Dated: June 11, 2022

Registrar of Companies
ROC Bhavan, Opp Rupal Park Society, Behind Ankur Bus Stop, Naranpura
Ahmedabad-380013, Gujarat

Sub.- Complaint against M/S Pravda Media Foundation for violation of provisions of the Companies Act,
2013
Ref.- CIN U93030GJ2017NPL099435 and income tax PAN AAJCP4758N

Dear Sir,

M/S Pravda Media Foundation is incorporated under section 8 of the Companies Act, 2013 and it is
operating as a private limited company within the meaning of section 2(68) of the Act. Non compliances
related to the various provisions of the Companies Act, 2013 have come to my attention after perusal of
the public records of the company which are filed with the Ministry of Corporate Affairs. A summary of
observations is given below.

S no. Financial Observation Penal Consequences

Year
1 2017-18 FY 2017-18 was the first financial year of the
company. However, Note 1 of the financial
statements doesn’t reflect the movement in the
share capital of the company. In the disclosure
note, there should not be any opening balance in
the share capital as it was the first financial year of
the company.
This disclosure is not in compliance with the
Schedule III of the Companies Act, 2013.
Section 129(1) of the Companies Act, 2013 provides
interalia that the financial statements should
comply with the accounting standards notified
under section 133 of the Act and the financial
statements shall be prepared in the form as per
Schedule III of the Act.
Section 129(7) of the Companies Act,
2013 provides that-
If a company contravenes the
provisions of this section, the managing
director, the whole-time director in
charge of finance, the Chief Financial
Officer or any other person charged by
the Board with the duty of complying
with the requirements of this section
and in the absence of any of the officers
mentioned above, all the Directors shall
be punishable with imprisonment for a
term which may extend to one year or
with fine which shall not be less than
fifty thousand rupees but which may
extend to five lakh rupees, or with both.

Explanation.—For the purposes of this

section, except where the context
otherwise requires, any reference to the
financial statement shall include any
notes annexed to or forming part of

Page 1 of 8
 such financial statement, giving
information required to be given and
allowed to be given in the form of such
notes under this Act.]

2 2018-19 Pratik Sinha received salary from the company 1. Section 129(7) of the
which is given in the details of the expenditure Companies Act, 2013 provides
incurred towards IPS Media Foundation Project that-
Expenses. Pratik Sinha is relative [as defined u/s
2(76) read along with section 2(77) of the Act] of If a company contravenes the
Mrs. Nirjhari Sinha who is a promoter director of provisions of this section, the managing
the company. director, the whole-time director in
charge of finance, the Chief Financial
Salary paid to Pratik Sinha has not been disclosed Officer or any other person charged by
under ‘transactions with related parties’ in note the Board with the duty of complying
2(m) of the financial statements. with the requirements of this section
and in the absence of any of the officers
Accounting Standard 18 (AS-18) notified under mentioned above, all the Directors shall
section 133 of the Companies Act, 2013 prescribes be punishable with imprisonment for a
the disclosure of related party transactions and term which may extend to one year or
salary paid to Pratik Sinha should have been with fine which shall not be less than
disclosed in the financial statements. fifty thousand rupees but which may
extend to five lakh rupees, or with both.
Salary paid to Pratik Sinha is not disclosed in Form
AOC-2 of the Board of Director’s Report. Section Explanation.—For the purposes of this
134(3)(h) of the Companies Act, 2013 provides section, except where the context
that the Board of Director’s report should include otherwise requires, any reference to the
particulars of contracts or arrangements with financial statement shall include any
related parties referred to in sub-section (1) of notes annexed to or forming part of
section 188 in the prescribed form. Services such financial statement, giving
received from Pratik Sinha are covered under information required to be given and
section 188(1)(d) of the Companies Act, 2013 and allowed to be given in the form of such
therefore it should have been included in the notes under this Act.]
Board of Director’s report.

Section 129(1) of the Companies Act, 2013 provides 2. Section 134(8) of the
interalia that the financial statements should Companies Act, 2013 provides
comply with the accounting standards notified that –
under section 133 of the Act and the financial
statements shall be prepared in the form as per If a company is in default in complying
Schedule III of the Act. with the provisions of this section, the
company shall be liable to a penalty of
three lakh rupees and every officer of
the company who is in default shall be
liable to a penalty of fifty thousand
rupees.]

Page 2 of 8
3 2018-19 Accounting policy (note 2) of the company doesn’t
include policy on revenue recognition. It doesn’t
meet the disclosure requirements as per AS9 read
along with AS1 as notified under section 133 of the
Act.
Section 129(1) of the Companies Act, 2013 provides
interalia that the financial statements should
comply with the accounting standards notified
under section 133 of the Act and the financial
statements shall be prepared in the form as per
Schedule III of the Act.
Section 129(7) of the Companies Act,
2013 provides that-
If a company contravenes the
provisions of this section, the managing
director, the whole-time director in
charge of finance, the Chief Financial
Officer or any other person charged by
the Board with the duty of complying
with the requirements of this section
and in the absence of any of the officers
mentioned above, all the Directors shall
be punishable with imprisonment for a
term which may extend to one year or
with fine which shall not be less than
fifty thousand rupees but which may
extend to five lakh rupees, or with both.

Explanation.—For the purposes of this

section, except where the context
otherwise requires, any reference to the
financial statement shall include any
notes annexed to or forming part of
such financial statement, giving
information required to be given and
allowed to be given in the form of such
notes under this Act.]
4 2018-19 Section 134(6) of the Companies Act, 2013 provides Section 134(8) of the Companies Act,
that the Board’s Report shall be signed by the 2013 provides that –
Chairperson of the company (if he is authorized by If a company is in default in complying
the Board), otherwise the Board’s Report shall be with the provisions of this section, the
signed by two of the directors, out of which one company shall be liable to a penalty of
shall be managing director. three lakh rupees and every officer of
the company who is in default shall be
Board’s Report for FY 2018-19 has been signed by liable to a penalty of fifty thousand
only one director. rupees.]
5 2019-20 Note 2(g) in the financial statement related to Section 129(7) of the Companies Act,
policy on revenue recognition doesn’t provide the 2013 provides that-
required disclosures as mandated by accounting
standard notified under section 133 of the Act. [AS- If a company contravenes the
9 : Revenue Recognition]. Merely mentioning that provisions of this section, the managing
revenue is accounted for on accruals as it is earned, director, the whole-time director in
except in case of significant uncertainties doesn’t charge of finance, the Chief Financial
meet the disclosure requirements as per AS9 read Officer or any other person charged by
along with AS1 as notified under section 133 of the the Board with the duty of complying
Act. with the requirements of this section
and in the absence of any of the officers
mentioned above, all the Directors shall

Page 3 of 8
 Section 129(1) of the Companies Act, 2013 provides
interalia that the financial statements should
comply with the accounting standards notified
under section 133 of the Act and the financial
statements shall be prepared in the form as per
Schedule III of the Act.
6 2019-20 Company received Rs. 100 lakhs as grant from M/S
IPSMF in FY 2018-19. Out of it, Rs. 5,176,761 was
spent during the year and remaining amount of Rs.
4,823,239 was shown as a liability in note of the
financial statements for FY 2018-19.
In the next year, company spent only Rs. 4,695,980
out of the unspent amount and the remaining
balance of 127,259 was transferred as capital
expenditure grant and disclosed in note 3 of the
financial statements.
Section 73 of the Companies Act, 2013 read along
with Rule 2(c)(xii)(a) of the Acceptance of Deposit
Rules, 2014 prescribes that any advance received
towards supply of goods or services shall be
deemed as deposit if the advance is not
appropriated within 365 days.
In the present situation, unappropriated amount
which had become a ‘deposit’ within the meaning
of the Act has been transferred as capital
expenditure grant. This amount has not been
shown as deposit in the Form DPT3 filed with the
ROC.
For a perspective it may be noted that showing the
unspent advance amount under a different heading
clearly shows that the officers of the company were
aware about the consequences of their deeds and
therefore they transferred this amount knowingly
and wilfully.
Page 4 of 8
be punishable with imprisonment for a
term which may extend to one year or
with fine which shall not be less than
fifty thousand rupees but which may
extend to five lakh rupees, or with both.
Explanation.—For the purposes of this
section, except where the context
otherwise requires, any reference to the
financial statement shall include any
notes annexed to or forming part of
such financial statement, giving
information required to be given and
allowed to be given in the form of such
notes under this Act.]
Section 76A of the Companies Act, 2013
provides for penal consequences
related to non-compliance of the
provisions of Chapter V of the Act.
76A. Where a company accepts or
invites or allows or causes any other
person to accept or invite on its behalf
any deposit in contravention of the
manner or the conditions prescribed
under section 73 or section 76 or rules
made thereunder or if a company fails
to repay the deposit or part thereof or
any interest due thereon within the
time specified under section 73 or
section 76 or rules made thereunder or
such further time as may be allowed by
the Tribunal under section 73,—
(a) the company shall, in addition to the
payment of the amount of deposit or
part thereof and the interest due, be
punishable with fine which shall not be
less than 2[one crore rupees or twice
the amount of deposit accepted by the
company, whichever is lower] rupees
but which may extend to ten crore
rupees; and
(b) every officer of the company who is
in default shall be punishable with
imprisonment which may extend to
3[seven years and with fine] which shall
 not be less than twenty-five lakh rupees
but which may extend to two crore
rupees, 4[Omitted]:

Provided that if it is proved that the

officer of the company who is in default,
has contravened such provisions
knowingly or wilfully with the intention
to deceive the company or its
shareholders or depositors or creditors
or tax authorities, he shall be liable for
action under section 447.]
7 2019-20 As per Form DIR-12 filed by the company, Section 129(7) of the Companies Act,
Mohammed Zubair holding DIN 08649777 was 2013 provides that-
appointed as a director of the company w.e.f. 16
December 2019. He was identified as a promoter in If a company contravenes the
the said Form. provisions of this section, the managing
director, the whole-time director in
Company paid salary to Mohammed Zubair during charge of finance, the Chief Financial
the financial year which can be corroborated from Officer or any other person charged by
the grouping schedule. However, salary paid to the Board with the duty of complying
director has not been disclosed in the transactions with the requirements of this section
with related parties under Note 1(m) of the and in the absence of any of the officers
financial statements. mentioned above, all the Directors shall
be punishable with imprisonment for a
Accounting Standard 18 (AS-18) notified under term which may extend to one year or
section 133 of the Companies Act, 2013 prescribes with fine which shall not be less than
the disclosure of related party transactions and fifty thousand rupees but which may
salary paid to Mohammed Zubair should have extend to five lakh rupees, or with both.
been disclosed in the financial statements.
Explanation.—For the purposes of this
Section 129(1) of the Companies Act, 2013 section, except where the context
provides interalia that the financial statements otherwise requires, any reference to the
should comply with the accounting standards financial statement shall include any
notified under section 133 of the Act and the notes annexed to or forming part of such
financial statements shall be prepared in the form financial statement, giving information
as per Schedule III of the Act. required to be given and allowed to be
given in the form of such notes under
this Act.]
8 2019-20 As per Form DIR-12 filed by the company, No specific penalty has been prescribed
Mohammed Zubair holding DIN 08649777 was u/s 92 for incorrect reporting in the
appointed as a director of the company w.e.f. 16 annual return.
December 2019. He was identified as a promoter in
the said Form. Section 450 of the Companies Act, 2013
deals with the situation where no
Salary paid to Mohammed Zubair is not disclosed in specific penalty or punishment is
section X of the annual return (Form MGT-7) for FY provided.
2019-20.

Page 5 of 8
 If a company or any officer of a
Section 92 of the Companies Act, 2013 requires company or any other person
every company to file its annual return in the contravenes any of the provisions of
prescribed form (i.e., MGT-7). this Act or the rules made thereunder,
or any condition, limitation or
restriction subject to which any
approval, sanction, consent,
confirmation, recognition, direction or
exemption in relation to any matter has
been accorded, given or granted, and
for which no penalty or punishment is
provided elsewhere in this Act, the
company and every officer of the
company who is in default or such other
person shall be 1[liable to a penalty of
ten thousand rupees, and in case of
continuing contravention, with a
further penalty of one thousand rupees
for each day after the first during which
the contravention continues, subject to
a maximum of two lakh rupees in case
of a company and fifty thousand rupees
in case of an officer who is in default or
any other person]
9 2019-20 As per Form DIR-12 filed by the company, Section 450 of the Companies Act, 2013
Mohammed Zubair holding DIN 08649777 was deals with the situation where no
appointed as a director of the company w.e.f. 16 specific penalty or punishment is
December 2019. He was identified as a promoter in provided.
the said Form.
If a company or any officer of a
However, as per annual return filed by the company company or any other person
in Form MGT-7, there are only 2 promoters in the contravenes any of the provisions of
company. It may be noted that Mrs. Nirjhari Sinha this Act or the rules made thereunder,
and Mr. Murlidhar Pokardas Deomurari are or any condition, limitation or
signatory of the memorandum of association of the restriction subject to which any
company and identified as promoter. These two approval, sanction, consent,
individuals are also shareholders of the company. confirmation, recognition, direction or
exemption in relation to any matter has
In this situation, either details filed in DIR-12 been accorded, given or granted, and
related to appointment of Mohammed Zubair in for which no penalty or punishment is
which he is identified as promoter is incorrect, or provided elsewhere in this Act, the
the annual return filed by the company is incorrect. company and every officer of the
company who is in default or such other
person shall be 1[liable to a penalty of
ten thousand rupees, and in case of
continuing contravention, with a
further penalty of one thousand rupees
for each day after the first during which

Page 6 of 8
 the contravention continues, subject to
a maximum of two lakh rupees in case
of a company and fifty thousand rupees
in case of an officer who is in default or
any other person]
10 2020-21 Section 134(6) of the Companies Act, 2013 provides Section 134(8) of the Companies Act,
that the Board’s Report shall be signed by the 2013 provides that –
Chairperson of the company (if he is authorized by
the Board), otherwise the Board’s Report shall be If a company is in default in complying
signed by two of the directors, out of which one with the provisions of this section, the
shall be managing director. company shall be liable to a penalty of
three lakh rupees and every officer of
Board’s Report for FY 2020-21 has been signed by the company who is in default shall be
only one director. liable to a penalty of fifty thousand
rupees.]
11 2018-19 Note 4 in the financial statements for FY 2018-19 The situation gives rise to the following
and 2019- shows Rs. 1,000,000 under current liabilities as non-compliances:
20 unutilized grant from Infosys.
1. Company has violated the
Note 9 in the financial statements for FY 2019-20 provision of its MOA by
discloses this amount of Rs. 1,000,000 as grant engaging in commercial
income from Infosys Foundation. activity. The entity is licenses
u/s 8 of the Companies Act,
However, financial disclosures of Infosys 2013 and sub-section 11 of
Foundation which are part of the Infosys Ltd. section 8 provides for the penal
annual report doesn’t mention any amount paid to consequences in this case.
M/S Pravda Media Foundation. Complete details of
financial outlay of Infosys Foundation are given in Section 8(11)- If a company makes any
the said annual report and therefore Rs. 1,000,000 default in complying with any of the
which is shown as grant by the M/S Pravda Media requirements laid down in this section,
Foundation should have been included here. the company shall, without prejudice to
any other action under the provisions of
Infosys Ltd. annual report can be accessed on the this section, be punishable with fine
links given below: which shall not be less than ten lakh
1. FY 2018-19: rupees but which may extend to one
https://www.infosys.com/investors/report crore rupees and the Directors and
s-filings/annual- every officer of the company who is in
report/annual/documents/infosys-ar- default shall be punishable with fine
19.pdf which shall not be less than twenty-five
Refer Annexure 7 of the annual report on thousand rupees but which may extend
page 74 to page 76 for details of amount to twenty-five lakh rupees:
spent by Infosys Foundation under CSR
activities. Provided that when it is proved that the
affairs of the company were conducted
2. FY 2019-20: fraudulently, every officer in default
https://www.infosys.com/investors/report shall be liable for action under section
s-filings/annual- 447.

Page 7 of 8
 report/annual/documents/infosys-ar-
20.pdf
Refer Annexure 7 of the annual report on
page 72 to page 74 for details of amount
spent by Infosys Foundation under CSR
activities.
Since the amount shown as grant from Infosys
Foundation is not corroborated from the
disclosures made by the donor (i.e., Infosys
Foundation), it gives an understanding that M/S
Pravda Media Foundation has entered into some
business transaction with the Infosys Foundation.
M/S Pravda Media Foundation is incorporated
under section 8 of the Companies Act, 2013. Clause
3A of the Memorandum of Association (MOA) of
the company states that no objects of the company
shall be carried on commercial basis. The company
has been granted registration u/s 12A of the
Income Tax Act, 1961 and thereby exempted from
paying income tax on its income. Donations made
to the company are also eligible for deduction u/s
80G of the Income Tax Act, 1961 vide exemption
order no. ITBA/EXM/S/80G/2018-
19/1015391715(1) dated 22 March 2019.
It may be noted that the income tax
exemption to M/S Pravda Media
Foundation is dependent on its status as
a company licensed under section 8 of
the Companies Act, 2013. If the
company violates the provision of its
MOA by engaging in commercial
activity, then its status will get changed
from a non-profit entity to an entity
which has been set-up for the purpose
of earning profit. In this situation, apart
from other penal provisions under the
Income Tax Act, 1961, M/S Pravda
Media Foundation will lose its income
tax exemption and the company will be
liable to pay taxes in its income.

Request you to please look into the matter and take appropriate action as per the applicable legal
provisions. In case you come across any violation which impacts the legal status of the company then
necessary information can be shared with the income tax department also as the company is enjoying a
tax-free status by virtue of registration u/s 12AA of the Income Tax Act, 1961.

I will be in touch with your office and please let me know in case any further details are required on the
issues mentioned above.

Yours sincerely,

Shshank Saurav

Mail ID – shshanksaurav@gmail.com
Address – 5/162, Palm Olympia, Gaur City, Greater Noida West, UP – 201318

Copy to: 1. Secretary, Ministry of Corporate Affairs

Page 8 of 8