Parsvnath Developers Ltd.
|BSE: 532780||Sector: Infrastructure|
|NSE: PARSVNATH||ISIN Code: INE561H01026|
|BSE LIVE 15:40 | 17 Nov||23.70||
|NSE 15:31 | 17 Nov||23.55||
|Mkt Cap.(Rs cr)||1,031|
|Mkt Cap.(Rs cr)||1031.38|
Parsvnath Developers Ltd. (PARSVNATH) - Director Report
Company director report
Your Directors have pleasure in presenting the 25th Annual Report togetherwith the Audited Financial Statements of the Company for the financial year ended March312016.
1. FINANCIAL RESULTS
In view of loss (before Tax) incurred during the financial year ended March 312016coupled with constrained liquidity position of the Company your Directors have notrecommended any dividend.
3. REVIEW OF OPERATIONS
During the year under review on consolidated basis your Company:
Has earned a total revenue of? 42725.14 lacs as against ' 77987.67 lacs inFiscal Year 2014-2015.
Has incurred a net loss of? 3556.66 as against a net loss of ? 10766.27 lacsin Fiscal Year 2014-2015.
Earnings per Share (EPS) of the Company stood at ? 0.11 on stand-alone basis and ?-0.82 on consolidated basis in Fiscal 2015-2016.
A detailed business-wise review of the operations of the Company is included in theManagement Discussion and Analysis section of this Annual Report.
4. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forming part of Board's Report for theyear under review as stipulated under Regulation 34 (2) (e) of SEBI (Listing Obligationsand Disclosure Requirements) 2015 ("Listing Regulations") is discussed in aseparate section of this Annual Report.
5. SUBSIDIARIES JOINT VENTURE ENTITIES AND ASSOCIATE COMPANIES
At the beginning of the year your Company had fifteen subsidiary companies. Theproject-specific or sector-specific subsidiary companies ensure maximum utilization ofavailable resources through focused attention on specific activities.
Subsequent to year under review:
Parsvnath Estate Developers Pvt. Ltd. subsidiary company has become whollyowned subsidiary of the Company consequent upon the acquisition of 1225000 Class Bequity shares held by the overseas investors with effect from May 24 2016.
Parsvnath Realty Ventures Ltd. has become wholly owned subsidiary of theCompany consequent upon the acquisition of 50000 equity shares with effect from July16 2016.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013("Act") a statement containing brief financial details of the Company'ssubsidiaries associate companies and joint ventures for the financial year ended March312016 in Form AOC-1 is attached to the financial statements of the Company.
Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany including consolidated financial statements alongwith relevant documents andseparate audited accounts in respect of its subsidiary companies are available on thewebsite of the Company. The annual accounts of these subsidiaries and the related detailedinformation will be made available to any Shareholder of the Company/its subsidiariesseeking such information at any point of time and will also be kept open for inspection byany Shareholder of the Company/its subsidiaries at the registered office of the Companyand that of the respective companies between 11.00 a.m. and 1.00 p.m. on all working days.The Company shall furnish a copy of detailed annual accounts of such subsidiaries to anyShareholder on demand.
6. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of the Act Listing Regulations and AccountingStandard (AS) - 21 on Consolidated Financial Statements AS - 23 on Accounting forInvestments in Associates and AS - 27 on Financial Reporting of Interests in JointVentures the audited consolidated financial statements are provided in the Annual Report.These
financial statements disclose the assets liabilities income expenses and otherdetails of the Company its subsidiaries joint venture and associate companies.
During the year under review the Company has fully redeemed Series XII & XIIIsecured freely transferable and NonConvertible Debentures (NCDs) aggregating to ' 2571.43lacs.
8. FIXED DEPOSITS
During the year under review the Company has not accepted fixed deposits from thepublic.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 149 of the Act Ms. Deepa Gupta and Shri MahendraNath Verma were appointed as Independent Directors at the Annual General Meeting of theCompany for a term of 5 (five) consecutive years with effect from March 30 2015 and May25 2015 respectively. The terms and conditions of appointment of Independent Directorsare as per Schedule IV to the Act. Further Shri Ramdas Janardhana Kamath has resignedfrom the Board of Directors of the Company with effect from August 5 2015.
The Independent Directors have submitted a declaration that each of them meets thecriteria of independence as provided in Section 149(6) of the Act and there has been nochange in the circumstances which may affect their status as Independent Directors duringthe year.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
In accordance with the applicable provisions of the Act read with the Articles ofAssociation of the Company Mr. Sanjeev Kumar Jain (DIN: 00333881) Director of theCompany will retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
Pursuant to the provisions of Sections 196 197 198 of the Act and the Rules madethereunder Shri Pradeep Kumar Jain Whole-time Director designated as Chairman ShriSanjeev Kumar Jain Managing Director & CEO Dr. Rajeev Jain Wholetime Directordesignated as Director (Marketing) have been re-appointed with effect from March 1 2016to March 31 2019 subject to the approval of members of the Company at the ensuing AnnualGeneral Meeting.
Your Company has received annual declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of Independence provided in Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and there has been no change in the
circumstances which may affect their status as Independent Director during the year.
The Notice convening the ensuing Annual General Meeting includes the proposal forappointment/ re-appointment of the Directors. Brief Resumes of the Directors proposed tobe appointed/ re- appointed as required under the Listing Regulations and SecretarialStandards on General Meetings are furnished in the explanatory statement to the Noticeconvening the ensuing Annual General Meeting.
10. BOARD COMMITTEES
During the year under review the Board of Directors has reconstituted the AuditCommittee CSR Committee and the Nomination and Remuneration Committee as mentioned below:
As on March 312016 the Audit Committee comprised of Shri Mahendra Nath Verma(Chairman) Shri Sanjeev Kumar Jain Shri Ashok Kumar Dr. Pritam Singh and Ms. DeepaGupta. All members except Shri Sanjeev Kumar Jain are Non-Executive Independent Directorsof the Company.
The CSR Committee comprises five directors including two Executive Directors viz. ShriPradeep Kumar Jain and Shri Sanjeev Kumar Jain and three Non-Executive IndependentDirectors viz. Shri Ashok Kumar who is also the Chairman of the Committee Ms. DeepaGupta and Shri Mahendra Nath Verma.
Nomination and Remuneration Committee
As on March 31 2016 the Committee comprised of Dr. Pritam Singh (Chairman) ShriAshok Kumar and Shri Mahendra Nath Verma all being Non-Executive Independent Directors.
Stakeholders Relationship Committee
As on March 31 2016 the Committee comprised of Shri Ashok Kumar Non-ExecutiveIndependent Director (Chairman) Shri Sanjeev Kumar Jain and Dr. Rajeev Jain.
A detailed note on the Committees of the Board of Directors is given in the CorporateGovernance Report forming part of the Annual Report.
11. NUMBER OF MEETINGS OF THE BOARD
Nine meetings of the Board of Directors were held during the year. For details of themeetings of the Board please refer to the Corporate Governance Report which forms partof this Report.
12. BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performance andthat of its committees and individual Directors pursuant to the provisions of the Actbased on the criteria recommended by the Nomination and Remuneration Committee. Regulation17 (10) read with Schedule II to Listing Regulations and Schedule IV to the Act providesthat the performance evaluation of the Independent Directors shall be done by the entireBoard excluding the director being evaluated on the criteria formulated by the saidCommittee.
A separate meeting of the Independent Directors was held inter-alia to review theperformance of non-independent directors and the board as a whole review the performanceof the Chairperson of the Company taking into account the views of executive directorsand non-executive directors and to assess the quality quantity and timeliness of flow ofinformation between the company's management and the Board that is necessary for theBoard to effectively and reasonably perform its duties.
13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Nomination and Remuneration Policy recommended by the Nomination and RemunerationCommittee duly approved by the Board of Directors of the Company is attached as AnnexureI.
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are postedon the website of the Company at the link: http://
14. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 ('Act') theBoard of Directors to the best of their knowledge and ability state that:
a) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312016 and the profit andloss of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern' basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews of the management and the relevant Board Committeesincluding the Audit Committee the Board is of the opinion that the Company's internalfinancial controls were adequate and effective during the financial year 2015-16.
15. CORPORATE SOCIAL RESPONSIBILITY
A brief outline of the Corporate Social Responsibility (CSR) Policy of the Company isset out in Annexure II of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The Company's CSR policy isavailable on the Company's web site at link:
16. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Also the Company has obtained prior omnibus approval for Related PartyTransactions occurred during the year for transactions which are of repetitive nature and/ or entered in the ordinary course of business and are at arm's Length.
The Company in its ordinary course of business extends financial assistance to itssubsidiary companies including wholly owned subsidiary companies for their principalbusiness activities. To support the wholly owned subsidiary companies (whose accounts areconsolidated with the Company and placed before the shareholders at the general meetingfor approval) during their long gestation period of projects at the request of suchwholly owned subsidiary companies the Company provides loans without charging
any interest. Such contracts and arrangements with wholly owned subsidiary companies donot fall into any category of contracts or arrangements envisaged under Section 188 of theCompanies Act 2013.
During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material under Section 188 ofthe Companies Act 2013.
In view of the above the requirement of giving particulars of contracts / arrangementsmade with related parties in Form AOC-2 are not applicable for the year under review.
The Policy for determination of materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on the Company'swebsite at the link: http://www.parsvnath.com/investors/information-under-listing-regulations/related-party- transaction-policy/
Your Directors draw attention of the members to Note No. 59 to the financial statementswhich set out related party disclosures.
17. INTERNAL FINANCIAL CONTROL AND INTERNAL AUDIT
The Company has in place adequate internal financial controls with reference to thefinancial statements. The Audit Committee of the Board periodically reviews the internalcontrol systems with the management Internal Auditors and Statutory Auditors and theadequacy of internal audit function significant internal audit findings and follow-upsthereon.
18. AUDIT COMMITTEE RECOMMENDATIONS
During the period under review the suggestions put forth by the Audit Committee wereduly considered and accepted by the Board of Directors. There were no instances ofnonacceptance of such recommendations.
(a) Statutory Auditors
M/s Deloitte Haskins & Sells (Deloitte) Chartered Accountants (Firm RegistrationNo. 015125N) Statutory Auditors of the Company shall retire at the conclusion of theensuing Annual General Meeting (AGM) and has informed the Company that they do not wish tobe reappointed as the Statutory Auditors of the Company in view of the rotation policyunder the Companies Act 2013. Pursuant to the provisions of Section 139 141142 andother applicable provisions of the Companies Act 2013 if any and the Companies (Auditand Auditors) Rules 2014 it is proposed to appoint M/s S. N. Dhawan & CompanyChartered Accountants (Firm Registration No. 000050N) as Statutory Auditors of the Company
from the conclusion of this 25th Annual General Meeting for term of fiveconsecutive years till conclusion of the 30th Annual General (subject toratification of the appointment by the members at every Annual General Meeting held afterthis Annual General Meeting).
As required under Section 139 of the Act the Company has obtained a written consentfrom M/s S.N. Dhawan & Company Chartered Accountants to such appointment and also acertificate to the effect that their appointment if made would be in accordance withSection 139(1) of the Act and the Rules made thereunder as may be applicable.
Statutory Auditors Report
There are no qualifications reservations or adverse remarks in the Auditors' Report onthe Stand-alone and Consolidated Financial Statements of the Company for the financialyear ended March 312016.
The Auditors in their report to the Members have made certain observations in clauses(vii)(a) (viii) & (xi) of the Annexure referred to in their Report on the StandaloneFinancial Statements in respect of delay in deposit of statutory liabilities to theappropriate authorities delay in payment of principal and interest on borrowings andpayment of Managerial Remuneration and the response of your Directors is given below underpoint no. (b).
(b) Secretarial Auditors and Secretarial Audit Report
The Board of Directors of the Company has appointed M/s Chandrasekaran AssociatesCompany Secretaries to conduct the Secretarial Audit of the Company for the FinancialYear 2016-17. The Secretarial Audit Report for the financial year ended March 31 2016 isannexed herewith as Annexure III to this Report. The Secretarial Auditors in theirreport have made certain observations and the response of your Directors is as follows:
1. Managerial remuneration of ' 85.56 lacs was paid by the Company during the year inexcess of the limits specified in the Companies Act 2013 subject to approval of the sameby the Central Government. The Company had filed applications for approvals in respectthereof with the Ministry of Corporate Affairs Government of India after obtaining therequisite shareholders' approval. The Ministry of Corporate Affairs vide its letters dated10 May 2016 rejected the Company's applications for the current year and also for anamount of ' 255.00 lacs paid in the previous year. The Company has reversed/ adjustedmanagerial remuneration of the current year and ' 255.00 lacs pertaining to the previousyear ended 31 March 2015 and accordingly
amounts paid to directors of ' 340.56 lacs are shown as recoverable from directorsunder the head 'Short-term loans and advances' in Note 19 to the financial statements.
2. The delays caused in making timely payment of principal and interest on itsborrowings and discharge of its statutory liabilities have been due to continued recessionin the real estate industry owing to slowdown in demand. The Company is also facing lackof adequate sources of finance to fund development of its ongoing projects resulting indelayed realisations from its customers and lower availability of funds to discharge itsliabilities. However there were no undisputed statutory dues of the Company which wereoutstanding for more than six months since they became due. The Company is exploringalternative sources of finance including sale of non-core assets to generate adequatecash inflows for meeting these obligations and to overcome this liquidity crunch.
(c) Internal Auditors
The Board of Directors of your Company has re-appointed M/s. P. Jain & CompanyChartered Accountants (Firm Registration No. 000711C) as Internal Auditors pursuant tothe provisions of Section 138 of the Companies Act 2013 for the financial year 2016-17.
(d) Cost Auditors
The Company has appointed M/s Chandra Wadhwa & Company Cost Accountants (FirmRegistration No. 000239) as Cost Auditors for conducting the audit of cost records of theCompany for the Financial Year 2016-17.
20. CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the Board's Report and theCertificate from M/s Chandrasekaran Associates practicing company secretary confirmingcompliance with the Corporate Governance norms as prescribed under Regulation 34 of theListing Regulations are included in the Annual Report.
Code of Conduct
The Board of Directors has laid down a Code of Conduct for Board Members and SeniorManagement Personnel. The said Code has been posted on the Company's website www.parsvnath.com. As prescribed under Listing Regulations a declaration signed by theManaging Director & CEO affirming compliance with the aforesaid Code of Conduct by theDirectors and Senior Management Personnel of the Company for the financial year 2015-16 isannexed and forms part of Corporate Governance Report.
21. LISTING WITH STOCK EXCHANGES
During the year under review the equity shares of the Company continue to remainlisted with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Thelisting fee for the financial year 2016-17 has been paid by the Company to both NSE andBSE.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said Regulations were madeeffective from December 1 2015. Accordingly all listed entities were required to enterinto a fresh Listing Agreement within six months from the effective date. The Company dulyexecuted fresh Listing Agreements with National Stock Exchange of India Limited and BSELimited in compliance with the aforesaid requirement.
22. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has during the year under review transferred a sum of ' 2358231 (RupeesTwenty Three lac Fifty Eight Thousand Two Hundred Thirty one only) to Investor Educationand Protection Fund (IEPF) established by the Central Government in compliance with theprovisions of Section 205C of the Companies Act 1956. The said amount represents theamount of dividend declared by the Company for Financial Year 2007-08 which remainedunclaimed by the members of the Company for a period exceeding 7 years from its due dateof payment.
1. Conservation of energy technology absorption foreign exchange earnings and outgo
The nature of operations of the Company does not require disclosure of particularsrelating to conservation of energy and technology absorption as prescribed under Section134(3)(m) of the Act read with the Rule 8(3) of the Companies (Accounts) Rules 2014.During the year under review the Company has nil foreign exchange earnings and hasincurred expenditure of ' 21.02 Lacs as compared to ' 182.51 Lacs in the previous year.
2. Particulars of Employees
The information required under Section 197 of the Act read with the Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company as on March 312016:
b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year: Nil
c. The percentage increase in the median remuneration of employees in the financialyear: Nil
d. The number of permanent employees on the rolls of Company as on March 312016: 549
e. The explanation on the relationship between average increase in remuneration andCompany Performance: There was no increase in remuneration of employees of the Company ingeneral during Financial Year ended March 312016.
f. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Nil
g. Affirmation that the remuneration is as per the remuneration policy of the Company:The Company affirms that remuneration is as per the remuneration policy of the Company.
h. As per Section 197(12) of the Act read with the Rule 5 of the Companies (Appointmentof Managerial Personnel) Rules 2014 details of employees drawing a remuneration of morethan ' 102 lakh per annum if employed throughout the financial year and ' 8.5 lakh permonth if employed for part of the financial year need to be set out as annexure to thisReport. However none of the employees come under the purview of this section and hencethe said provisions are not applicable. Further as per MCA notification dated June 302016 list of top ten employees of the Company is annexed herewith as Annexure IV.
3. Particulars of loans guarantees or investments under Section 186 of the CompaniesAct 2013 ("Act")
As your Company is engaged in the business of real estate development included in theterm Infrastructural projects/facilities under Schedule VI to the Act the provisions ofSection 186 of the Act related to loans made guarantees given or securities provided arenot applicable to the Company. However the details of the same are provided in thestandalone financial statements.
4. Extract of Annual Return
Extract of Annual Return in the Form MGT-9 as required under Section 92 of the Act isannexed herewith as Annexure V to this Report.
24. RISK MANAGEMENT
During the year your Directors have approved a Risk Management Policy to assist theBoard in:
(a) Overseeing and approving the Company's enterprise wide risk management framework;
(b) Overseeing that all the risks that the organization faces such as strategicfinancial credit market liquidity security property IT legal regulatoryreputational and other risks have been identified and assessed and there is an adequaterisk management infrastructure in place capable of addressing those risks.
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organisational structures processes standards code of conduct etc. governs howthe Company conducts its business and manages associated risks.
The Board periodically reviews implementation and monitoring of the risk managementplan for the Company including identification therein of elements of risks if any whichin the opinion of the Board may threaten the existence of the Company.
25. VIGIL MECHANISM
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy forDirectors and employees to report genuine concerns in the prescribed manner in terms ofthe Listing Regulations. The Vigil Mechanism is overseen by the Audit Committee andprovides adequate safeguards against victimization of employees and Directors. WhistleBlower Policy is a mechanism to address any complaint(s) related to fraudulenttransactions or reporting intentional non-compliance with the Company's policies andprocedures and any other questionable accounting/operational process followed. It providesa mechanism for employees to approach the Chairman of the Audit Committee or Shri V.Mohan Sr. Vice President (Legal) & Company Secretary designated as Whistle and EthicsOfficer under the aforesaid mechanism. During the year no such incidents were reportedand no personnel were denied access to the Chairman of the Audit Committee. The Policy onVigil Mechanism and Whistle Blower Policy may be accessed on the Company's website at thelink:
Your Directors state that no disclosure or reporting is required
in respect of the following items as there were no transactions
on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled/ reported pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Your Directors wish to place on record their sincere gratitude to the shareholderscustomers bankers financial institutions investors vendors and all other businessassociates for the continuous support provided by them to the Company and for theconfidence in the management of the Company. Your Directors wish to appreciate theconfidence reposed by the foreign investors in the Company by inducting funds forimplementation of various ongoing projects of the Company through investment in our SPVCompanies.
The Directors also wish to acknowledge the contribution made by employees at all levelsfor steering the growth of the organisation. Your Directors also thank the Government ofIndia the State Governments and other Government Agencies for their assistance andco-operation and look forward to their continued support in future.
On behalf of the Board of Directors