PSP Projects Ltd.
|BSE: 540544||Sector: Infrastructure|
|NSE: PSPPROJECT||ISIN Code: INE488V01015|
|BSE 10:14 | 23 Feb||482.00||
|NSE 10:25 | 23 Feb||482.00||
|Mkt Cap.(Rs cr)||1,735|
|Mkt Cap.(Rs cr)||1735.20|
PSP Projects Ltd. (PSPPROJECT) - Director Report
Company director report
The Members of PSP Projects Limited
Your Directors have pleasure in presenting the 9th Annual Report of yourCompany along with the standalone and consolidated summary financial statements for theyear ended March 31 2017. Consolidated performances of the Company and its subsidiarieshave been referred to wherever required.
1. FINANCIAL RESULTS
(' In Lakhs)
2. INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA) vide its notification in the official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain classes of companies. Ind AS has replaced the existing Indian GAAP prescribedunder Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014. For Your Company Ind AS is applicable from April 01 2017.
3. OVERVIEW OF COMPANY PERFORMANCE
Your Company registered a de-growth of 12.49% in revenue from operation to '40075.73lakhs in Fiscal 2017 as compared to '45797.65 lakhs in Fiscal 2016 due to exclusion ofmajor material value from total contract value in certain projects. Though company hasachieved other income '1320 lakhs 28.57% higher from ' 1026.71 lakhs in the previousyear. The company has made profit before tax of ' 6393.79 lakhs on standalone basis forthe year as compared to '3940.21 lakhs for the previous year registering an increase of62.27%.
There has been no change in the nature of business of the company during the year underreview.
Your company has successfully listed itself on BSE Limited (BSE) and National StockExchange of India Limited (NSE) on May 29 2017 and raised '1512 Million through freshissue of 7.2 Million equity shares and ' 604.80 Million through offer for sale of 2.88Millions equity shares by Mr. Prahaladbhai S. Patel Mrs. Shilpaben Patel Ms. PoojaPatel and Mr. Sagar Patel. The proceeds from fresh issue will be mainly utilized forfunding working capital and capital expenditure requirement.
Your company made issue in terms of Regulation 26(2) of the SEBI (ICDR Regulationswherein atleast 75% and 15% of the issue was allocated on a proportionate basis to QIBsand Non-Institutional Investors respectively and 10% of issue was allocated to RetailIndividual Investor.
The Board of Directors in its meeting held on June 19 2017 has recommended a finaldividend of ' 2.50/- (that is 25%) per equity share of ' 10/- each for the financial yearended March 31 2017 amounting to ' 108321925/- (inclusive
of dividend distribution tax of ' 1.83 Crore). The dividend payment is subjectto approval of members at the ensuing General Meeting.
(ii) Transfer to Reserves:
Your Company does not propose to transfer any portion of profits to Reserves.
(iii) Transfer of unclaimed dividend to investor education and protection fund:
Since there was no unpaid/unclaimed Dividend declared and paid last year the provisionof section 125 of the Companies Act 2013 do not apply.
(iv) Public Deposits:
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
5. SHARE CAPITAL
During the year under review The Authorised Share Capital of the Company has beenincreased from ' 5 Crore to ' 50 Crore by creation of additional 45000000equity shares of ' 10/- each vide shareholders resolution dated September 16 2016.
Further During the year under review the Company has also allotted eight (8) bonusequity shares of ' 10/- each for every one existing equity share of ' 10/-each held i.e. in the ratio of 8:1 vide shareholders resolution dated September 28 2016by capitalizing 256000000 from the credit of Reserves and surplus of the Company.
The movement in Authorised Share Capital is as follows:
6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND DATE OF THE REPORT
The following commitments material changes occurred subsequent to close of thefinancial year and the date of this report:
Your Company successfully came out with its initial public offer (IPO) andraised ' 1512 Million by way of fresh issue of equity shares and ' 604.80Million through offer for sale (OFS). The paid up equity capital of the company as on dateis ' 360000000/-.
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scripcode No. 540544 and on the National Stock Exchange of India Limited (NSE) with SymbolPSPPROJECT. The company confirms that the annual listing fees to both the stock exchangesfor the financial year 2017-18 have been paid.
Your Company has been given credit rating for Bank facilities for ' 180Crore by CARE Rating Limited- the Credit Rating Agency.
7. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR TRIBUNALS
There are no significant material order passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperation. However Members attention is drawn to the Statement on Contingent Liabilitiesand commitments in the notes forming part of the Financial Statements.
8. SUBSIDIARY/ JOINT VENTURE AND ASSOCIATES
As on 31st March 2017 Your Company has two subsidiaries one step-downJoint Venture and One Joint venture. As required under the provisions of Section 129 ofthe Companies Act 2013 read with Companies (Accounts) Rules 2013 a statement
containing salient features of the financial statements of subsidiaries Joint Ventureand Associates are provided in the prescribed format AOC-1 as Annexure-A of theBoard Report.
Your Company has one 100% subsidiary in the state of Texas (USA) PSP Projects Inc.Which makes investment in joint ventures/partnership/SPV for development of townshipsconstruction of residential/commercial premises roads or bridges. PSP Projects Inc. hasone step-down Joint-venture P&J Builders LLC which is engaged in development andconstruction of Residential and Commercial Properties in USA.
Your Company has one Subsidiary in India PSP Projects & Proactive ConstructionsPrivate Limited which is a joint venture with Viridian Group for promotion and developmentof World Trade Centre in the state of Gujarat Currently this Company is constructing WTCat GIFT City in Gandhinagar Gujarat. PSP Projects & Proactive recorded turnoverincluding other income of ' 52.06 Crore in 2016-17 and has pre-tax profit of '83.58 Lakhs.
Your Company has one Joint Venture with Gannon Dunkerley & Co. Limited which isGDCL & PSP Joint Venture currently this Joint venture is constructing Metro TrainDepot cum workshop at Gyaspur for the Metro Rail Project.
In accordance with Regulation 16 of Securities and Exchange Board of India (ListingObligation and Disclosure Requirements) Regulations 2015 (Listing Regulations) none ofthe subsidiaries is a material non-listed subsidiary. The company has formulated a policyfor determining material subsidiaries. The policy has been uploaded on the website of theCompany at www.pspprojects.com.
9. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements have been prepared by the Company in accordance withthe requirements of applicable Accounting standards and the provisions of the CompaniesAct 2013. In accordance with Section 136 of the Companies Act 2013 your Directors haveattached the consolidated financial statements of the company which form a part of theAnnual Report.
The Financial statements including consolidated financial statements and auditedfinancial statements of each subsidiaries are available on the Company's website
10. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year 2016-17were in ordinary course of business and at an arm's length basis. In accordance with Sec134(h) of the Companies At 2013 and Rule 8(2) of Companies (Accounts) Rules 2014 theparticulars of contracts or arrangements entered into by the Company with the RelatedParties referred in Sec. 188(1) of the Act have been provided in Form AOC-2 and furnishedthe same as Annexure- B. However to have more transparency in related partiestransactions the Board is seeking shareholders' approval for the said transactions.
The Policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company.
11. PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
The particulars of Loans guarantees or investment made under Section 186 are furnishedin Annexure- C and is attached to this report.
12. CORPOATE GOVERNANCE
A separate section on Corporate Governance is given in Annexure-D forms anintegral part of this Annual Report of the Company. The Statutory Auditors of the Companyhave given their certificate regarding the compliance of the conditions of CorporateGovernance as stipulated under SEBI (LODR) Regulations 2015 and the same is annexed tothe Report on Corporate Governance.
Number of Meeting of the Board
The Board met 9 times during the financial year. The meeting details are provided inthe Corporate Governance report that forms part of the Annual Report. The Maximuminterval between any two meetings did not exceed 120 days as prescribed in the CompaniesAct 2013.
Committee of the Board
As on March 31 2017 the Board had five committees: the audit Committee thenomination and remuneration committee the corporate social responsibility committee thestakeholders' relationship committee and IPO committee. The details of the meetingincluding composition of various committee are provided in the Corporate GovernanceReport.
Declaration by Independent Directors
Your company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of the ListingRegulations.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of independentdirectors shall be carried out by the entire Board of Directors excluding the directorbeing evaluated. SEBI (LODR) Regulations 2015 also mandates that the Board shall monitorand review the Board evaluation framework. The evaluation of all the Directors and theBoard as a whole was conducted based on the criteria and framework adopted by theNomination and Remuneration Committee including performance and working of its committees.
Familiarisation Programme for Independent Directors
The details of the Familiarisation Programme for Independent Directors with the Companyin respect of their roles rights responsibilities in the Company nature of the industryin which Company operates business model of the Company and related matters are put up onthe website of the Company www.pspprojects.com.
As required by the provisions of the Act and the Listing Regulations the followingpolicies have been framed and disclosed on the Company's website
I. Nomination and Remuneration Policy
II. Related Party Transactions Policy
III. Corporate Social Responsibility Policy
IV. Vigil Mechanism Policy
V. Risk Management Policy
VI. Policy on Familiarisation Programme
VII. Policy on determining Material Subsidiaries
VIII. Code on Insider Trading
Risk Management & Internal Control System and their Adequacy
Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. A formal enterprise wide approach to Risk Management is being adopted by theCompany and key risks will now be managed within a unitary framework.
Your Company has appointed M/s. Manubhai & Shah LLP Chartered Accountants inIndia as Internal Auditor. The Company has in place an elaborate internal control systemcommensurate with the size and nature of its business and size and complexity of itsoperations. The primary objective of the Internal control systems comprising of policiesand procedures are designed to ensure reliability of financial reporting timely feedbackon achievement of operational and strategic goals compliance with policies proceduresapplicable laws and regulations to ensure proper authorization and accounting oftransactions as also for safeguarding and protecting Company's assets and that all assetsand resources are acquired economically used efficiently & adequately protected toprevent any revenue leakage and losses to the Company. The internal auditors' reports areperiodically reviewed by the management and the Audit Committee and necessary correctiveactions are taken from time to time.
13. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with provisions of the Act and the Articles of Association of theCompany Ms. Pooja Patel (DIN: 07168083) retires by rotation at the conclusion of theensuing Annual General Meeting and being eligible offer herself for reappointment. TheBoard of Directors recommends her appointment for consideration of the members at theensuing Annual General Meeting.
During the year under review Mr. Sagar Patel resigned from the Board of Directors ofthe Company with effect from December 12 2016. The Board places on record theirappreciation for the contribution made by him during his tenure.
Key Managerial Personnel (KMP)
Pursuant to provisions of Section 203 of the Companies Act 2013 the Company hasdesignated below mentioned persons as KMP:-
Mr. Prahalad S. Patel CEO
Mrs. Hetal Patel Chief Financial Officer
Ms. Minakshi Tak Company Secretary
14. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state the following:
a. that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;
b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the Profitand loss of the Company for that period;
c. the directors had 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. they have prepared the annual accounts on a going concern basis; and
e. they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and operating effectively.
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
15. AUDITORS & AUDITORS REPORT:
M/s. Prakash B. Sheth & Co. Chartered Accountants (Firm Registration Number108069W) the retiring Statutory Auditors are eligible for re-appointment and have givena certificate of consent under Section 139 of the Companies Act 2013 for theirappointment at the ensuing Annual General Meeting to act as the statutory auditors of theCompany from the conclusion of the ensuing Annual General Meeting till the conclusion ofthe next Annual General Meeting.
The resolution relating to annual ratification of statutory auditors appointment ispart of the notice of the 9th Annual General Meeting. Members may ratify theappointment of M/s. Prakash B. Sheth & Co. Chartered Accountants as the StatutoryAuditors of the Company for the financial year 2017-18.
Further the Statutory Auditors of the Company M/s. Prakash B. Sheth & Co. havesubmitted Auditors' Report on the accounts of the Company for the Financial Year ended 31stMarch 2017. The Auditors' Report is self-explanatory and do not call for any comments.
As per section 148 read with Companies (Audit and Auditors)Rule 2014 M/s. K.V. Melwani& Associates Practicing Cost Accountant (Firm Regn No. 100497) are appointed as CostAuditor of the Company for the financial year 2017-18 by the Board of Directors andseeking ratification of remuneration from the members of company at ensuing Annual GeneralMeeting.
Your Company has engaged M/s. Manubhai & Shah LLP Chartered Accountants asInternal Auditor to conduct internal audit for the year 2017-18. The internal audit willhelp company to review the operational efficiency and assessing the internal control. Italso reviews the safeguarding the assets of the Company.
Your Company has engaged Mr. Rohit S. Dudhela Practicing Company Secretary asSecretarial Auditor to conduct Secretarial audit for the year 2016-17. The report onsecretarial audit is annexed as Annexure-E to the Board's Report. The report doesnot contain any qualification reservation or adverse remark.
16. ADOPTION OF NEW SET OF ARTICLES OF ASSOCIATION
In order to bring the Articles of Association (AOA) of the Company in line with theprovisions of the Companies Act 2013 and Securities Contract Regulations Act andrequirement of stock exchanges with which the company intended to list its equity sharesthe Company recommended that the members adopt a comprehensive new set of the Articles ofAssociation of the Company ('new articles') in substitution of and to the exclusion ofthe AOA. The resolution to adopt the new articles was passed by majority by the members ofthe Company at the extra-ordinary General Meeting held on December 13 2016.
17. CORPORATE SOCIAL RESPONSIBILITY
In terms of Companies Act 2013 your company has undertaken Corporate Socialresponsibility programme. The disclosure as per Rule 9 of the Companies (Corporate Socialresponsibility Policy) 2014 is annexed as Annexure- F.
The CSR Policy may be accessed on the Company's website
18. EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rule 2014 an extract of annual return in MGT-19is given in the Annexure-G and form part of this Report.
19. MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to provision 34(2) of SEBI (LODR) Regulations 2015 a report on 'ManagementDiscussion & Analysis' is annexed separately as Annexure- H and forms anintegral part of this Annual Report.
20. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act read with theCompanies (Accounts) Rules 2014 are provided in the Annexure- I to this Report.
21. PARTICULARS OF EMPLOYEES
Disclosures under section 197(12) of the Companies Act 2013 read with Rule 5(1) and5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014respectively is annexed to the Board's report as Annexure -J.
The Company has taken adequate insurance to cover the risk to its people plants andmachineries building and other assets.
23. GREEN INITIATIVES
Electronics copies of the Annual Report 2016-17 and the Notice of the 9thAnnual General Meeting are sent to all members whose email address are registered with theCompany/depository participant(s). For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
Your Directors wish to express and place on record their thanks to the Company'sDistributors Dealers and Business Associates for their excellent effort and the customersfor their continued patronage. Your Directors also wish to place on record theirappreciation for the devoted services of the Executive Staff and workers of the Companyat all levels enabling the Company to achieve the excellent performance during the year.
Your Directors also appreciate the valuable co-operation and continued support receivedfrom Company's bankers and all the government agencies and departments.
The Directors also express their sincere thanks to all the Shareholders for thecontinued support and trust they have reposed in the Management.
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries/associate companies/joint ventures
PART "A": SUBSIDIARIES
(Information in respect of each subsidiary to be presented with amounts in ')
*turnover includes other income.
Notes: The following information shall be furnished at the end of the statement:
1. Names of subsidiaries which are yet to commence operations - NA
2. Names of subsidiaries which have been liquidated or sold during the year. - NA
PART "B": ASSOCIATES AND JOINT VENTURES
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
Name of associates/Joint Ventures GDCL & PSP Joint Venture
1. Latest audited Balance Sheet Date 31.03.2017
2. Date on which the Associate or Joint Venture was associated or Acquired 27.05.2015
3. Shares of Associate/Joint Ventures held by the company on the year end
Amount of Investment in Associates/Joint Venture 4459000
Extent of Holding (In percentage) 49%
4. Description of how there is significant influence Joint Venture
5. Reason why the associate/joint venture is not consolidated NA
6. Net worth attributable to shareholding as per latest audited Balance Sheet-2703364
7. Profit/Loss for the year -14516096
i. Considered in Consolidation -7112887
ii. Not Considered in Consolidation -7403209
1. Names of associates or joint ventures which are yet to commence operations. NA
2. Names of associates or joint ventures which have been liquidated or sold during theyear. NA
Particulars of contracts/arrangements entered into by the Company with related parties
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)
(Referred to in sub-section (1) of Section 188 of the Companies Act 2013 includingcertain arm's length transactions under third proviso thereto)
1. Details of contracts or arrangements or transactions not at arm's length basis: Nil
All contracts/arrangements entered into by the Company with related parties referred toin sub-section (1) of Section 188 of the Companies Act 2013 are at arm's length basis.
2. Details of material contracts or arrangement or transactions at arm's length basis:None During the reporting period there was no material* contract or arrangement.
(*As defined under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and adopted by the Board of Directors in the Related Party Transactions Policy of theCompany "Material Related Party Transaction" means a transaction with a relatedparty if the transaction / transactions to be entered into individually or taken togetherwith previous transactions during a financial year exceeds 10% of the annual consolidatedturnover of the company as per the last audited financial statements of the Company.)
(a) Name(s) of the related party and nature of relationship: NA
(b) Nature of contracts / arrangements / transactions: NA
(c) Duration of the contracts / arrangements / transactions: NA
(d) Salient terms of the contracts or arrangements or transactions including the valueif any: NA
(e) Date(s) of approval by the Board if any: NA
(f) Amount paid as advances if any: NA
Particulars of Loans guarantee or Investments under Section-186 of the Companies Act2013