Experiential Learning Project

AUDIT OF CINEMA HALL

BATCH: 2022-25
SEMESTER: 5
AUDITING DIV: B
SUBMITTED TO : Prof. Soma Kulshrestha
SUBMITTED ON : 04/04/2024

SR.NO. NAME PRN ROLL NO

1. A S V S L Anuhya 22020621031 3001

2. Abhilasa Bhattacharya 22020621056 3106

3. Khushi 22020621231 3241

4. Samridhi Gupta 22020621348 3065

5. Krati Jain 22020621234 3042

 INDEX

Sr. Title Page

No. No.

1 Introduction 3

2 Organisational structure and departments 4-8

3 Details of Internal Control Process followed by 9-13

departments

4 Internal Audit and Risk Assessment Process 14-19

5 Steps taken by management to conduct statutory audit in 20-21

general

6 Innovative steps adopted to by PVR to minimise risk in 22-25

the process

7 Financial Analysis of the company 26-33

8 Future mission and vision of PVR 34

9 Achievements of PVR 35-36

10 Questionnaire 37

11 Geo tagged pictures 38

12 Conclusion 39

13 References 40

1
 ACKNOWLEDGEMENT

It is not possible to prepare a project report without the assistance & encouragement of other
people”. This one is certainly no exception.
On the very outset of this report, we would like to extend our sincere & heartfelt obligation
towards all the personages who have helped us in this endeavor. Without their active
guidance, help, cooperation & encouragement,we would not have made headway in this
project.

We are extremely thankful and pay our gratitude to our teacher Prof. Soma Kulshrestha for
her valuable guidance and support for completion of this project. Her expertise, knowledge
and feedback have been instrumental throughout the duration of this project.

We would also like to extend our deepest gratitude to Mrs Adya Sharma, Director of SCMS
Pune, for having given us the incredible opportunity to research, nurture creativity and trust
us to deliver quality work that meets the standards of the university. We extend our gratitude
to Symbiosis Centre for Management Studies, Pune for giving us this opportunity.

We would also like to extend our gratitude to the manager of PVR, Phoenix marketcity for
giving his valuable time and responding to our queries.

Last but not the least we extend our gratitude towards all the group members for their
constant efforts in finalising the project within the limited time frame. Any omission in this
brief acknowledgement does not mean lack of gratitude.

2
1.INTRODUCTION

PVR Cinemas, established in 1997, is a trailblazer in the Indian entertainment industry and a
leading multiplex cinema chain. Founded as a joint venture between Priya Exhibitors Private
Limited and Australia's Village Roadshow Limited, PVR introduced the multiplex culture to
India, with its first cinema opening in Saket, New Delhi. PVR quickly became known for
delivering premium movie-watching experiences through advanced technology, superior
infrastructure, and innovative services, transforming traditional single-screen theaters into
modern multiplexes. Over the years, PVR has expanded nationwide, adopting cutting-edge
cinematic technologies like 3D and 4DX, and offering luxury experiences such as Gold Class
and Director's Cut. Beyond movie exhibition, PVR has diversified into film distribution and
production, reinforcing its leadership in the Indian cinema industry through innovation and
strategic growth.

PVR Phoenix Marketcity Pune is a prime example of PVR's commitment to delivering

top-notch cinematic experiences. Located in one of Pune's most popular shopping
destinations, this multiplex offers the latest in cinematic technology and comfort, catering to
the city's diverse audience. From state-of-the-art sound and projection systems to luxurious
seating options, PVR Phoenix Marketcity Pune is designed to provide an unparalleled movie
experience.
The theatre has 1080 screens across all screens, 8 Audi (halls) and 43 movie screenings in
one day. The income for this month so far is 3 Crore owing to the massively successful Stree
2. However, still due to the losses incurred due to Covid, PVR is still not profitable.

Our project focuses on conducting a comprehensive audit of PVR Phoenix Marketcity Pune.
The audit will assess various aspects of the cinema hall, including its operational efficiency,
customer service quality, adherence to safety standards, and overall infrastructure. The
manager shared about different types of charges like electricity, camp charges and rent. The
goal is to identify areas of improvement that can enhance the customer experience and ensure
that the cinema continues to meet the high standards set by PVR. The audit will also explore
how well the cinema integrates the latest technologies and premium offerings to maintain its
competitive edge in Pune's dynamic entertainment landscape.

3
2. DETAILS OF ORGANISATIONAL STRUCTURE AND DEPARTMENTS
FUNCTIONS THERE

4
 Organisational structure

“PVR has an official, hierarchical organizational structure with several key management
levels, each with distinct responsibilities. Here’s an overview:

1.Board of Directors:
Chairman and Managing Director: Typically the top executive role, often held by the founder
or a senior executive, providing strategic direction and overseeing overall operations.
Independent Directors: Advisory members who ensure that company decisions align with
stakeholder interests.

2.Executive Management:
● CEO (Chief Executive Officer): Responsible for implementing strategies and policies
set by the Board, overseeing all company operations, finances, and growth strategies.
● CFO (Chief Financial Officer): Manages financial matters, including budgeting,
financial planning, and risk management.
● COO (Chief Operating Officer): Oversees daily operations, ensuring smooth cinema
operations across all locations.
● CMO (Chief Marketing Officer): Handles marketing, advertising, and public
relations, focusing on brand building and audience engagement.

3.Divisional Heads:

5
 ● Head of Operations: Manages cinema operations at regional and national levels to
ensure efficient operations and quality standards.
● Head of Business Development: Expands PVR’s presence through new openings,
acquisitions, and partnerships.
● Head of Human Resources: Oversees recruitment, training, and compliance with labor
laws.
● Head of IT: Manages technology infrastructure, including ticketing systems and
cybersecurity.
● Head of Food and Beverage: Oversees concession stands and in-theater dining, a key
revenue stream for PVR.

4.Regional Managers:
They lead operations in specific geographic areas, reporting to the Head of Operations,
ensuring cinemas meet corporate standards and targets.

5.Cinema Managers:
● Theatre Managers: Each cinema has a manager responsible for daily operations,
including staff management, customer service, and maintenance.
● Assistant Managers: Support Theatre Managers with ticketing, food and beverage,
and customer relations.

6.Support Staff:
Includes roles like customer care executives, projectionists, and housekeeping staff who
ensure smooth cinema operations.
This structure allows PVR to effectively manage its extensive operations in India while
focusing on growth, innovation, and customer satisfaction.”

PVR Cinemas operates with a well-structured organisational framework that ensures smooth
operations across its multiplex chain and other business verticals. Here’s an overview of its
organisational structure and the functioning of key departments:

1. Corporate Structure

PVR is typically organized into several key divisions, each focused on specific aspects of the
business. The overall structure is hierarchical, with the CEO at the top, followed by the
executive team, including department heads responsible for different functions. The corporate
office oversees the strategic direction of the company, while regional offices manage
operations in specific geographic areas.

2. Key Departments and Their Functions

1. Operations Department

6
PVR's Operations Department takes care of the overall management and execution on a daily
basis of all the cinema operations. It goes from ensuring the smooth running of a theatre to
overseeing the overall performance of the multiplex chain.

Operations is one department in PVR, which essentially forms the basic core of the everyday
running of this cinema chain. The department is accorded the responsibility for overseeing
everything that takes place within a single theatre: from the management of staff, as would be
evident from the under-discussion job posting on its website, to delivering efficient ticket
sales and exceptional customer service. The department also ensures maintenance and
cleanliness of the facility. They also oversee the inventory of food, beverage, and
merchandise. Security is also the responsibility of the Operations Department. They ensure
that it is excellent and manage the effective implementation. They also arrange for special
screenings or events ensuring that the involved company policies and other relevant
regulations are adhered to. In simple words, all this works towards giving a great experience
to PVR's customers in watching a movie.

2. Finance and Accounts Department

The finance and accounts functions at PVR are responsible for protecting the company's
financial health. They make financial statements, budgets, analyses on all types of financial
information, maintain tax compliance, cash flow, and investments, minimise risks, and
enhance efficiency in internal controls. In essence, this department plays a vital role in
ensuring that PVR's financial operations are sound and that the company is financially
healthy.

The Finance and Accounts Department at PVR, besides its core function, may also be
associated with strategic financial planning. This is an indication that the strategies being
carried out within it are for the long term, which will eventually build the company or
achieve the goals set by the same company. It may also play a critical role in mergers and
acquisitions by offering financial analysis and support. Further, they could also be charged
with the responsibility for investor relations, which is all about apprising the investors and
analysts of the business financial performance and future prospects. Last but not least, the
department can be involved in managing costs through the identification and implementation
of measures that save costs to boost profitability.

3. Security Department

The Security Department at PVR lies within the mandate for the safety and security of the
customers, employees, and company property. They are in charge of managing access control
for safety during peak times or when special events are held, preparing emergency response
plans, overseeing activities on surveillance systems to help prevent theft, vandalism, and
other losses and conduct investigations on any security incidents. By creating a safe and
secure environment, the significant contribution that the Security Department at PVR
provides to the business is through this factor.

7
Besides these core functions, the Security Department at PVR must engage in a few more
activities. It can offer security training to the staff including customer service employees and
top management. There has to be good networking with the local police, fire department, and
other emergency services. The department can also execute risk assessments to identify and
counter possible security hazards. In addition, keeping abreast of the latest security
technologies and the adoption of such technologies can contribute to improving the
effectiveness of the department.

4. Food and Beverage Department

The food and beverage department of PVR looks after all the food and beverage propositions
that are managed by the company's theatres. It takes care of menu development, procurement,
inventory control, quality control, staff training, pricing, and promotion. Proper management
in these areas really makes a big difference in value addition to the overall customer
experience at PVR theatres.

Beyond its primary responsibilities, the Food and Beverage Department at PVR may also
focus on areas such as food safety, waste management, customer feedback, and cost control.
This ensures that the department not only provides high-quality food and beverages but also
operates in a responsible and sustainable manner, while addressing customer needs and
managing costs effectively.

8
3. DETAILS OF INTERNAL CONTROL PROCESSES FOLLOWED BY
DEPARTMENTS

Processes for internal control are necessary to ensure asset protection, accurate financial
reporting, and seamless operations. Additionally, internal control helps maintain a high
standard of customer service and safety by monitoring operations and enforcing security
protocols. With strict security measures and frequent audits, it aids in protecting assets
including cash, equipment, and inventories. Internal control systems also assist in monitoring
and enhancing employee performance by making sure they follow the policies and
regulations. Overall, it supports the cinema's reputation, profitability, and long-term success.
An in-depth examination of the internal control procedures in PVR Cinema departments,
generally adheres to the below provided. These procedures are designed to guarantee the
security, effectiveness, and integrity of their operations

1. Operations Department
The daily operations of the movie theater, such as concessions, customer service, and
screenings, are handled by the operations department. This department's internal controls are
centered around the following:

a) Ticketing and screening procedures:

● Segregation of Duties: To avoid fraud, it is made sure that distinct staff members are
in charge of ticket sales, collecting, and validation. To prevent manual errors, ticket
sales are frequently recorded electronically. Similarly the shift are divided as night
and day shifts, with day shift from 9 am to 5 pm and night shift from 5pm to 2am.
● Reconciliation: Every day, the number of tickets sold is compared to the attendance
record, and the amount of cash or digital payments received is matched.
● Inventory Control: Strict inventory controls are in place for concessions to monitor
food and beverage stock levels. Periodic inventory audits are carried out to verify that
recorded levels correspond with actual inventories.
● Access Controls: Only authorised staff have access to projectors and screening
equipment. Logs of equipment utilisation are kept to track usage and access.

b) Customer service:
● Feedback and Complaint Management: A systematic procedure with documentation
of all interactions for managing consumer complaints. Frequent reviews of these
documents guarantee that grievances are addressed promptly and satisfactorily.
● Training Programs: Frequent training and assessment programs to ensure that
employees follow customer service guidelines and lower the chance of reputational
harm.

9
 2. Accounts Department
Budgeting, financial reporting, and financial transactions are under the purview of the
accounts department. Here, internal controls are essential for maintaining financial accuracy
and detection of errors.
a) Accounting Reporting:
● Documentation: To ensure accuracy in financial reporting, every financial transaction
is backed up by the relevant paperwork (receipts, billis , invoices, etc.). Every month
the head manager from PVR , Mumbai ( the main head office ) comes and checks the
billing accuracy and ensures that each and every nominal transaction is also recorded
on the bills .
● Regular Audits: Internal audits are carried out on a regular basis to confirm that
financial statements are accurate and that business rules and regulatory obligations are
being followed.
● Approval Hierarchies: In order to avoid unauthorized transactions, all financial
transactions, including payments and purchases, are subject to an approval process
with clearly defined hierarchies.
● Bank Reconciliation: To make sure all transactions are accurately recorded, bank
statements and the company's financial records are regularly reconciled since majority
of the transactions are conducted online. 85% of the sales are online while only 15 %
are through cash.

b) Expense management and budgeting:

● Budgeting : Tight budgetary controls are given that guarantees that spending stays
within authorised bounds. Any deviations from the budget are looked into and
supported. The departments are given a float of some amount and they have to
maintain proper records for that.
● Authorization for Expenses: Depending on the total amount, there are various levels
of authorization for expenses. Senior management permission is required for
high-value expenses.

c) Payroll Verification:
● Payroll Management : Verified attendance and performance data are the basis for
processing payroll, and frequent audits guard against payroll fraud.
● Segregation of Duties: To reduce the possibility of fraud or mistakes, separate people
are in charge of payroll distribution, approval, and preparation

3. Security Department
The Security Department ensures the safety of patrons, employees, and assets. Internal
controls in this department focus on monitoring and incident management

a) Access Control
● Restricted Access: Sensitive areas like cash rooms, server rooms, and control rooms
are accessible only to authorized personnel. Access logs are maintained and reviewed
regularly.

10
 ● Surveillance Systems: CCTV cameras are strategically placed to monitor public areas,
entry/exit points, and sensitive zones. Surveillance footage is regularly reviewed and
stored for a specified period.
● Visitor Management: A strict visitor management system is in place, requiring all
visitors to sign in and out. Visitors are escorted by security personnel when accessing
restricted areas.

b) Incident Management:
● Incident Reporting: Any security breaches or occurrences are recorded and
investigated using a formal incident reporting system. This covers thefts, medical
crises, and fire safety drills.
● Crisis Management Plans: To guarantee readiness in the event of an emergency, crisis
management plans (e.g., fire, bomb threats, etc.) should be routinely updated and
practiced.
● Security Audits: Regular security audits are conducted to find vulnerabilities and put
remedial measures in place.

c) Asset Protection
● Asset Tracking : All essential assets, such as cash registers and projectors, are
recorded and identified using inventory management systems. All asset movements
are tracked and authorised by the appropriate authorities.
● Cash Management Protocols: stringent measures to manage cash, such as dual
custody for cash transfers, safe cash storage, and frequent cash register audits.

4. Food & Beverage Department

At PVR, the Food and Beverage (F&B) division is essential to improving customer
satisfaction and bringing in a sizable sum of money. This department's internal controls are
concentrated on inventory management, food safety, and sales process optimisation.
a) Keeping track of inventory
● Stock control: To monitor the availability of beverages, packaged items, and raw
materials, regular inventory counts are carried out. Sales records are reviewed with
these numbers to find any disparities and stop theft or waste.
● Automated Inventory Systems: To lower the possibility of human mistake, many PVR
locations employ automated inventory systems that update stock levels in real-time as
sales are made.
● Request and Approval: A formal approval procedure is required for all requests for
stock. Requests for inventory replenishments can only be made by authorised staff,
guaranteeing that every stock movement is recorded.

b) Quality Assurance and Food Safety

● Verification of Suppliers: PVR makes certain that all providers of food and drink
satisfy strict quality requirements. To ensure that suppliers are following health and
safety laws, audits are carried out on a regular basis.

11
 ● Hygiene Protocols: In places where food is prepared and served, strict hygiene
regulations are in place.
● Control of Expiration and Spoilage: A mechanism is implemented to monitor food
items' expiration dates, guaranteeing that spoilt or expired goods are swiftly taken out
of stock. Apart from this there is a 1% spoilage and disposal rate being maintained on
daily basis on the sales.

c) Management of Sales and Revenue

● Point of Sale (POS) Systems: POS systems are used to process sales. They
automatically record transactions, which lowers the possibility of income leakage.
The generation of thorough sales reports for management review is another benefit of
these systems.
● Divided Responsibilities: To reduce the chance of fraud or theft, different personnel
handle cash, make meals, and serve customers. Food preparers and cashiers do not
have access to stockrooms.
● Handling Cash: At the conclusion of each shift, cash from sales is gathered and
reconciled. A further degree of security is added when cash is held in two places
during transfers to the safe or bank deposits.

d) Customer Service
● Service Standards: To guarantee consistency in the client experience, staff members
are trained to adhere to standard operating procedures for service. Staff performance
is evaluated through regular assessments.
● Controls over Discounts and Promotions: Strict controls are in place to prevent
unauthorised discounts and misuse of discounts and promotions, which are monitored
through the POS system.

Importance of an Effective Internal Control system in a PVR

1. Efficiency of Operations and Compliance:
● Internal controls guarantee that all transactions, encompassing ticket sales and
income, are precisely documented. Real-time reconciliation and discrepancy
prevention are made possible by the system's integration of daily cash and card
transactions with the ticketing systems.
● The controls are made to make sure that operations follow industry best practices and
legal requirements, as well as business policies and procedures.PVR INOX Phoenix
Marketcity's internal control system is made to make sure that all ticket
sales—whether they are made with cash or a credit or debit card—are appropriately
tracked down and documented.
2. Asset Protection:
● An asset management system is used to tag and track tangible assets like
projectors, sound systems, and other machinery. Monitoring the state and
placement of these assets is aided by routine inventory audits and physical
inspections.

12
 ● By making sure that priceless equipment is properly maintained and secured, the
strict controls surrounding asset tracking aid in preventing theft and
misplacement.
3. Preventing Fraud:
● Employees' tasks are divided up among themselves to reduce the possibility of
fraud.
● For instance, managing ticket sales and processing refunds are two different tasks.
By establishing checks and balances, this segmentation lowers the likelihood of
fraud.
4. Frequent Tracking and Reporting:
● Internal audits and reviews keep an eye out for any indications of fraud or anomalies,
and they put processes in place to deal with and fix any problems they find.To lower
the chance of fraud, the movie theater uses segregation of duties.
● For example, the staff member in charge of ticket sales and the one in charge of
refunds are not the same. This division makes sure that no one worker is in charge of
receiving money and allocating it. By doing this, the movie theater reduces the
possibility of dishonest practices like unapproved refunds or data tampering. To
further prevent fraudulent activity, routine audits and checks are carried out to
guarantee that these rules are being followed.
5. Accuracy of financial statements and constant checks and balances:
Conducting regular assessments and reviews of internal controls aids in the identification
of any potential flaws or areas in need of development. Based on these evaluations, the
organisation implements corrective measures to improve the efficacy of the controls.

13
4. INTERNAL AUDIT AND RISK ASSESSMENT PROCESS
At PVR Phoenix Marketcity, Pune, internal control and risk assessment are crucial for
ensuring efficient operations. Risk assessment systematically identifies and evaluates
potential risks, such as operational disruptions and financial mismanagement, and develops
strategies to mitigate these risks.
The following section will detail the internal audit of PVR Phoenix, and risk assessment
strategies.

INTERNAL AUDIT
At PVR Phoenix Marketcity, internal audit is essential to assessing and improving the
efficiency of risk management, governance procedures, and internal controls. Internal audits
ensure that operating procedures are effective, financial reporting is correct, and regulatory
compliance is upheld for a well-known movie theatre like PVR Phoenix Marketcity. Internal
audit helps it achieve operational excellence and preserve its image in the cutthroat
entertainment sector by promoting accountability and transparency.

Audit Committee
“We take internal controls seriously. This is reflected in the active role of our Audit
Committee, which works closely with internal and statutory auditors, as well as management,
to address any issues within their purview.”
Among its duties are creating a yearly audit plan, checking financial reporting procedures,
evaluating internal controls and risk management, and supervising financial statements. The
Committee also engages in interactions with auditors, makes recommendations regarding the
selection and compensation of auditors, examines transactions involving related parties,
keeps an eye on the Whistle-Blower mechanism, and closely examines loans and investments
made between corporations.

Internal Auditors for PVR:

For FY 2024–2025, the business has reappointed M/s. KPMG Assurance and Consulting
Services LLP as internal auditors. KPMG, a renowned consulting and auditing firm, will
assess PVR's financial transactions, operational effectiveness, and internal controls. Protiviti
India also does audits at specific movie theatre sites, such as PVR Phoenix Marketcity in
Pune, to guarantee operational excellence, transparency, and compliance with regulations.

Internal Audit Objectives:

1. Verify Compliance: Assess compliance with company rules, laws, and industry
standards to make sure all operations follow the necessary directives.
2. Safeguard Assets: Examine security procedures and inventory controls in order to
audit and safeguard material assets, such as money and machinery.
3. Prevent and Detect Fraud: Put procedures in place, keep an eye out for them, and act
quickly to stop fraud and operational mistakes.

14
 4. Keep Accurate Records: Make certain that all financial transactions are promptly and
accurately documented, and that the reports appropriately depict the theatre's actual
financial standing.
5. Enhance Operational Efficiency: Evaluate existing operations and make
recommendations for ways to improve efficiency, cut costs, and streamline
procedures.

Internal Audit Process:

1. Determine the goals and scope of the audit by analysing the risks and drawing
conclusions from previous audits: Every year, the internal audit team drafts a
comprehensive plan. The areas that will be examined are listed in this plan, including
cash handling, ticket sales,etc. To ensure that all ticket sales are accurately recorded and
matched with the money received, they may, for instance, schedule an audit.
2. Surveying the Field and Gathering Data: The strategy serves as the basis for the audit
team's checks. To check that employees are following the correct procedures, examine
how ticket sales are handled, and confirm that financial records match the actual cash
and electronic payments, an official from Mumbai Head office visits PVR Phoenix
Marketcity. They look into things more if they discover anomalies, including cash and
ticket sales that don't match.
3. Examining and Assessing: The audit team writes a report outlining their findings after
finishing their review. This report offers recommendations for improvement along with
any faults found, such as gaps in the cash handling procedures or deficiencies in the
ticketing process.
4. Analysis and Reporting: After examining the report, the Audit Committee collaborates
with PVR Phoenix Marketcity's management to resolve any concerns. For example, in
the event that the audit identifies certain cash handling practices that require
strengthening, the management will put the recommendations into practice.
5. Follow-Up and Monitoring: Internal auditors monitor everyday activities in addition to
planned audits to guarantee continuous compliance. To guarantee that advancements are
sustained, they might watch cash handling procedures or randomly audit transactions on
a regular basis.

Areas Covered Under Internal Audit:

1. Financial Transactions and Controls
2. Cash Handling Procedures
3. Operational Efficiency
4. Compliance with Policies and Procedures
5. Customer Service and Experience
6. Security and Risk Management
7. Procurement and Vendor Management
8. Health and Safety Compliance
9. IT Systems and Data Security
10. Internal Controls and Risk Assessment

15
Effectiveness of Internal Control and its Importance for Internal Audit

The above graph shows the percentage of internal control issues resolved for PVR INOX. It
is important to keep track of identification and resolution of all issues. PVR ensures that they
even make a note of issues that have not been resolved. Ensuring the efficiency
internal controls are crucial for a comprehensive internal audit of PVR Phoenix Mall. Weak
controls could lead to untracked sales and inconsistencies or losses.
Control Deficiencies:

For example, PVR Phoenix once caught a group of 8 students who had gained access to the
theatre and were watching a film on one ticket. This was when they realised that they had a
technological control deficiency and they needed to use a scanner while entering to ensure
that the same ticket cannot be scanned twice. This solution was applied promptly to ensure
this situation is not repeated.

16
Strong internal auditing is important, as seen by the way PVR Phoenix Marketcity in Pune
has developed its internal control protocols. The internal control structure was initially
designed to incorporate basic controls for smooth operations, but as the theatre's complexity
increased, it became increasingly complex. PVR Phoenix Marketcity uses strict procedures,
cutting-edge technology, and frequent asset inventories to prevent fraud and monitor
transactions in real time. These enhancements strengthen the internal audit's role in
guaranteeing the efficacy of these controls in addition to demonstrating a dedication to
financial integrity and operational efficiency. The theatre's cutting-edge control system and
thorough auditing procedures can work together to help PVR Phoenix Marketcity uphold its
high standards and preserve its good name.

Risk Assessment Report for PVR Phoenix Mall, Pune

Introduction to Risk Management at PVR INOX

PVR INOX has integrated risk management comprehensively within its operating
framework, emphasising the critical role risk management plays in achieving sustainable
growth. The organisation's comprehensive risk management policy offers a systematic
structure for identifying, assessing, prioritising, and mitigating risks. This policy ensures that
risks are handled carefully to minimise any possible negative consequences they may have on
the business. It acts as a set of rules as well as a strategic instrument

PVR’s Risk Management Framework

PVR INOX incorporates both internal and external risks into its clearly defined risk
management architecture. As required by Listing Regulation 21 (Regulation 21), the Risk
Management Committee is essential to the development, application, and ongoing evaluation
of this framework. The committee guarantees the effective monitoring and management of all
potential risks, encompassing financial, operational, sectoral, sustainability, and cybersecurity
threats, through continuous monitoring.

The committee's duties include the following:

1. Creating a Comprehensive Risk Management Policy: This policy focuses on

financial, operational, and sustainability-related risks and provides frameworks for
detecting both internal and external risks.
2. Countermeasures: creating internal control systems and procedures for hazards that
have been recognised.
3. Real-time Monitoring and Evaluation: PVR Phoenix Marketcity monitors transactions
and activities in real-time using cutting-edge technology, which enables prompt
discrepancy discovery and correction. To ensure the risk management system's
continued efficacy, it is updated on a regular basis to accommodate changes in the
industry.
4. Employee Training: PVR invests in continuous training for its employees on the
importance of internal controls and risk management. This ensures that staff at all

17
 levels are aware of their roles in maintaining the integrity of financial and operational
processes.
5. Comprehensive Audits: PVR conducts regular internal audits across its operations to
ensure compliance with internal controls. These audits are carried out by KPMG and
reviewed by the Audit Committee, ensuring an independent evaluation of the
company’s risk management processes. In addition to internal audits, the company
engages external auditors to provide an additional layer of assurance.

PVR Phoenix Mall: Specific Risk Considerations

All PVR INOX locations use the same risk management framework, but PVR Phoenix Mall
in Pune has particular difficulties that call for customised risk assessment techniques. Among
them are:

1. Operational Risks: The mall receives a lot of traffic, therefore operational concerns
like crowd management, emergency response, and safety protocols need to be given
extra thought. PVR Phoenix has implemented advanced crowd control techniques and
regular emergency exercises to guarantee safety.
2. Market Risks:
3. Compliance and Regulatory Risks: Because PVR Phoenix is a part of a larger retail
complex, it is governed by both the rules governing entertainment venues and retail
enterprises. The risk management team at PVR Phoenix works closely with law
enforcement in the area to ensure full compliance and lower the likelihood of
regulatory fines.
4. Technology and Cybersecurity Risks: PVR Phoenix prioritises cybersecurity because
of the growing reliance on internet platforms and digital tickets. With the majority of
their tickets being sold online, PVR Phoenix has introduced scanners to ensure that
only those who purchased the tickets can enter.

What PVR Phoenix Does Differently

PVR Phoenix Mall's risk management strategy differs significantly from those of other PVR
locations and rivals in numerous important ways. These include:

● Localised Risk Management: While PVR is a giant in the entertainment industry, the
preferences of audiences keep changing with time. Keeping up with the consumer is
extremely important for the company, especially, the branch at Phoenix Mall. Since
the mall is in close proximity to many colleges and residential areas, in an area like
the Viman Nagar, they need to ensure to cater to the specific needs of their target
audience. Films like Stree 2 were screened all day from 8AM to past 11PM to cater to
all of their customers.
● Targeted Marketing Strategies: PVR Phoenix Mall targets the local population with its
marketing initiatives, such as by providing exclusive deals and events that appeal to
the locals and college students. To properly manage financial risk, they will, for
example, sponsor student discount nights or exclusive premieres, matching their

18
 offerings with local interests and driving foot traffic. For eg, the theatre rereleased
Laila Majnu, a film that was popular among mainly college students and thus, the
pricing of its tickets was kept at Rs 99 only.
● Pricing and Programming with a Family in Mind: Families are the focus of PVR
Phoenix Mall's movie programming and pricing policies. For instance, they offer
special family ticket bundles at discounted prices and schedule family-friendly films
at suitable hours. In addition to drawing in family audiences, this strategy lowers
financial risk by generating steady attendance and income from a significant client
base. For example, family films are screened especially late at night when new
parents like to come while their children are asleep.

19
5. STEPS TAKEN BY MANAGEMENT TO CONDUCT STATUTORY AUDIT IN
GENERAL

To carry out a statutory audit, management usually goes through some steps to ensure that the
audit is properly conducted and complies with the legal procedure. Here are the main steps:

1. Appointment of Auditors: The company has an appointment of external statutory

auditors. Such an appointment is normally done in the general meeting of the shareholders,
but if the governing laws of the company permit it, it can also be done through the board of
directors.

2. Preparation of Financial Statements: The management prepares the company's financial

statements, and they should follow required accounting standards and regulations during their
preparation. Among others, financial statements include the balance sheet, income statement,
cash flow statement, notes to accounts.

3. Internal Review and Reconciliation: Just before the statutory audit, management ensures
an internal review of all financial records and a reconciliation of accounts, making sure that
all things are right and fairly presented. It provides assurance that all transactions have been
correctly recorded in accounts and the financial statements present a true and fair view of the
financial position of the entity.

4. Documentation and Evidence Gathering: Management prepares and gathers all

necessary documentation and evidence needed to be put up for review by the auditors. This
includes contracts, invoices, bank statements, and other supporting documents that verify the
accuracy of financial records.

5. Coordination with Internal Auditors: Where the company has an internal audit function,
management ensures there is coordination between the work of internal and external auditors.
Reports from internal audits and findings are shared with the statutory auditors to provide
them with insights into the company's financial and operational controls.

6. Audit Planning and Scope: Management collaborates with the statutory auditors during
the planning process of auditing, hence defining the scope, timelines, and areas to be focused
on. This will mean identifying the key risks and ensuring that the audit covers all the
necessary aspects of the company's financial operations.

7. Facilitation of the Audit Process: Management during the course of the audit enables the
auditor to work freely by providing all records answers to his queries with explanations of
discrepancies—without this kind of cooperation, a smooth and efficient audit is not possible.

20
8. Review and Response to Audit Findings: After the auditor's reviews are over, they report
their findings. Management then goes through these findings and takes the corrective action
required if some problems were identified. This might be an adjustment of the financial
statements or enhancing internal controls.

9. Audit Report and Certification: Upon satisfaction of each issue, the auditors compile the
final report, which contains an opinion regarding the financial statements. The same is
presented to the board of directors and then, with time, to the shareholders.

10. Compliance and Reporting: Finally, the management ensures that the statutory audit
report and the financial statements audited are submitted with the appropriate regulatory
bodies and presented to the stakeholders as per the law of the land. These steps ensure that
the statutory audit is well conducted, efficient, and effective with all regulatory requirements.

21
6. INNOVATIVE STEPS ADOPTED BY PVR TO MINIMISE RISK IN THE
PROCESS

In the dynamic and competitive multiplex sector, PVR's financial success is directly related to
its capacity to manage audit risk. To protect its reputation, investor trust, and regulatory
compliance, PVR is likely to use a comprehensive strategy that includes innovative
technologies, strong internal controls, smart data analytics, and strategic third-party
management. By using these innovative measures, PVR may improve the accuracy and
dependability of its financial reporting, safeguard its assets, and develop a culture of
transparency and responsibility.

Some strategies that are undertaken by PVR to minimise their risk are as follows:

1. Advanced Technology and Automation

● Robotic Process Automation (RPA)

It is a technology that uses software robots to automate repetitive, rule-based tasks. These
software robots can mimic human actions, such as interacting with applications, processing
data, and triggering responses. Robotic Process Automation is mainly used by PVR in ticket
processing and seat allocation. PVR uses RPA to integrate with its booking system, allowing
bots to handle high volumes of ticket reservations and cancellations seamlessly.

PVR Cinemas' relationship with ticketing companies such as BookMyShow benefits greatly
from Robotic Process Automation (RPA) for managing ticket bookings and seat inventory.
When a customer books a movie ticket on BookMyShow, a RPA bot manages the entire
transaction. The bot validates and processes the payment, adjusts PVR's seat inventory in real
time, and gives the consumer a confirmation email or SMS containing booking information
and a QR code. This technology guarantees that seat availability is appropriately reported on
all platforms, reducing double reservations and increasing the overall customer experience.

RPA may greatly boost productivity by automating repetitive operations, freeing up people'
time for more strategic and difficult work. RPA can also reduce errors by reducing the need
for human intervention in error-prone processes. This not only increases data accuracy but
also lowers costs by eliminating the need for manual labour and streamlining operations.
Furthermore, RPA can improve customer satisfaction by providing faster reaction times and
more accurate data.

● BlockChain Technology
Blockchain technology is a decentralised digital ledger system that records transactions
across several computers in such a way that the data cannot be changed retrospectively. Each
record or "block" comprises a list of transactions and is linked to the previous block,
producing a chain of blocks. This structure ensures transparency, security, and immutability,
as adding a block to the chain makes it nearly impossible to edit or delete.

22
For companies like PVR Cinemas, blockchain technology offers a powerful tool for
minimising audit risk and enhancing audit processes. Blockchain technology's immutability
and consensus processes are critical in reducing fraud and errors. In PVR's case, adopting
blockchain to manage financial transactions and inventory data assures that records cannot be
altered or deleted. For example, once a ticket sale or financial transaction is recorded, it
remains unmodified and forever available on the blockchain. This significantly minimises the
likelihood of fraudulent activity, such as altering records or manipulating data.

Blockchain technology enhances compliance with regulatory requirements through its

transparent and immutable records. For PVR, this means that all necessary compliance
documentation and reports are accurately recorded and easily accessible for verification.
Blockchain technology streamlines and smoothens the audit process by giving auditors direct
access to a complete and unedited transaction history. The PVR finance team can offer
auditors access to the blockchain ledger, allowing them to swiftly verify transactions and
financial records. This access saves time and effort on manual data verification and
reconciliation, making the audit process more efficient.

2. Enhanced Internal Controls

● Risk Based Auditing

Risk-Based Auditing (RBA) is a strategic technique to identify and manage an organisation's
most severe risks. Adopting RBA helps organisations like PVR Cinemas reduce audit risk by
focusing resources and efforts on areas with the biggest potential for errors.

Companies like PVR do this by assessing potential risks to determine which areas require
more focused auditing. The steps are:

Risk Assessment: PVR would begin by doing a thorough risk assessment to identify potential
sources of concern. This includes examining financial processes, operational procedures,
information technology systems, and regulatory compliance. PVR, for example, could
examine risks related to ticket sales, inventory management, and financial reporting.

Prioritisation: Using the risk assessment, PVR prioritises the locations with the highest
danger levels. High-risk areas could include revenue recognition from ticket sales, cash
handling at concession stands, or tax compliance.
If PVR determines that revenue from online ticket sales is a high-risk area due to potential
fraud or errors, they will assign additional audit resources to monitor and verify transactions
and controls in this domain.

● Segregation of Duties
Segregation of Duties (SoD) is a critical internal control principle designed to reduce the risk
of fraud and errors by ensuring that no single individual has complete control over a

23
transaction or process. For companies like PVR Cinemas, implementing SoD is essential in
minimising audit risk and maintaining robust financial and operational controls.

To improve security and limit the risk of fraud, PVR Cinemas implements Segregation of
Duties, which involves dividing essential financial and operational activities among separate
people. For example, while one person handles ticket sales, a different finance team member
is in charge of reconciling the sales income to ensure correctness and integrity. This
separation also applies to financial transactions, where one employee may initiate a
transaction but another must examine and authorise it, preventing a single worker from
having entire control over the process. As a result, a cashier managing ticket sales does not
have access to the financial systems that record these sales, ensuring that transactions are
correctly reconciled and lowering the risk of unauthorised or fraudulent activity.

The organisation keeps complete logs of all financial transactions and system changes,
including information on who initiated, approved, and carried out each activity. These logs
serve as an important audit trail that auditors use to ensure compliance with SoD and discover
any unauthorised or anomalous activity. For example, PVR uses an integrated system to log
all access and transaction activity, allowing auditors to follow and verify who authorised or
executed specific transactions. This method ensures that no single individual has undue
control over essential processes, hence improving the overall integrity and transparency of
PVR's operations.

3. Employee Training and Awareness

To reduce audit risk, PVR Cinemas offers comprehensive employee training and awareness
programs that focus on ethics and fraud prevention. The organisation conducts extensive
ethics training to ensure that staff understand the significance of ethical behaviour and
compliance with financial requirements. This course gives clear standards for permissible
actions and the repercussions of noncompliance. PVR also educates staff on common fraud
tactics and how to report suspicious behaviour, building a culture of awareness and
accountability. PVR improves internal controls and minimises the likelihood of audit issues
by providing staff with the knowledge and resources they need to identify and handle
suspected fraud.

4. Data Analytics and Visualisation

● Data Visualisation
Companies such as PVR Cinemas employ data visualisation technologies to reduce audit risk
by translating complex financial data into clear, actionable information. PVR can exhibit
complex financial data in user-friendly representations like charts, graphs, and dashboards by
utilising advanced visualisation techniques. This method allows auditors and financial
managers to quickly discover trends, patterns, and anomalies that could suggest possible
problems or areas of concern. For example, PVR may utilise data visualisation to track ticket
sales, income streams, and spending trends in real time, showing any odd changes or
anomalies.

24
 ● Predictive Analytics
Predictive analytics entails analysing historical data and applying statistical algorithms to
detect patterns and trends that may indicate future problems. For PVR, this could entail
analysing ticket sales, revenue patterns, and operational data to foresee potential problems
like revenue deficits, inventory anomalies, or fraud.

For example, PVR may employ predictive algorithms to foresee swings in ticket sales based
on previous trends, seasonal considerations, and market conditions. If the model forecasts a
big divergence from predicted sales, PVR can look into potential causes, alter marketing
strategy, or evaluate operational processes to reduce the risks. Similarly, predictive analytics
can assist uncover irregularities in financial transactions or inventory levels, allowing PVR to
address possible problems before they affect financial statements or operational efficiency.

5. Regulatory Compliance
To reduce audit risk, PVR Cinemas prioritises regulatory compliance by maintaining
knowledge on all applicable financial rules, such as taxation, accounting standards, and
securities legislation. The organisation continuously analyses regulatory requirements to
maintain compliance with current laws and procedures. PVR also engages with legal and
accounting specialists to get expert advice on regulatory updates and best practices. This
proactive strategy enables PVR to adopt critical changes quickly, maintain accurate and
compliant financial records, and reduces the chance of regulatory infractions or financial
misstatements during audits. By incorporating these procedures, PVR strengthens its
compliance structure and mitigates any audit difficulties.

25
7.FINANCIAL ANALYSIS OF THE COMPANY

CONSOLIDATED BALANCE SHEET - PVR INOX

The balance sheet reflects the financial position of PVR for the year ending March 31, 2024,
compared to the previous year ending March 31, 2023. Here's a detailed analysis and
interpretation of the changes in the company's financials:
1. Asset Growth

26
 Non-current Assets:
● Property, Plant, and Equipment (PPE) has increased from ₹29,431 million to ₹31,056
million suggests that PVR has made capital investments in its fixed assets, likely
expanding or upgrading its cinema infrastructure.
● Capital Work-in-Progress shows a slight decrease from ₹2,473 million to ₹2,464
million indicates that ongoing projects are nearing completion, with some being
capitalised into PPE.
● Right-of-use Assets shows slight increase from ₹53,746 million to ₹54,917 million
reflects additional lease agreements, likely for new or renewed cinema locations.
● Goodwill is at constant value at ₹57,431 million shows no significant new
acquisitions, implying stable operations without major mergers or takeovers affecting
goodwill.
● Other Intangible Assets decrease from ₹1,480 million to ₹1,377 million, suggesting
amortisation, reducing the book value of intangible assets such as brand names or
software.
● Financial Assets have a small decrease in other financial assets (from ₹4,628 million
to ₹4,306 million), which might indicate lower investments or returns on non-current
financial instruments.
● Deferred Tax Assets and Income Tax Assets have small variations that indicate
changes in tax provisions or adjustments, potentially from changes in the company’s
profitability.
● Other Non-Current Assets drop from ₹1,653 million to ₹1,066 million suggesting
either the realisation of these assets or a reduction in advances or deposits held.

The increase in total non-current assets from ₹156,269 million to ₹158,265 million
indicates long-term investments, focusing on expanding physical infrastructure and
maintaining stable goodwill.

Current Assets:
● Inventories increased from ₹664 million to ₹725 million, suggesting that PVR has
more stock in hand, possibly due to anticipated higher demand for concessions.
● Investments show a significant increase from ₹2 million to ₹161 million indicates
increased short-term investments, perhaps as part of treasury management.
● Trade Receivables increase from ₹1,825 million to ₹2,346 million could indicate
higher credit sales, possibly from increased box office collections or extended credit
terms to partners.
● Cash and Cash Equivalents increase from ₹3,331 million to ₹3,930 million,
demonstrating strong liquidity and providing a buffer for operations and debt
obligations.
● Bank Balances and Other Financial Assets drop in bank balances (from ₹385 million
to ₹108 million) and other financial assets (from ₹512 million to ₹312 million) might
reflect a shift in cash management or reduced reliance on non-core assets.
● Loans and Other Current Assets A decrease in loans and other current assets suggests
improved efficiency in loan recoveries and working capital management.

27
The increase in total current assets from ₹8,898 million to ₹9,939 million indicates better
liquidity and more robust short-term asset growth, positioning PVR well for operational
needs and short-term obligations.

The overall increase in total assets from ₹164,767 million to ₹168,204 million reflects a
growth strategy focused on expanding physical infrastructure while maintaining strong
liquidity.

2. Equity and Liabilities

Equity:
● Equity Share Capital has a slight increase from ₹980 million to ₹981 million, which
indicates marginal equity infusion, possibly from employee stock options or other
equity-based instruments.
● Other Equity decreased from ₹72,322 million to ₹72,254 million, which may indicate
dividend payouts or losses, slightly offsetting equity gains.
● Non-controlling Interests have minimal increase in non-controlling interests,
suggesting stable minority ownership in subsidiaries or joint ventures.

The slight decrease in total equity from ₹73,295 million to ₹73,232 million still reflects a
solid equity base, indicating stability in the company’s financial position despite the small
equity reduction.

Non-current Liabilities:
● Borrowings decrease from ₹12,723 million to ₹10,474 million suggests that PVR has
repaid a portion of its long-term debt, which could be seen as a move to reduce
interest obligations and improve the debt-equity ratio.
● Lease Liabilities increase from ₹57,840 million to ₹60,065 million indicates new or
renewed leases, reflecting expansion or retention of cinema locations.
● Other Financial Liabilities have small changes in provisions, deferred tax liabilities,
and other non-current liabilities, suggesting a relatively stable non-current liability
structure, with adjustments based on operational changes.

The overall decrease in total non-current liabilities from ₹70,959 million to ₹71,469 million
highlights improved long-term debt management, with a focus on reducing borrowing costs
while maintaining lease obligations for operations.

28
Current Liabilities:
● Borrowings increase from ₹5,204 million to ₹6,703 million suggests a rise in
short-term debt, possibly to finance operational activities or manage working capital
needs.
● Lease Liabilities increase from ₹4,752 million to ₹5,793 million reflects new
short-term lease obligations, aligning with the increase in right-of-use assets.
● Trade Payables and Other Financial Liabilities decrease from ₹187 million to ₹42
million and from ₹3,045 million to ₹2,128 million, respectively, indicates better
payment management and reduced short-term obligations.
● Provisions and Other Current Liabilities increase in provisions from ₹355 million to
₹459 million may reflect higher anticipated costs or contingencies, while the decrease
in other current liabilities suggests better management of current obligations.

The increase in total current liabilities from ₹20,513 million to ₹23,503 million indicates a
rise in short-term obligations, possibly to support operational activities or short-term
expansions.

The increase in total liabilities from ₹91,472 million to ₹94,972 million reflects a rise in
short-term obligations, though this is balanced by reduced long-term borrowings and a stable
equity base.

Key Highlights
● PVR has seen growth in both non-current and current assets, indicating a focus on
expanding its physical infrastructure while maintaining strong liquidity.
● The company maintains strong liquidity with increased cash and cash equivalents,
positioning it well to meet short-term obligations and take advantage of opportunities.
● The reduction in long-term borrowings shows prudent debt management, although the
increase in short-term borrowings suggests the need for working capital or short-term
financing.
● The equity base remains stable with only minimal changes, indicating a strong
financial position and the ability to weather financial fluctuations.
● While non-current liabilities have decreased, reflecting reduced debt obligations,
current liabilities have risen, indicating increased operational or short-term financing
needs.

PVR's balance sheet for the year ending March 31, 2024, shows a company that is growing
its asset base, managing its liquidity effectively, and strategically managing its debt. The
slight increase in liabilities is primarily due to short-term obligations, but the company's
overall financial position remains strong, supported by a solid equity base and ongoing
investments in its core business infrastructure.

29
CONSOLIDATED PROFIT AND LOSS- PVR INOX

The Consolidated Statement of Profit and Loss for PVR for the year ending March 31, 2024,
compared to the previous year, reveals significant improvements in the company's financial
performance. Here's a detailed analysis:
1. Income
● Revenue from Operations has a substantial increase from ₹37,506 million in 2023 to
₹61,071 million in 2024 indicating a strong rebound in business. This growth could be
attributed to several factors, including the recovery of the entertainment industry
post-pandemic, the release of blockbuster films, increased footfall in cinemas, and
potential expansion into new markets or locations.

30
 ● Other Income increased from ₹791 million to ₹1,566 million suggesting that PVR has
successfully diversified its revenue streams. This could include income from
investments, rental income from properties, or other non-operating activities.
● The overall growth in total income from ₹38,297 million to ₹62,637 million reflects a
robust recovery and expansion of PVR’s operations, indicating that the company is
regaining its pre-pandemic momentum.

2. Expenses
● Movie Exhibition Cost is increased from ₹8,184 million to ₹14,113 million reflecting
higher costs associated with showing more films or acquiring more expensive content.
This could also include costs related to the expansion of screens or higher licensing
fees for blockbuster releases.
● Consumption of Food and Beverages rose from ₹3,102 million to ₹4,994 million
aligns with the increase in revenue from operations, suggesting higher sales of food
and beverages, which are significant contributors to PVR's revenue.
● Employee Benefits Expense increase from ₹4,389 million to ₹6,573 million may be
due to hiring additional staff, wage increases, or the opening of new locations, all of
which point to business expansion.
● Finance Costs increase from ₹5,716 million to ₹5,793 million indicates stable
borrowing costs, reflecting PVR’s ability to manage its debt effectively despite
expanding operations.
● Depreciation and Amortisation Expenses have a significant jump from ₹7,533 million
to ₹12,193 million suggesting that new assets have been capitalized, possibly due to
the opening of new theatres or the acquisition of new equipment, leading to higher
depreciation charges.
● Other Operating Expenses increase from ₹11,355 million to ₹19,270 million may
include marketing costs, utility expenses, maintenance, and other operational
activities associated with expanded operations or increased footfall.

The rise in total expenses from ₹40,279 million to ₹63,076 million reflects the costs of
expanded operations. However, the increase in revenue has outpaced the rise in expenses,
indicating improved operational efficiency.

3. Loss Before Share of Non-controlling Interests, Share in Loss of Joint Venture, and
Tax
The reduction in loss from ₹(1,982) million in 2023 to ₹(439) million in 2024 is a positive
sign, demonstrating that PVR has managed to significantly reduce its losses despite the
increase in expenses. This improvement suggests better operational performance and
effective cost management.

4.Loss Before Exceptional Items, Share of Non-controlling Interests, and Tax

● The absence of exceptional items in 2024 compared to ₹108 million in 2023 indicates
that there were no significant one-time losses or gains, providing a clearer picture of
PVR’s operational performance.

31
 ● Loss Before Tax had an improvement from ₹(2,090) million in 2023 to ₹(439) million
in 2024 underscores the company’s progress in moving towards profitability, driven
by higher revenues and controlled expenses.

5. Tax Expense
● The marginal increase of current tax from ₹20 million to ₹27 million reflects a slight
rise in taxable income.
● The reduction in deferred tax credit from ₹1,254 million to ₹139 million indicates a
lower recognition of tax assets, possibly due to improved financial performance or
changes in tax provisions.
● The overall decrease in tax benefits from a credit of ₹1,274 million in 2023 to ₹112
million in 2024 reflects the company’s reduced reliance on deferred tax assets as its
profitability improves.

6. Loss After Tax

The significant reduction in net loss from ₹(3,364) million in 2023 to ₹(327) million in
2024 highlights the company’s progress towards financial recovery. This reduction is a result
of higher revenues, effective cost management, and controlled tax expenses.

7. Other Comprehensive Income / (Expense) (Net of Tax)

The decrease from ₹14 million in 2023 to ₹5 million in 2024 suggests minor changes in other
comprehensive income, possibly due to fluctuations in actuarial gains/losses on employee
benefits or changes in the fair value of investments.

8. Total Comprehensive Income / (Expense) for the Year

The improvement from ₹(3,337) million in 2023 to ₹(315) million in 2024 indicates a
substantial overall enhancement in PVR’s financial health, signaling that the company is on a
strong recovery path.

9.Net Loss for the Year

● The reduction in losses from ₹(3,351) million in 2023 to ₹(320) million in 2024 is
encouraging for shareholders, as it reflects the company’s efforts to improve
profitability.
● The relatively stable losses from ₹13 million to ₹7 million indicate consistent
performance from subsidiaries or joint ventures.

10. Earnings Per Equity Share on Net Loss After Tax

The improvement in EPS from ₹(51.6) per share in 2023 to ₹(3.3) per share in 2024 is a
positive indicator for investors, as it shows a significant reduction in per-share losses,
enhancing shareholder value.

Key Highlights and Conclusion

● PVR has experienced substantial growth in revenue, likely due to increased footfall,
the release of popular films, and expansion into new markets.

32
 ● While expenses have increased, the company has effectively managed them in line
with revenue growth, leading to a reduced loss before tax.
● The reduction in net loss and improvement in EPS suggest that PVR is on a path to
recovery and may soon achieve profitability if this trend continues.
● The company’s reduced reliance on deferred tax credits has contributed to the
improved bottom line.

PVR’s financial performance for the year ending March 31, 2024, reflects a significant
turnaround compared to 2023. The company has shown strong revenue growth, effective
expense management, and substantial reductions in net losses, signalling a positive trajectory
towards profitability. If these trends continue, PVR is well-positioned for future success,
making it a promising entity for investors and stakeholders.

33
8. FUTURE MISSION AND VISION OF PVR, PHOENIX

1. Technological Leadership: By always embracing and incorporating the most recent

developments, PVR Phoenix Market City hopes to become a leader in the movie
theatre technology space. This entails broadening its selection to include cutting-edge
immersive formats such advanced 4DX and IMAX as well as investigating
cutting-edge ideas like virtual reality (VR) experiences. The intention is to deliver
cutting-edge, unforgettable movie-watching experiences to audiences, setting new
benchmarks for the industry.
2. Diverse Programming and Content: Part of the plan is to expand the selection of films
and media available, encompassing not only international and indie films but also
major blockbusters. PVR Phoenix Marketcity wants to expand its status as a cultural
centre by presenting more film festivals, special screenings, and exclusive premieres.
These events will appeal to a diverse range of patrons.
3. Improved Customer Experience: PVR Phoenix Marketcity has made investments in
opulent extras like better seats, first-rate food and drink selections, and customised
services in an effort to improve the patron experience. The main goal will be to create
a welcoming and stimulating environment that goes above and beyond for customers
and encourages loyalty.
4. Community Engagement and Social Responsibility: The plan calls for extending CSR
efforts, such as hosting special screenings for disadvantaged audiences, holding
educational workshops, and forming alliances with neighbourhood organisations, in
order to fortify relationships with the community. PVR Phoenix Marketcity wants to
actively contribute to cultural enrichment and community development.
5. Sustainable Practices: In order to reduce its environmental effect, PVR Phoenix
Marketcity is dedicated to implementing sustainable practices. This entails putting in
place energy-saving technology, cutting waste with recycling initiatives, and
encouraging environmentally friendly business practices. The objective is to sustain
operational excellence while making a positive impact on environmental
sustainability.

34
9.ACHIEVEMENTS OF PVR

Phoenix Marketcity Pune, with its PVR multiplex, has played a vital role in the city's
entertainment scene. Here's a thorough summary of its achievements:

1. Blockbuster screenings and premieres.

PVR in Phoenix Market City Pune has held screenings of some of the biggest movies,
including Baahubali: The Conclusion and Avengers: Endgame. These films drew large
crowds, with the cinema frequently ranking among the top-grossing theatres in the region.
unique . The multiplex has held a number of unique movie premieres, providing cinephiles
with an elite experience and generating excitement around the city. Just in 10 days phoenix
was able to generate a revenue of 4 crore from Stree 2 movie showcasing that the mall is the
heart of the city.

2. Innovative Cinema Experience

Introduction to 4DX and IMAX: PVR at Phoenix Marketcity was among the first to debut
4DX and IMAX screens in Pune, offering a one-of-a-kind, immersive movie-watching
experience. This innovation drew in audiences eager to see films like never before..The
launch of PVR Gold Class adds a luxurious touch to the cinema experience by providing
recliner seats, gourmet refreshments, and personalised services to the premium audience.

3. Diverse Movie Screenings

International Film Festivals: The cinema hosts international film festivals that showcase films
from different countries and promote global cinema. In addition to Bollywood and
Hollywood, PVR Phoenix Marketcity promotes regional cinema by exhibiting Marathi,
Tamil, Telugu, and Malayalam films for Pune's diverse populace.

4. Community Engagement & Events

Special Screenings and Events: The multiplex has organised screenings for poor children,
senior persons, and non-governmental organisations (NGOs). Events like these have
strengthened the PVR’s CSR initiative. PVR has worked with a variety of brands and
organisations to host themed movie nights, corporate screenings, and educational workshops,
making it more than just a movie theatre. They have organised instagram and facebook lives,
celebrated 100 days of phoenix festival , organised electronic fest with some jaw dropping
discounts.

5. Technological advancements
Online and Mobile Ticketing: This PVR was among the first in Pune to offer seamless online
and mobile ticket booking, considerably increasing customer convenience.The advent of an
in-cinema app enabled customers to order food, check showtimes and even submit comments
using their cellphones.

6. Revenue and Footfall Milestones.

35
Top-Grossing Multiplex: For many years, PVR at Phoenix Marketcity has been one of the
top-grossing multiplexes in Pune, contributing significantly to the company's overall revenue.
The cinema has maintained excellent traffic, especially during weekends( Saturday night
being the highest traffic ) and seasonal seasons, frequently selling out shows well in advance.

7. Partnerships and Collaboration

PVR Phoenix Marketcity has formed relationships with major corporations for private
screenings and events, increasing its profile and earnings. Through collaborations with OTT
platforms and production houses, PVR has been able to stream unique content such as Netflix
debuts and live sporting events, attracting a diverse audience.

8. Award and Recognition

PVR Phoenix Market City has received multiple honors for its outstanding service,
technology, and consumer satisfaction. These include recognition for Best Multiplex and Best
Customer Experience at regional and national award ceremonies.

9. Expansion and upgrades.

Facility Upgrades: PVR has consistently renovated its facilities at Phoenix Marketcity,
including sound systems, seats, and general ambiance, ensuring that it remains a popular
choice among moviegoers. The multiplex has increased its screen count to accommodate
more moviegoers and provide a greater range of films at any given moment.

10. Contribution to Phoenix Market City's Success

PVR has been a major pull for Phoenix Marketcity, adding to the mall's total foot traffic and
success. Its presence has helped the mall establish itself as one of Pune's most popular retail
and entertainment attractions. These achievements demonstrate how PVR Phoenix
Marketcity Pune has not only excelled as a cinema, but also made major contributions to the
city's cultural and social milieu.

36
10. QUESTIONNAIRE ASKED

As part of our project to assess and comprehend a large cinema chain's internal audit controls
and operational procedures, our team visited the PVR multiplex in Phoenix Marketcity. This
visit was aimed at getting firsthand knowledge of PVR's operational operations, auditing
controls, and overall management practices in their busy cinema setting. For a thorough
assessment, we developed a structured questionnaire that probed important features of their
internal control systems. The questionnaire aims to address a variety of topics, including
financial operations, risk management, compliance processes, and job segregation.

We designed the questionnaire to elicit specific information about how PVR administers its
internal controls to ensure accuracy, integrity, and regulatory compliance. This includes
understanding how they handle transaction processing, approval methods, data security,
personnel training, and audit trail maintenance. By engaging with PVR staff through this
questionnaire, we understood how their internal audit system works in a real-world scenario.

Questionnaire prepared:

1. What are the key operational processes at the PVR multiplex?

2. What internal control framework does PVR implement at this multiplex to manage
financial and operational risks?
3. How are these internal controls tailored to the specific needs of the Phoenix
Marketcity location?
4. How are duties segregated among employees to prevent fraud and errors?
5. What measures are in place to ensure that no single employee has complete control
over financial transactions?
6. How does PVR manage regulatory reporting and documentation for this location?
7. What measures are in place to protect sensitive financial and operational data at the
Phoenix Marketcity multiplex?
8. Can you describe any recent data security incidents and the responses to those
incidents?
9. What training programs are provided to employees regarding ethics, compliance, and
internal controls?
10. What procedures are in place for evaluating control performance and identifying areas
for improvement?

Overall, the information gathered through the questionnaire significantly helped us in

completing our assignment, providing necessary insights into PVR's internal audit methods. It
enabled us to assess the effectiveness of their internal control systems, identify strengths and
areas for improvement, and make recommendations to improve their auditing and compliance
processes. This detailed research not only contributed to a complete review of PVR's internal
controls, but it also gave actionable insights that may be used to assist ongoing efforts to
improve the internal audit system.

37
GEO -TAGGED PICTURES- VISIT TO PVR MULTIPLEX, PHOENIX
MARKETCITY

As part of our project to evaluate internal audit controls and operational processes in the
movie business, our team went to the PVR multiplex in Phoenix Marketcity. This visit was a
critical component of our research, as it provided direct insight into the day-to-day operations
and internal control methods used by one of the largest cinema chains.

We scheduled an appointment in advance with Mr. Himanshu, the Manager of the PVR
multiplex, who generously agreed to meet us. During our conversation, Mr. Himanshu
provided responses to our carefully constructed questionnaire, which addressed many facets
of PVR's internal controls, risk management, compliance, and operations. His extensive
comments provided us with a better knowledge of how PVR maintains financial integrity,
complies with regulatory regulations, and controls operational efficiency in a dynamic
context like a high-traffic multiplex.

38
CONCLUSION

The audit of PVR Phoenix Market City was actually a way to integrate all of their operational
and financial practices, so as to underscore its prime role in the entertainment sector of Pune.
Our findings serve to underline the effectiveness of PVR's robust internal control systems,
innovative technological advances, and dedicated customer service that make it one of the
leaders among multiplexes. It is apparent that, through detailed risk assessment and internal
audit procedures, PVR Phoenix Market City maintains high standards of financial integrity
and operational efficiency.

The ability to carry out such continuous improvements in internal controls has to be enabled
in the multiplex, where the company has the quickest means to get hold of any discrepancy
and adapts to emerging industry dynamics, like real-time monitoring and targeted risk
management. Further, PVR ensures community involvement and investment in technological
innovation strategies to be able to maintain its vision of enhancing customer experience and
sustaining growth.

In conclusion, PVR Phoenix Marketcity is no less than an example of best practices for
cinemas in the business, with the technology use deeply rooted into excellency. This audit
confirms that not only are the internal controls of PVR effective but also they provide a
framework for ongoing enhancement and strategic development. As PVR is growing and
evolving, with its good internal audit practices, it should remain among the top stakeholders
and essential to the cultural and social geography of Pune.

39
 REFERENCES

Audio of the meeting with Manager :

https://drive.google.com/file/d/18figCKs-ovQu-_4cTCWMiiGcorEPmZjA/view?usp=dri
vesdk

https://originserver-static1-uat.pvrcinemas.com/pvrcms/quarter-report-doc/Outcome%20of%
20Board%20Meeting_Financial%20Results_31032024_23426_C9HgA3sp.pdf
https://originserver-static1-uat.pvrcinemas.com/pvrcms/financials/2022_1693979275104.09.2
023_Web.pdf
https://static1.pvrcinemas.com/pvrcms/financial/1498741143294.pdf
https://originserver-static1-uat.pvrcinemas.com/pvrcms/corporate/protectionpolicy.pdf
https://www.hindustantimes.com/gurgaon/four-including-ex-employees-of-pvr-arrested-for-c
ard-cloning/story-gj1JXqv39tQARVNQ6zly8J_amp.html

40