To the Members
We are pleased to present the report on the business and operations of your Company forthe year ended March 31 2017.
[Rs. In Lakh]
PARTICULARS STANDALONE CONSOLIDATED
2016-17 2015-16 2016-17 2015-16 Total Income 3833.64 2752.40 15666.8815735.68 Operational 822.59 933.11 11098.93 11275.97 Administration and Other ExpensesProfit/(Loss) Before 3011.05 1819.29 4567.95 4459.71 Depreciation Interest And TaxDepreciation 59.02 54.23 111.46 115.55 Interest and Finance 1936.79 1960.35 4717.465118.20 Charges Profit / (Loss) Before 1015.24 (195.29) (260.97) (774.04) ExceptionalItems Exceptional Items - (350.89) (102.77) (1229.08) Profit / (Loss) Before Tax1015.24 155.60 (158.20) 455.04 Tax Expense (1052.14) - (980.00) 422.37 Profit/ (Loss)after Tax 2067.38 155.60 821.80 32.67
State of the Company's Affairs
During the financial year 2016-17 the Company witnessed Profit both on Standalone andConsolidated basis. The total revenue of the Company for the financial year ended 31March 2017 on Standalone basis is Rs. 37.67 crores as compared to the previous year'stotal revenue of Rs. 18.52 crores. Further total revenue on consolidated basis is Rs.155.60 crores as compared to the previous year's total revenue of Rs. 147.95 crores.
The Standalone Profit after tax stood at 20.67 crores as against Profit of Rs. 1.56crores in 2016. Further the Consolidated Loss after tax stood at Rs. 8.22 crores asagainst Profit of Rs. 0.33 crores in 2016.
In view of the inadequacy of the profits and in order to conserve the resources of theCompany for future Business operations the Board of Directors did not recommend anydividend for the financial year ended March 31 2017.
Transfer to Reserves
In view of the aforesaid reason the Board of Directors did not propose to transfer anyamount to reserves for the period under review.
During the year there is no change in the capital structure of the Company.
Particulars of Loans Guarantees and Investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
During the year under review the Company has not issued any Debentures and totaldebentures outstanding as on the March 31 2017 is 13289 14.5% Redeemable fullyconvertible Debentures (FCDs) of Rs. 100000 each.
The Company has not accepted/renewed any fixed deposits during the year under review.
All the properties of your Company have been adequately insured.
Related Party Transactions
In line with the requirements of the Companies Act 2013 and erstwhile ListingAgreement and the current Listing Agreement signed with the stock exchanges pursuant toSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 your companyhas formulated a Policy on Related Party Transactions which is also available on theCompany's website at http://www.pvpglobal.com/ pdf/RPTPolicy-PVPL.pdf. The policy intendsto ensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and the Related Parties.
During the year under review no Related Party Transactions or Material Related PartyTransaction i.e. transactions exceeding 10% of the annual consolidated turnover as perthe latest audited financial statements were noticed during the period under review.Accordingly the disclosure of Related Party transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC 2 is not applicable for the year endedMarch 31 2016.
During the year the Company had not entered into any contract / arrangement /transactions with Related Parties which could be considered as material in terms ofRegulation 23 of the SEBI (LODR) Regulations 2015. In accordance with Accounting Standard18 the Related Party Transactions are disclosed under Note No. 26.14 of the StandaloneFinancial Statements.
Material changes and commitments affecting financial position between the end offinancial year and date of report
During the financial year under review the company executed "DevelopmentManagement Agreement"(DMA) on 27.04.2017 to develop the 20 acres land with M/s.Arihant Foundations & Housing Limited.
The Company along with its subsidiaries is operating in the verticals of UrbanInfrastructure Media and Entertainment and retail customer services. As on March 312017 the Company has 4 wholly-owned subsidiaries viz. PVP Corporate Parks PrivateLimited PVP Global Ventures Private Limited PVP Media Ventures Private LimitedSafetrunk Services Private Limited besides 2 subsidiaries viz. New Cyberabad CityProjects Private Limited Picturehouse Media Limited and 4 stepdown subsidiaries viz.Adobe Realtors Private Limited which is a wholly-owned subsidiary of PVP Global VenturesPrivate Limited and PVP Capital Limited
PVP Cinema Private Limited and Picturehouse Media Private Limited Singapore which arewholly-owned subsidiaries of Picturehouse Media Limited. Further as on March 31 2017the company has no Associate Companies.
The consolidated financial statements of the Company including its subsidiaries havebeen prepared in accordance with Section 129(3) of the Companies Act 2013. Further astatement containing salient features of the financial statements of the subsidiaries inthe prescribed format AOC-1 is appended as Annexure - 1 to the Board'sReport. Hence a separate report on the performance and financial position of each of thesubsidiaries and joint venture companies is not repeated here for the sake of brevity.
As required under Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the websitewww.pvpglobal.com. These documents will also available for inspection during the businesshours at the Registered office of the Company and any member who wish to get copies ofsuch financial statements may write to the Company for such requirement.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review is presented in aseparate section forming part of the Annual Report.
The Company is committed to maintain the prescribed standards of Corporate Governance.The Directors adhere to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance practices and have implemented all the mandatory stipulationsprescribed. The Report on Corporate Governance as stipulated under Regulation 34 read withSchedule V of the SEBI (Listing Obligations & Disclosure Requirement) Regulations2015 forms part of the Annual Report.
Board of Directors and Key Managerial Personnel
No Director(s) of the Company are being eligible offers themselves for re-appointment.
Mrs. Sai Padma Potluri Non-executive woman Director of the Company resigned from theBoard with effect from March 06 2017.
Except the resignation of Mrs. Sai Padma Potluri there was no other change in theBoard of Directors during the year.
The details of training and familiarization programs and Annual Board Evaluationprocess for directors have been provided in the Nomination Remuneration & PerformanceEvaluation Policy annexed with this report.
Every Independent Director at the first meeting of the Board in which he participatesas a Director and thereafter at the first meeting of the Board in every financial year orwhenever there is any change in the criteria which may affect his status as an independentDirector gives a declaration that he meets the criteria of independence as provided underSection 149(6) of the Companies Act 2013.
The policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of director and alsoremuneration for Key Managerial Personnel and other employees and
Board evaluation process also forms part of Annual Report at Annexure 2. TheManaging Director doesn't receive any remuneration from any of the Subsidiaries of theCompany.
During the year under review Mr. S. Kannan CFO has resigned w.e.f 30.09.2016 Mr.Piyush Dwivedi VP-Corporate Finance & Strategy has resigned w.e.f. 04.11.2016 Mr. PVKrishna Kishore Babu GM-Legal has resigned w.e.f. 30.11.2016 and Mr. Ravi Kumar Reddyresigned as the Company Secretary of the Company with effect from December 07 2017.Subsequently the Board in its meeting held on December 14 2016 appointed Mr. D.Krishnamoorthy as CFO of the Company and further in its meeting held on February 07 2017Mr. D. Krishnamoorthy was given additional responsibility as Company Secretary andCompliance officer of the Company.
There is no other change in the Key Managerial Personnel except the above.
Composition of Board Committees
| ||Audit Committee |
|Mr. R. Nagarajan ||Chairman |
|Mr. N. S. Kumar ||Member |
|Mr. Prasad V. Potluri ||Member |
|Nomination and Remuneration Committee || |
|Mr. N. S. Kumar ||Chairman |
|Mr. R. Nagarajan ||Member |
|*Mrs. P. Sai Padma ||Member |
|Stakeholders Relationship Committee || |
|Mr. R. Nagarajan ||Chairman |
|Mr. N. S. Kumar ||Member |
|Mr. Prasad V. Potluri ||Member |
|Corporate Social Responsibility Committee || |
|Mr. R. Nagarajan ||Chairman |
|Mr. N. S. Kumar ||Member |
|Mr. Prasad V. Potluri ||Member |
|Executive Committee || |
|Mr. Prasad V. Potluri ||Chairman |
|*Ms. P. Sai Padma ||Member |
Further details with respect to the aforesaid Committees are provided in the CorporateGovernance Report attached herewith.
*Mrs. P. Sai Padma Potluri Director of the Company resigned with effect from March 062017.
Number of Meetings of the Board
The Board met 5 (Five) times during the financial year and the details of which aregiven in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between any two meetings was well within the period prescribed under theprovisions of the Companies Act 2013.
Directors' Responsibility Statement
The financial statements of the Company are prepared as per applicable AccountingStandards as prescribed under Section 133 read with Rule 7 of the Companies (Accounts)
Rules 2014 of the Companies Act 2013 and other applicable provisions if any of thesaid act. There are no material departures from prescribed accounting standards. TheDirectors confirm that:
(i) In preparation of the annual accounts for the financial year ended March 31 2017the applicable accounting standards have been followed;
(ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(iv) The directors have prepared the annual accounts on a going concern basis;
(v) The directors have laid down internal financial controls which are adequate andare operating effectively; and
(vi) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate to operate the company effectively.
Statement on declaration given by Independent Directors under sub-section (6) ofSec.149
The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7) of section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section(6) of Section 149.
M/s Brahmayya & Co. Chartered Accountants (FRN: 000511S) were appointed asStatutory Auditors of your Company at the 25th Annual General Meeting held on September27 2016 for a term of five consecutive years. As per the provisions of Section 139 of theCompanies Act 2013 the appointment of Auditors is required to be ratified by Members atevery Annual General Meeting.
In this regard M/s. Brahmayya & Co. Chartered Accountants have submitted theirwritten consent that they are eligible and qualified to be re-appointed as StatutoryAuditors of the Company in terms of Section 139 of the Companies Act 2013 and alsosatisfy the criteria provided in Section 141 of the Companies Act 2013.
Accordingly the Board recommended ratification of the appointment of M/s. Brahmayya& Co. Chartered Accountants as the Statutory Auditors of the Company at the thisAnnual General Meeting.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
Auditors' Report & Directors' Comments on the Qualification made by statutoryauditors:
The Auditors' Report for the financial year 2016-17 is a "qualified report'' forthe standalone financial statements and "Un-qualified report" for theConsolidated financial statements.
"As stated in Note No: 26.8 to the Standalone Ind AS Financial Statements inrelation to investment in few subsidiary companies net off provision amounting toRs.56005.15 Lakhs. Considering the market value of the assets and expected cash flowsfrom the business of these subsidiary companies management considers these investments asgood and recoverable and the provision to the extent already made is adequate. However theerosion in the net worth of these subsidiary companies their dependence on the holdingcompany to continue as a going concern absence of cash flows delay in commencement ofprojects and other related factors indicate the existence of material uncertainty inrecoverability of net carrying value of investments. Hence we were unable to determinewhether any adjustments to these net carrying amounts are necessary and additionalprovision for diminution if any to be made are not quantifiable at this point oftime."
Directors' Comments on the above qualification
In this regard the Board draws the attention of the current status of the North TownProject and the DMA signed for the 20 Acre Parcel where in the bifurcated plots ofvarious sizes will bring sufficient revenue in the coming years. Hence the Board is ofthe view that considering the market value of the assets and expected cash flows from thebusiness the provision already made are adequate.
M/s. D. Hanumanta Raju & Co. Company Secretaries were appointed to conduct theSecretarial Audit of the Company for the financial year 2016-17 as required under Section204 of the Companies Act 2013 and rules thereunder. The Secretarial Audit Report for thefinancial year 2016-17 forms part of the Annual Report as Annexure-3 of the Board'sReport.
As on 31st March 2017 Board of the company does not have a Woman Director. Ms. SaiPadma Potluri who was acting in the capacity of Non-executive Woman Director hasresigned on 06th March 2017 which resulted in vacancy of a Woman Director on the Board ofthe Company.
Further due to her resignation the constitution of Nomination and remunerationcommittee is not as per Section 178 of Companies Act 2013 and Regulation 19 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Directors' Comments on the above qualification:
The Board is of the view that the Company is making earnest efforts to appoint asuitable and affordable Woman Director having an adequate industry knowledge andexperience which can be utilised for the growth of the Company.
After the appointment of the Woman Director the nomination and remuneration committeewill be reconstituted to induct the woman director as member of the committee in line withthe provisions of the Companies Act 2013.
Stock Exchange Listing
Presently the Equity Shares of the Company are listed on the BSE Limited (BSE) and theNational Stock Exchange of India Limited. The Company confirms that it has paid the AnnualListing Fees due to both the Stock Exchanges for the year 2017-18.
Chairman and Managing Director Certification
As required under the SEBI Guidelines the Chairman and Managing Director and the ChiefFinancial Officer Certification is attached to this Report.
Significant Material Orders
There were no significant Material Orders passed against the Company during the yearunder review.
Extract of Annual Return
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure 4 of the Board'sReport.
Internal Financial Control
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
The company has systems policies and process in place pertaining to the InternalControl over the investments and advances in its subsidiaries. The Company is alsoextending the financial and strategic support to recover the investments and advances madeto subsidiaries considering the market value of the assets and expected cash flows.
Vigil Mechanism / Whistle Blower Policy
The Company has a Whistle Blower Policy framed to deal with instances of fraud andmismanagement if any. The details of the Policy are explained in the Corporate GovernanceReport and also posted on the website of the Company www.pvpglobal.com
Corporate Social Responsibility (CSR)
CSR Committee of the Company comprises of Mr. R Nagarajan Mr. N S Kumar and Mr. PrasadV. Potluri and the Committee is responsible for formulating and monitoring the CSR Policyof the Company. The CSR Policy of the Company as approved by the Board of Directors of theCompany is available on website of the company. The Report on Corporate SocialResponsibility as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules2014 is enclosed as Annexure-5 to this Report.
Reason for not spending the CSR amount
The company is required to spend Rs. 36.98 Lakhs for the financial year 2015-16 and Rs.10.58 lakhs for the FY 2016-17 and the same will be expended in future years. Thecompany's only source of income is revenue from the Joint Development Agreement enteredwith M/s. North Town Estates Private Limited. As stated earlier the Developer hasreleased 20 acres of undeveloped land parcel to the Company for which the company has anobligation to repay the Security Deposit. The Developer is adjusting the Company's Shareof revenue against the outstanding security deposits with respect to the said 20 acres.Hence the cash flow of the company is adversely affected in-spite of recording Profitafter Tax during the current financial year.
Particulars of employees
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) and
5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is appended as Annexure-6 to the Board's Report.
Risk Management Policy
The Company has risk management policy in place which mitigates the risk at appropriatesituations and there are no elements of risk which in the opinion of Board of Directorsmay jeopardize the existence of the Company.
Disclosure under the Sexual Harassment of Women at Workplace (prevention prohibitionand redressal) Act 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The following is a summary of sexualharassment complaints received and disposed off during financial year ended March 312017:
No. of complaints received: Nil No. of complaints disposed off: Nil
Conservation of Energy Technology Absorption and Foreign Exchange Earning/Outgo
Particulars regarding technology absorption conservation of energy and foreignexchange earnings and outgo required under Section 134 (3)(m) of the Companies Act 2013read with Rule 8 of Companies (Accounts) Rules 2014 to the extent applicable are asunder:
CONSERVATION OF ENERGY
The operations of the Company involve low energy A consumption. Adequate measures havehowever been taken to conserve energy.
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
The Company continues to use the latest technologies for improving the quality of itsoperations.
C FOREIGN EXCHANGE EARNINGS AND OUTGO:
| || ||[Rs. In Lakh] |
| ||Current ||Previous |
|Particulars || || |
| ||Year ||Year |
|1. Foreign Exchange Earnings ||Nil ||Nil |
|2. Foreign Exchange Outgo: ||Nil ||Nil |
|Total ||Nil ||Nil |
Your Directors wish to express their appreciation for the support and co-operationextended by the bankers financial institutions joint development partners shareholdersgovernment agencies and other business associates. Your Directors wish to place on recordtheir deep sense of appreciation for the committed services by the employees of theCompany.
For and on behalf of Board of Directors
|Sd/- ||Sd/- |
|Prasad V. Potluri ||R. Nagarajan |
|Chairman & Managing Director ||Director |