AS financial statements and Auditor''s Report
Thereon

The Company''s Board of Directors is responsible for the other information. The other information
comprises the information included in the management discussion and analysis, Board''s Report
including annexures to Board''s Report and Report on Corporate Governance but does not include the
standalone financial statements and our auditor''s report thereon. The above reports are expected to
be made available to us after the date of the auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will
not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated.

When we read the above reports, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance

If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of the Management and Those Charged with Governance for the Standalone
Ind AS financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these Standalone Ind AS financial statements that give a true and
fair view of the financial position, financial performance, changes in equity and cash flows of the
Company in accordance with the accounting principles generally accepted in India, including the Ind
AS specified under Section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and prudent;
and design, implementation and maintenance of adequate internal financial controls that were

operating effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Standalone Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Ind AS financial statements, the Board of Directors is responsible for
assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Ind AS financial statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor''s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these
Standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

(i) Identify and assess the risks of material misstatement of the standalone Ind AS financial
statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.

(ii) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we
are also responsible for expressing our opinion on whether the company has adequate internal
financial controls with reference to financial statements in place and the operating
effectiveness of such controls.

(iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

(iv) Conclude on the appropriateness of management''s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company''s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor''s report to the related disclosures in the Standalone Ind AS
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor''s report.
However, future events or conditions may cause the Company to cease to continue as a going
concern.

(v) Evaluate the overall presentation, structure and content of the Standalone Ind AS financial
statements, including the disclosures, and whether the Standalone Ind AS financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the Standalone Ind AS financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor''s
report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central
Government of India in terms of Section 143(11) of the Act, we give in "Annexure 1" a statement on
the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit.

(b) Except for the effects of the matter described in the Basis for Qualified Opinion Paragraph
above, in our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.

(c) The standalone Balance Sheet, the standalone Statement of Profit and Loss (including other
comprehensive income), the standalone Statement of Changes in Equity and the standalone
Cash Flows statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion Paragraph
above, in our opinion, the aforesaid Standalone Ind AS financial statements comply with the
Ind AS specified under section 133 of the Act read with Rule 7 of the Companies (Accounts)
Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion Paragraph above, in our opinion, may
have an adverse effect on the functioning of the company

(f) On the basis of the written representations received from the directors as on March 31, 2024
taken on record by the Board of Directors, none of the directors is disqualified as on March 31,
2024 from being appointed as a director in terms of Section 164(2) of the Act.

(g) The qualification relating to the maintenance of accounts and other matters connected
therewith are as stated in the Basis for Qualified Opinion Paragraph above

(h) With respect to the adequacy of the internal financial controls with reference to financial
statements of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure 2".

(i) With respect to the other matters to be included in the Auditor''s Report in accordance with the
requirements of section 197(16) of the Act, during the year, the company has not paid
remuneration to director(s). Therefore, the question of remuneration paid to the directors
over and above the limits laid down under this section doesn''t arise.

With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of
the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2024 on
its financial position in its Standalone Ind AS financial statements - refer note 49 to
the Standalone Ind AS financial statements;

ii. the Company did not have any long-term contract including derivative contracts for
which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred, to the Investor
Education and Protection Fund by the Company;

iv. a) The Board has represented that, to the best of its knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other
person or entity, including foreign entity ("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall, whether,
directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The Board has represented, that, to the best of its knowledge and belief, other than
as disclosed in the note no15 to financial statements, no funds have been received by
the Company from any person or entity, including foreign entity ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

c) Based on the audit procedures that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us
to believe that the representations provided under sub-clause (a) and (b) above,
contain any material misstatement.

v. The company has not declared any dividend during the year. Hence, reporting with
respect to compliance with the provisions of section 123 of the Act does not arise.

Audit Trail

Based on our examination which included test checks, the company has used an accounting software
for maintaining its books of account which has a feature of recording audit trail (Tally edit log) facility
throughout the year, except for the fact that the company has not enabled the audit trail feature in
Tally edit log.

For R P S V & Co.,
Chartered Accountants
Firm''s Registration Number: 0013151S

D Purandhar
Partner

Membership no.: 221759
ICAI UDIN: 24221759BKAMZB4492

Place: Chennai
Dated: 28 May 2024

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Mar 31, 2016

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Picture house Media Limited (herein after referred to "the Company") which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Financial Statements).

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended. This responsibility also includes 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 frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosure in the financial statements. These procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and their Loss, and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

Attention is drawn to the notes to the financial statements with regard to the loans and advance for film finance and Film under-production expenses (WIP). The management is of the view that these items are considered good and realizable in the ordinary course of business. However were unable to determine whether any adjustments to these carrying amounts are necessary and provision for diminution, if any, to be made depends on the future events. Our opinion in respect of these matters is not modified.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2016 ( the Order), issued by the Central Government of India, in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure-A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. AS REQUIRED BY SECTION 143(3) OF THE ACT, WE REPORT THAT:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended.

e. on the basis of written representation received from the Directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors of the Company is disqualified as on 31st March, 2016, from being appointed as a director in terms of section 164(2) of the Act;

f. with respect to the adequacy of the internal financial controls over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure-B; and

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company does not have pending litigations which have impact on its financial statements.

ii) The Company did not have long term contracts including derivative contracts for which there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE-A TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

In terms of the information and explanations sought by us and given by the Company and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

1. a. The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The company has physically verified the fixed assets at reasonable intervals and there are no discrepancies noticed on such verification.

c. The company''s fixed assets do not have any immovable properties.

2. The company holds inventory film production in progress - WIP. The physical verification of inventory was conducted at reasonable intervals by the management and there is no material discrepancies noticed on such verification.

3. During the year the company has granted unsecured loans to the subsidiary company, a party covered in the register maintained under section 189 of the Act. The outstanding due as on the balance sheet date is Rs.4,98,56,349/- and the entire amount was provided for.

4. The company has complied with the provisions of section 185 and 186 of the Companies Act in respect of securities and guarantees given.

5. The Company has not accepted deposits from public during this year. Therefore the provision of clause 3 (v) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

6. The Company has made and maintained the cost records prescribed by the Central Government under sub-section (1) of Section 148 of the Act.

7. a. The Company is depositing, with delays, undisputed statutory dues with appropriate authorities, like Provident Fund, Employee''s State insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Value Added Tax, Cess, wherever applicable. There are no undisputed statutory dues outstanding as at 31st March, 2016 for a period of more than six months from the date they become payable.

b. There are no dues of income tax, sales tax, service tax, customs duty, excise duty, value added tax have not been deposited on account of any dispute.

8. The company has not defaulted in repayment of loans or borrowings from financial institutions, bank, government or dues to debenture holders.

9. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). The term loans obtained were applied for the purpose for which those were raised.

10. There are no fraud by the company or any fraud on the company by its officers or employees and hence the provision of clause 3 (x) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

11. The company has not paid any managerial remuneration and hence the provision of clause 3 (xi) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

12. The company is not a Nidhi company and hence the provision of clause 3 (xii) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

13. The transactions with the related parties are in compliance with section 177 and 188 of the Act wherever applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

14. The company has not made any preferential allotment of shares or private placement of shares or convertible debentures during the year and hence the provision of clause 3

(xiv) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

15. The company is not entered into any non-cash transactions with directors or persons connected with them and hence the provision of clause 3 (xv) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

16. The company is not required to be registered under section 45-IA of Reserve Bank of India Act, 1934 and hence the provision of clause 3 (xvi) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company for the year under audit.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") (Referred to in paragraph 2(f) of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

We have audited the internal financial controls over financial reporting of Picturehouse Media Limited ("the Company") as on 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

QUALIFIED OPINION

According to the information and explanations given to us and based on our audit, the following weakness has been identified as at 31st March, 2016. "The Companies internal control system for advance given to film finance, production work-in-progress which could potentially result in existence of uncertainty that may cast doubt about the recoverability or otherwise on some of the items and thereby non provision for the shortfall, if any, as at the balance sheet date could not have been established"

A material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company, and the material weaknesses does not affect our opinion on the standalone financial statements of the Company.

By order of the Board of Directors

for PICTUREHOUSE MEDIA LIMITED

Sd/-

Date: August 17, 2016

Place: Chennai Company Secretary

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Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Picturehouse Media Limited [the Company] which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. [the Financial Statements]

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes 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 frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosure in the financial statements. These procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its Loss, and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order, 2015 ( the Order), issued by the Central Government of India, in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 As required by section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014

e. on the basis of written representation received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors of the Company is disqualified as on 31st March, 2015, from being appointed as a director in terms of section 164(2) of the Act;

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

1. The Company does not have any pending litigations which would impact its financial position.

2. The Company did not have any long term contracts including derivative contracts for which there were any material forseeable losses.

3. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors' Report of even date)

1 a. In our opinion and according to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As per the information and explanations provided to us, the Company has physically verified the fixed assets during this year and there is no material discrepancies noticed on such verification.

2 a. According to the information and explanations given to us, the management has conducted physical verification of inventory (Film Production in Progress – WIP) at reasonable intervals.

b. According to the information and explanations given to us the procedures of physical verification of inventory (Film Production in Progress – WIP) followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

c. According to the information and explanation given to us the Company is maintaining proper records of inventory (Film Production in Progress-WIP) and there are no material discrepancies noticed on physical verification.

3 According to the information and explanations given to us, the Company has granted, unsecured loans to subsidiary Company – PVP Cinemas Pvt Ltd during earlier years, the party covered in the register maintained under section 189 of the Act. It is informed that these advances are recoverable on demand, however the entire amount of Rs.4,97,92,099/- has been provided for. The overdue amount, receipt of principal amount and the interest are not applicable.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5 In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from public during this year. Therefore the provisions of section 73 to 76 and relevant rules framed thereunder and any contravention of these provisions for the year under audit are not applicable.

6 As per the information and explanations given to us, we are of the opinion that the Company has made and maintained the cost records pursuant to the Rules made by the Central Government under sub-section (1) of Section 148 of the Act.

7 a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues with appropriate authorities, like Provident Fund, Employee's State insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Value Added Tax, Cess, wherever applicable, except few delays in depositing Income Tax TDS. There are no undisputed Statutory outstanding dues as at 31st March, 2015 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess which have not been deposited on account of any dispute.

c. According to the information and explanation given to us, there are no amount required to the transferred to investor education and protection fund in accordance with the provisions of the Act.

8 In our opinion and according to the information and explanation given to us there are no accumulated losses as at the end of the financial. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

9 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institutions or banks or debenture holders.

10 In our opinion and according to the information and explanation given to us, the Company has given corporate guarantee for loans taken by its subsidiary from the Banks and the terms and conditions whereof are not prejudicial to the interest of the Company.

11 In our opinion and according to the information and explanation given to us, the term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

12 According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Date May 29, 2015 For M/S CNGSN & Associates LLP

Camp Hyderabad Chartered Accountants

Firm Registration No: 004915S

Sd/-

R. Thirumalmarugan

Partner

Membership No: 200102

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Mar 31, 2014

We have audited the accompanying financial statements of Picturehouse Media Limited (the Company), which comprises the Balance Sheet as at March, 31 2014 and the Statement of Profit and Loss and Cash flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. we conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. These procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the efectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

we believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Afairs of the Company as at March, 31, 2014;

b) In the case of Statement of Profit and Loss, of the PROfIT for the year ended on that date; and

c) In the case of Cash flow Statement, of the Cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ( the Order), as amended, issued by the Central Government of India, in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and the Cash flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash flow statement comply with the accounting standards referred to sub-section (3C) of Section 211 of the Act;

e. on the basis of written representation received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director, in terms of clause (g) of sub-section (1) of section 274 of the Act;

f. since the Central Government has not issued any notifcation as to the rate at which the cess is to be paid under section 441A of the Act, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

1. a. In our opinion and according to the information and explanations given to us, the company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As per the information and explanations provided to us, the company has physically verifed the fixed assets during this year and there is no material discrepancies noticed on such verifcation.

c. As per the information and explanation provided to us, substantial part of fixed assets have not been disposed of during the year, which afects the going concern.

2. a. According to the information and explanations given to us, the management has conducted physical verifcation of inventory (film Production in Progress - wIP) at reasonable intervals.

b. According to the information and explanations given to us the procedures of physical verifcation of inventory (film Production in Progress - wIP) followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c. According to the information and explanation given to us the company is maintaining proper records of inventory (film Production in Progress - wIP) and there are no material discrepancies were noticed on physical verifcation.

3. a. According to the information and explanations given to us, the Company has granted, unsecured loans to subsidiary company- PVP Cinema Pvt Ltd a during earlier years, a party covered in the register maintained under section 301 of the Companies Act, 1956. It is informed that these advances are recoverable on demand however the entire amount of Rs.4,76,07,548/-has been provided for. During the year the company has advanced a sum of Rs.42,17,762/- to the other Subsidiary company, Picturehouse Media Private Limited, Singapore, which is repayable on demand. The rate of interest, terms and conditions of loans, receipt of principal and overdue amounts are not applicable.

b. According to the information and explanations given to us, the Company has not taken unsecured loans from the parties covered in the register maintained under section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. a. According to the information and explanations given to us, the particulars of contracts or

arrangements entered into during this year which are required to be entered in the register maintained under section 301 of the Companies Act have been entered in the said register.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us the Company has not accepted deposits from public during this year. Therefore the provisions of section 58A, 58AA of the Act and any contravention of these provisions for the year under audit are not applicable.

7. The Company has an internal audit system to commensurate with its size and nature of its business.

8. As per the information and explanations given to us, we are of the opinion that the Company has made and maintained the cost records pursuant to the Rules made by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. a. According to the information and explanation given to us, the Company is depositing

undisputed statutory dues with appropriate authorities, like Provident fund, Investor Education and Protection fund, Employee''s State insurance, Income-tax, Sales-tax, wealth- tax, Service tax, Customs Duty, Excise Duty, Cess, wherever applicable, except few delays in depositing, Income Tax TDS and Service Tax on reverse charge remittances. There are no undisputed Statutory outstanding dues as at the 31st March, 2014 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute.

10. There are no accumulated loss of the Company as at the year end. The company has not incurred cash losses during the financial year covered by our audit and during immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment money borrowed from banks.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanation given to us the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

14. In our opinion and according to the information and explanation given to us the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

15. In our opinion and according to the information and explanation given to us, the Company has given corporate guarantee for loans taken by subsidiary company from banks and the terms and conditions whereof are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term from the Banks were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanation given to us the Company has not made any preferential allotment of shares during the year.

19. According to the information and explanation given to us, the Company has not issued any secured debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for M/s CNGSN & ASSOCIATES ChARTERED ACCOUNTANTS firm Registration No: 004915S

Date : May 28, 2014 Place : hyderabad Sd/- R. ThIRUMALMARUGAN Partner Membership No: 200102

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Picture house Media Limited (the Company), which comprises the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. These procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2013;

b) In the case of Statement of Profit and Loss, of the PROFIT for the year ended on that date; and

c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (the Order), as amended, issued by the Central Government of India, in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that

a. We have obtained all the in formation and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow statement comply with the accounting standards referred to sub-section (3C) of Section 211 of the Act;

e. on the basis of written representation received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director, in terms of clause (g) of sub-section (1) of section 274 of the Act ;

f. since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Act, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

1. a. In our opinion and according to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As per the information and explanations provided to us, the Company has physically verified the fixed assets during this year and there is no material discrepancies noticed on such verification.

c. As per the information and explanation provided to us, substantial part of fixed assets have not been disposed off during the year, which affects the going concern.

2. a. According to the information and explanations given to us, the management has conducted physical verification of inventory (Film Production in Progress - WIP) at reasonable intervals.

b. According to the information and explanations given to us the procedures of physical verification of inventory (Film Production in Progress - WIP) followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

c. According to the information and explanation given to us the Company is maintaining proper records of inventory (Film Production in Progress - WIP) and there are no material discrepancies were noticed on physical verification.

3. a. According to the information and explanations given to us, the Company has granted, unsecured loans to subsidiary company- PVP Cinema Pvt Ltd during earlier years, a party covered in the register maintained under section 301 of the Companies Act, 1956. It is informed that these advances are recoverable on demand, and the entire amount of Rs. 4,75,94,812/- has been provided for. During the year the Company has advanced a sum of Rs. 1,04,392/- to the other Subsidiary company, PVP Capital Limited, which is repayable on demand. The rate of interest, terms and conditions of loans, receipt of principal and overdue amounts are not applicable.

b. According to the information and explanations given to us, the Company has not taken unsecured loans from the parties covered in the register maintained under section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. According to the information and explanations given to us, there are no contracts or arrangements entered into during this year which are required to be entered in the register maintained under section 301 of the Companies Act.

6. In our opinion and according to the information and explanation given to us the Company has not accepted deposits from public during this year. Therefore the provisions of section 58A, 58AA of the Act and any contravention of these provisions for the year under audit are not applicable.

7. The Company has an internal audit system to commensurate with its size and nature of its business.

8. As per the information and explanations given to us, we are of the opinion that the Company has made and maintained the cost records pursuant to the Rules made by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues with appropriate authorities, like Provident Fund, Investor Education and Protection Fund, Employee''s State insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess, wherever applicable, except few delays in depositing, PF, Income Tax TDS and Service Tax on reverse charge remittances. There are no undisputed Statutory outstanding dues as at the 31st March, 2013 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute.

10. There are no accumulated loss of the Company as at the year end. The Company has not incurred cash losses during the financial year covered by our audit and during immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not borrowed any money from financial institutions or banks or debenture holders during the year and default in repayment does not arise.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanation given to us the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4(xiii) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

14. In our opinion and according to the information and explanation given to us the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

15. In our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, the Company has not obtained any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanation given to us the Company has made any preferential allotment of shares during the year.

19. According to the information and explanation given to us, the Company has not issued any secured debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



for M/s CNGSN & ASSOCIATES

Chartered Accountants

Firm Registration No: 004915S

Sd/- R. Thirumalmarugan

Camp: Hyderabad Partner

Date: 27th May, 2013 Membership No: 200102

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Picturehouse Media Limited as at 31st March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed there to. These Financial statements are the responsibility of the Company's management Our responsibility is to express an opinion on these financial statements based on our audit

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report)(Amendment) Order, 2004 issued by the Central Government of India in terms of sub- sedion (4A) of sedion 227 of the Companies Ad, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the Books of Account;

d) In our opinion the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt by this report, comply with the Accounting Standards referred to in Sub-sedion (3C) of Sedion 211 of the Companies Ad, 1956.

e) On the basis of written representation received from the Diredors, and taken on records by the Board of Directors, we report that, none of the Diredors are disqualified as on 31/03/2012 from being appointed as a Diredor in terms of clause (g) of sub-section (1) of section 274 of the Companies Ad, 1956.

f) Attention is drawn to the following material matters:

a) Note 12 in notes to the accounts with regard to the doubtful long term loans and advances given to Subsidiary Company of Rs. 452.7 7 lakhs and provision made for entire amount in earlier years. Note 14 in notes to the accounts with regard to the unsecured loans and advances to the Subsidiary Company f 38.83 lakhs, the company has since recovered a sum of Rs. 7 8.29 lakhs and on the balance of Rs. 20.54 lakhs we are not expressing any opinion as to the recoverability or otherwise.

b) Note 12 and 14 in notes to the accounts with regard to the advances for film finance. In the absence of materials, we are unable to express any opinion with regard to the recoverability or otherwise, for a sum of Rs. 7 029.98 lakhs included in these advances.

g) In our opinion and to the best of our information and according to the explanations given to us, subject to the effect on the financial statement on the matters referred to in the preceding paragraph, the said accounts read with the accounting policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of Balance Sheet, of the State of Affairs of the Company as at 31s' March 2012,

ii. In the case of Statement of Profit and Loss, of the PROFIT of the Company for the year ended on that date; and iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(Referred to in Paragraph 3 of our Report of even date)

1. a. In our opinion and according to the

information and explanations given to us, the company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As per the information and explanations provided to us, the company has physically verified the fixed assets during this year and there is no material discrepancies noticed on such verification.

c. As per the information and explanation provided to us, substantial part of fixed assets have not been disposed off during the year, which affects the going concern.

2. There are no inventory and hence the provision of clause 4 (ii) of the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable to the Company.

3. a. According to the information and explanations given to us, the Company has granted, unsecured loans to subsidiary company- PVP Cinema Pvt Ltd during earlier years, a party covered in the register maintained under section 301 of the Companies Act, 1956. It is informed that these advances are recoverable on demand. The outstanding as on the balance sheet date is Rs. 452.11 lakhs, shown as doubtful and provided for, and Rs. 38.83 lakhs shown as Unsecured. The rate of interest, terms and conditions of loans, receipt of principal and overdue amounts are not applicable.

b. According to the information and explanations given to us, the Company has taken unsecured loans from a company covered in the register maintained under section 301 of the Act. The amount involved is Rs. 2800.14 lakhs which was immediately repaid in full with interest.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. According to the information and explanations given to us, there are no contracts or arrangements entered into during this year which are required to be entered in the register maintained under section 301 of the Companies Act.

6. In our opinion and according to the information and explanation given to us the Company has not accepted deposits from public during this year. Therefore the provisions of section 58A, 58AA of the Act and any contravention of these provisions for the year under audit are not applicable.

7. The Company has an internal audit system to commensurate with its size and nature of its business.

8. As perthe information and explanation given to us the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

9. a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues with appropriate authorities, like Provident Fund, Investor Education and Protection Fund, Employee's State insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess, wherever applicable, except few delays in depositing TDS remittances. There are no undisputed Statutory outstanding dues as at the 31st March, 2012 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute.

10. There are no accumulated loss of the Company as at the year end. The company has not incurred cash losses during the financial year covered by our audit and during immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not borrowed any money from financial institutions or banks or debenture holders during the year and default in repayment does not arise.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanation given to us the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable to the Company.

14. In our opinion and according to the information and explanation given to us the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable to the Company.

15. In our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, the Company has not obtained any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanation given to us the Company has made allotment of equity by conversion of preferences shares during the year to the parties covered in the register maintained under section 301 of the Act and the price at which these shares have been converted is not prejudicial to the interest of the company.

19. According to the information and explanation given to us, the Company has not issued any secured debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For M/s CNGSN & ASSOCIATES

CHARTERED ACCOUNTANTS

R.THIRUMALMARUGAN

PARTNER

Membership No.200102

Firm Registration No. 004915S

Place: Chennai

Date: 30th May, 2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of TELEPHOTO ENTERTAINMENTS LTD, KRM Centre, 9th Floor, Door No. 2, Harrington Road, Chetpet, Chennai -600031 as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standardsgenerally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Attention is invited to Note No 1(C) in Schedule J (Notes on Accounts) The Company has been incurring cash losses for the past 4 years as there is no significant business income to meet the operating and administration expenses. The Company has no fixed assets and has had no business operations over the past four years. As on the 31st March 2010 the Companys current liabilities exceeded its total assets by Rs 6.76 lacs. The company has given interest free loan to the extent of Rs 452.11 lacs to 100% subsidiary company PVP Screens Private limited (Formerly AGS Properties Development India Private Limited). The subsidiary has a negative net worth and does not have any income earning assets. The Companys ability to continue as a going concern depends on future business options and financial support from the holding company. These conditions, indicate the

existence of a material uncertainty that may cast significant doubt about the Companys ability to continue as a going concern.

5. Further to our comments in paragraph 4 and the Annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company, so far as appears from our examination of the books.

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of written representations received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director of the Company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(v) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) In the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) In the case of the profit and loss account, of the loss of the Company for the year ended on that date; and

(c) In the case of the cash flow statement, of the cash flows for the year ended on that date



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF TELEPHOTO ENTERTAINMENTS LTD ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010



(i) The Company does not have any fixed assets and hence clause (i) of this order is not applicable.

(ii) The Company does not have any physical inventory and hence clause (ii) of this order is not applicable

(iii)

(a) The Company has granted unsecured interest free loans to one company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the yearend balance of such loans aggregates to Rs.452.11 lacs and Rs.452.11 lacs respectively. In our opinion since such loans were granted without any stipulations as regards repayment of principal or interest, commenting on whether the rate of interest, repayment terms are prima facie prejudicial to the interest of the company and whether they are overdue does not arise.

(b) The Company has taken an unsecured loan; from another company covered in the Register maintained under section 301 of the companies Act 1956. The maximum amount involved during the year and the yearend balance of such loans aggregates to Rs.2.03 lacs and Rs.2.03 lacs respectively. The loan taken is interest free. Since there are no stipulations as regards repayment of principal, commenting on repayment of such amount due does not arise.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and purchase and sale of goods and services. On the basis of our examination and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in the aforesaid internal control system.

(v)

(a) Based on the audit procedures applied by us

and according to the information and explanations provided by the management, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us, there are no transactions entered in the Register pertaining to such contracts or arrangements exceeding the value of five lakh rupees.

(vi) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules made there under.

(vii) In our opinion, the Company does not have an internal audit system.

(viii) The Company is not required to maintain cost records prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

(ix)

(a) According to the information and explanations given to us and the records of the Company examined by us, the Company has generally been regular in depositing undisputed statutory dues including, income-tax, sales tax, service tax, cess and other material statutory dues applicable to it with the appropriate authorities except for minor delays in depositing Tax deducted at source and Fringe Benefit Tax. Statutory dues in respect of provident fund, customs duty, excise duty, investor education and protection fund and employees state insurance are not applicable to the Company.

(b) According to the information and explanation given to us and the records of the Company examined by us, no undisputed amounts payable in respect of Income Tax, Service Tax, and cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) There are no dues of Income Tax, Salex Tax, Service Tax and Cess that have not been deposited on account of any dispute.

(x) The Company has been registered for a period of not less five years. Its accumulated losses at the end of the financial year are not less than fifty percent of its net worth and it

has incurred cash losses in the current year and the immediately preceding financial year also.

(xi) Based on our audit procedure and as per the information and explanations given by the management, the Company has no dues to any financial institutions, banks or debenture holders and hence the question of default in repayment does not arise.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund etc., are applicable, accordingly paragraph 4 (xiii) of the Order is not applicable.

(xiv) According to the information and explanation given to us and the records of the Company examined by us, the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year and hence paragraph 4 (xvi) of the Order is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that, during the year, short-term funds have not been used to finance long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the Register maintained under Section 301 of the Companies Act 1956 during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not made any public issue during the year.

(xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended 31st March 2010.

For PKF Sridhar & Santhanam

Chartered Accountants

Firm Registration No 003990S



V.Kothandaraman

Partner

Membership No.: 25973



Place: Chennai

Date: 30th July 2010