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Parsvnath Developers Ltd.

BSE: 532780 Sector: Infrastructure
NSE: PARSVNATH ISIN Code: INE561H01026
BSE 15:04 | 07 Dec 8.52 0.77
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NSE 14:49 | 07 Dec 8.50 0.75
(9.68%)
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OPEN 8.13
PREVIOUS CLOSE 7.75
VOLUME 911632
52-Week high 27.05
52-Week low 6.70
P/E
Mkt Cap.(Rs cr) 371
Buy Price 8.52
Buy Qty 121864.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.13
CLOSE 7.75
VOLUME 911632
52-Week high 27.05
52-Week low 6.70
P/E
Mkt Cap.(Rs cr) 371
Buy Price 8.52
Buy Qty 121864.00
Sell Price 0.00
Sell Qty 0.00

Parsvnath Developers Ltd. (PARSVNATH) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 30th AnnualReport together with the Audited Financial Statements of the Company for the FinancialYear ("FY") ended March 31 2021.

1. FINANCIAL HIGHLIGHTS

( Rs in Lakhs)
Item STAND-ALONE CONSOLIDATED
FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
Total Revenue 33800.58 123778.05 42962.27 126824.90
Profit/ (loss) before depreciation and tax (23242.43) (11262.08) (38025.81) (34810.40)
Less: Depreciation 429.75 450.42 3435.15 2704.64
Profit/ (loss) before tax (23672.18) (11712.50) (41460.96) (37515.04)
Less: Provision for taxation 530.55 (2400.84) 1325.32 (1189.68)
Profit/ (loss) after tax (24202.73) (9311.66) (42786.28) (36325.36)
Share of Profit/(loss) in Associates - - (0.02) 1.41
Profit/ (loss) for the year (24202.73) (9311.66) (42786.30) (36323.95)
Other comprehensive income 49.87 (58.38) 49.87 (58.38)
Total comprehensive income for the year (24152.86) (9370.04) (42736.43) (36382.33)
Net profit/(loss) attributable to:
a) Shareholders of the Company (24152.86) (9370.04) (42692.43) (34713.99)
b) Non-controlling interest - - (44.00) (1668.34)
Balance brought forward (including other comprehensive income) (25846.05) (16476.01) (127198.59) (92484.60)
Add: Profit/(loss) for the year attributable to shareholders of the Company (24152.86) (9370.04) (42692.43) (34713.99)
Add: Impact of acquisition of shares of Subsidiary Company - - 60.67 -
Closing balance (including other comprehensive income) (49998.91) (25846.05) (169830.35) (127198.59)

2. REVIEW OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS

During the year under review on stand-alone basis the Company hasearned total revenue of Rs33800.58 Lakhs as against Rs123778.05 Lakhs in 2019-2020 andincurred a net loss of Rs(24202.73) Lakhs as against a net loss of Rs(9311.66) Lakhsincurred during 2019-2020.

During the year under review on consolidated basis the Company hasearned total revenue of Rs42962.27 Lakhs as against Rs126824.90 Lakhs in 2019-2020 andincurred a net loss of Rs(42786.30) Lakhs as against a net loss of Rs(36323.95) Lakhsincurred during 2019-2020.

Earnings per Share ("EPS") of the Company stood at Rs(5.56) on stand-alone basis and Rs (9.82) on consolidated basis in 2020-2021.

There has been no change in the nature of business of your Company. Adetailed business-wise review of the operations of the Company is included in theManagement Discussion and Analysis section of this Annual Report.

3. MATERIAL CHANGES AND/OR COMMITMENTS AFFECTING THE FINANCIALPOSITION OF YOUR COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OFSIGNING OF THIS REPORT

No material changes and/or commitments affecting the financial positionof your Company have occurred between the end of the Financial Year and the date ofsigning of this Report.

Impact of COVID-19 on the business and financials of the Company

The COVID-19 pandemic has manifested as a global challenge withbusiness disruptions throughout the globe.

The pandemic caused disruptions in the economy as a whole and impactedthe Indian Real Estate Industry as well. The construction activities were shut because onnon-availability of labour force and the raw materials in time. Both the CentralGovernment and the State Governments have taken various initiatives to boost this sectorby introducing various helping measures.

India had the strictest lockdowns to prevent the spread of COVID-19.This has impacted the economic activities. The consumer sentiments and spending appetitein the short-term was impacted badly. However with the success of vaccination drivecoupled with the initiatives taken by the Central and State Governments the revival pathis expected in the current fiscal. The long term impact still remains uncertain.

Upon ease of lock down restrictions the economy has started witnessinggradual recovery and activities are coming to normal.

The Company has assessed the economic impact of COVID-19 on itsbusiness by evaluating various scenarios on certain assumptions and current indicators offuture economic conditions and on the basis of internal and external sources ofinformation. Based on this the Company has assessed recoverability and carrying value ofits assets comprising inventory receivables investments investment propertiesintangible assets right of use assets advances deferred tax assets and other financialand non-financial assets and believes that it will recover the carrying value of all itsassets.

The management will continue to closely monitor any material changesarising out of future economic conditions and impact on its business.

4. SHARE CAPITAL

The Authorized Share Capital of the Company is Rs3500000000/-divided into 600000000 Equity Shares of

Rs5/- each and 50000000 Preference Shares of Rs10/- each. TheIssued Subscribed and Paid-up Share Capital of the Company is Rs2175905850/- dividedinto 435181170 Equity Shares of Rs5/- each.

There was no change in the Share Capital of the Company during the yearunder review.

5. DIVIDEND

In view of loss incurred during the Financial Year ended March 31 2021coupled with constrained liquidity position of the Company your Directors have consideredit appropriate not to recommend any dividend.

Pursuant to Regulation 43A of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") as amended the Board of Directors of the Company at itsMeeting held on August 13 2021 has adopted a ‘Dividend Distribution Policy'which is available on the Company's website and can be accessed at the link: http://www.parsvnath.com/investors/iulr/dividend-distribution-policy/

6. TRANSFER TO RESERVES

The Company has not transferred any amount to General Reserve duringthe Financial Year 2020-21.

In terms of the provisions of Section 71 of the Companies Act 2013 ("theAct") read with the Companies (Share Capital and Debentures) Rules 2014 asamended Debenture Redemption Reserve is not required to be created for Privately PlacedDebentures.

7. REDEMPTION OF DEBENTURES

During the year under review the Company has partly redeemed SeriesXIV Secured Redeemable Non-Convertible Debentures ("NCDs") amounting toRs769.19 Lakhs and Series XVI Secured Redeemable NCDs amounting to Rs569.40 Lakhs.

As per the Agreement with Debentureholder who is holding Series XIVNCDs the Debentureholder has permitted to extend the time for repayment till March 312023.

8. FIXED DEPOSITS

During the year under review the Company has not accepted fixeddeposits from the public.

9. LISTING AT STOCK EXCHANGES

The Equity Shares of the Company are listed on National Stock Exchangeof India Limited ("NSE") and BSE Limited ( "BSE" ). TheListing Fee for the Financial Year 2021-22 has been paid by the Company to both NSE andBSE.

10. ANNUAL RETURN

The Annual Return of the Company in Form MGT-7 may be accessed on theCompany's website at the link: http://www.parsvnath.com/investors/iulr/annual-return-form-mgt-7/ as per the provisions of Section92 of the Act.

11. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES ANDCONSOLIDATED FINANCIAL STATEMENTS

As on March 31 2021 the Company had 22 Subsidiaries (including aforeign subsidiary) and 3 Associate Companies in terms of the provisions of the Act.During the year under review there was no change in the number of Subsidiary andAssociate Companies of the Company except that Ratan Parsvnath Developers (AOP) a jointventure was dissolved

The project-specific or sector-specific Subsidiary Companies ensuremaximum utilization of available resources through focused attention on specificactivities.

Subsequent to the year end Parsvnath Buildwell Private Limited ("PBPL")a Subsidiary of the Company has become a Wholly-owned Subsidiary of the Company witheffect from June 11 2021.

Pursuant to the provisions of Section 129(3) of the Act a statementcontaining brief financial details of the Company's Subsidiaries and AssociateCompanies for the Financial Year ended March 31 2021 in Form AOC-1 is attached to theFinancial Statements of the Company. The details as required under Rule 8 of the Companies(Accounts) Rules 2014 regarding the performance and financial position of each of theSubsidiaries and Associate Companies forms part of the Consolidated Financial Statementsof the Company for the Financial Year ended March 31 2021.

Pursuant to the provisions of Section 136 of the Act the FinancialStatements of the Company (including Consolidated Financial Statements) alongwith relevantdocuments and separate audited accounts in respect of its Subsidiary Companies areavailable on the website of the Company at www.parsvnath.com The annual accounts of theseSubsidiaries and the related detailed information will also be made availableelectronically to any shareholder of the Company / its Subsidiary Companies on request.

Material Subsidiary Companies

As at March 31 2021 Parsvnath Infra Limited Parsvnath EstateDevelopers Private Limited Parsvnath Hessa Developers Private Limited and ParsvnathBuildwell Private Limited have become ‘Material Subsidiary Companies' as perthe provisions of the SEBI Listing Regulations and in terms of the Company's Policyfor determining Material Subsidiaries. The said Policy can be accessed on theCompany's website at the link:http://www.parsvnath.com/investors/iulr/policy-for-determining-material-subsidiaries/

Consolidated Financial Statements

In accordance with the provisions of the Act implementationrequirements of Indian Accounting Standards ("Ind-AS") Rules onaccounting and disclosure requirements and the SEBI Listing Regulations the AuditedConsolidated Financial Statements are provided in the Annual Report of the Company for theFinancial Year 2020-21.

12. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the Financial Year under review all contracts / arrangements /transactions entered by the Company with related parties were in the ordinary course ofbusiness and on an arm's length basis with specific approvals obtained wherevernecessary. 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 at arm's length.

Contract / Arrangement with Related Party under Section 188 of theAct

Pursuant to the decision of the Board at its Meeting held on August13 2019 the Company had entered into an agreement with Parsvnath Estate DevelopersPrivate Limited ( "PEDPL" ) wholly-owned Subsidiary Company of theCompany for sale and transfer of proposed agricultural land at Madurai Tamil Nadu to beacquired by the Company. The Company had earlier received Rs310 Crores from PEDPL asadvance for purchase of the said land during the Financial Year 2019-20. Being a materialtransaction the same was disclosed in the last Annual Report for the Financial Year2019-20 and the particulars of the same were reported in Form AOC-2.

During the year under review the Company has received an additionaladvance of Rs71.47 Crores (approx.). Though the amount of transaction is not material asper the last Audited Financial Statements of the Company the Company is disclosing thesame for the information of the Shareholders as a good Corporate Governance Practice.

During the year under review the Company had not entered into anycontract / arrangement / transaction with related parties which could be consideredmaterial under Section 188 of the Act. In view of the above the requirement of givingparticulars of contracts / arrangements made with related parties in Form AOC-2 is notapplicable for the year under review.

The related party transactions undertaken during the Financial Year2020–21 are detailed in the Notes to Accounts of the Financial Statements.

The Policy for determination of materiality of related partytransactions and dealing with related party transactions as approved by the Board can beaccessed on the Company's website at the link:http://www.parsvnath.com/investors/iulr/related-party-transaction-policy/.

13. LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT

As your Company is engaged in the business of real estate developmentincluded in the term ‘Infrastructural projects/ facilities' under Schedule VI tothe Act the provisions of

Section 186 of the Act related to loans made guarantees given orsecurities provided are not applicable to the Company. However the details of the sameare provided in the Financial Statements.

14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year underreview forming part of the Board's Report as stipulated under Regulation 34 (2)(e)read with Schedule V to the SEBI Listing Regulations is attached.

15. CORPORATE GOVERNANCE

The Company is committed to benchmarking itself with best practices ofCorporate Governance. It has put in place an effective Corporate Governance system whichensures that provisions of the Act and SEBI Listing Regulations are duly complied withnot only in letter but also in spirit.

The Board has also laid down and adopted a Code of Conduct for BoardMembers and Senior Management based on the principles of good Corporate Governance andbest management practices. The said Code is available on the website of the Company atwww.parsvnath.com and a declaration signed by Managing Director & CEO of the Companyafirming compliance thereto forms part of Corporate Governance Report.

The Company is in compliance with the Corporate Governance guidelinesas stipulated under SEBI Listing Regulations. A report on the matters mentioned in thesaid Regulations and the practices followed by the Company are detailed in CorporateGovernance Report which forms part of this report. A certificate of a Practising CompanySecretary confirming compliance with the conditions of Corporate Governance is attachedthereto.

16. BUSINESS RESPONSIBILITY REPORT

As per Regulation 34(2)(f) of the SEBI Listing Regulations the Companywas not required to attach the Business Responsibility Report ("BRR") toits Annual Report for the Financial Year 2020-21. However since the Company has comeunder the list of Top 1000 Companies (based on Market Capitalization) as on March 312021 BRR has become applicable for the next Financial Year 2021-22.

17. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

An Annual Report on CSR in compliance with the requirements of Section135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules2014 is annexed as Annexure I to this report in the prescribed format.

The Board at its Meeting held on August 13 2021 has amended the CSRPolicy of the Company taking into consideration the various amendments made in the CSRRules by MCA. The CSR Policy of the Company as approved by the Board is available on thewebsite of the Company and can be accessed through the web link http://www.parsvnath.com/investors/iulr/corporate-social-responsibility-policy/

The salient features of the policy are mentioned in the CorporateGovernance Report forming part of Board's Report.

18. RISK MANAGEMENT

Risk management is embedded in Company's operating framework. TheCompany believes that risk resilience is the key to achieving higher growth. The Companymanages monitors and reports on the principal risks and uncertainties that can impact itsability to achieve its strategic objectives. The Company's management systemsorganizational structure processes standards code of conduct etc. governs how theCompany conducts its business and manages associated risks.

The Company has an adequate risk management framework designed toidentify assess and mitigate risks appropriately. The Risk Management Committee of theBoard of Directors has been entrusted with the responsibility of overseeing various risksand assessing the adequacy of mitigation plans to address such risks. The terms ofreference and the composition details of the Risk Management Committee of the Company areprovided in the Corporate Governance Report which forms part of this report.

Your Company has a Risk Management Policy in place to assist the Boardin overseeing that all the risks that the Company faces such as strategic financialcredit market liquidity cyber security property human resource legal regulatoryreputational and other risks have been identified and assessed. During the year underreview the said policy has been amended by the Board in line with the amendments made inthe SEBI Listing Regulations.

19. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

In accordance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("POSH") and Rules madethereunder the Company has adopted a policy on Prevention Prohibition and Redressal ofSexual Harassment of Women at Workplace.

Your Company has complied with the provisions of the aforesaid Actrelating to the constitution of Internal Complaints Committee ("ICC"). AnICC is in place to redress complaints received regarding sexual harassment at theworkplace. The Company is strongly opposed to sexual harassment and employees are madeaware about the consequences of such acts and about the constitution of ICC.

During the Financial Year ended March 31 2021 no complaint pertainingto sexual harassment was received by the Company or reported to ICC.

20. PERFORMANCE EVALUATION

Due to the COVID-19 pandemic evaluation of performance of the Boardits Committees and Individual Directors could not be carried out and the same will be doneat an appropriate time in the near future.

21. APPLICATIONS MADE / PROCEEDINGS PENDING UNDER INSOLVENCY ANDBANKRUPTCY CODE 2016

Pursuant to the provisions of Section 134 of the Companies Act 2013read with Rule 8(5) of the Companies (Accounts) Rules 2014 the details of applicationsmade during the year and proceedings pending under the Insolvency and Bankruptcy Code2016 are annexed herewith as

Annexure II.

22. COMPLIANCE WITH THE SECRETARIAL STANDARDS

The Board confirms that during the period under review the Companyhas complied with the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India ("ICSI").

23. PROHIBITION OF INSIDER TRADING

In compliance with the Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015 ("PIT Regulations")the Board of Directors has adopted "Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information" and "Code of Conduct toregulate monitor and report trading by Designated Persons and their immediaterelatives" which are available on the website of the Company i.e. www.parsvnath.com.

Mr. Mandan Mishra Company Secretary is the Compliance Officer who isresponsible for setting forth policies and procedures for monitoring adherence to theaforesaid Codes under the overall supervision of the Board of Directors.

24. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act the Board ofDirectors to the best of its knowledge and ability state that:

a) in the preparation of the annual accounts for the Financial Yearended March 31 2021 the applicable accounting standards read with requirements set outunder Schedule III to the Act have been followed and there are no material departuresfrom the same;

b) the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and of the loss of the Company for the Financial Year ended on that date;

c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the Directors have prepared the annual accounts on a ‘goingconcern' basis;

e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and the reviews of the management and the relevantBoard Committees including the Audit Committee the Board is of the opinion that theCompany's internal financial controls were adequate and effective during theFinancial Year 2020-21.

Pursuant to Section 134(3)(ca) of the Act no fraud has been reportedby the Auditors of the Company.

25. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review the composition of the Board of Directorshas undergone change due to demise of Dr. Pritam Singh (DIN: 00057377) Non-ExecutiveIndependent Director of the Company on June 3 2020. The Board took on record thecontribution of Dr. Singh in the deliberations of the Board and the guidance and supportprovided by him during his tenure with the Company

The Board of Directors at its Meeting held on June 30 2021 hasco-opted Mr. Subhash Chander Setia (DIN:01883343) and Dr. Rakshita Shharma (DIN: 08579771)as Additional Directors on the Board of the Company w.e.f. June 30 2021 and hasrecommended their appointment as Independent Directors to the Shareholders at the ensuingAnnual General Meeting ("AGM") based on the recommendation of Nominationand Remuneration Committee.

Declarations by the Independent Directors

The Independent Directors have submitted necessary declarations thateach of them meets the criteria of independence as provided in Section 149(6) of the Actalong with Rules made thereunder and Regulation 16(1)(b) of the SEBI Listing Regulationsand confirmation under Regulation 25(8) of the SEBI Listing Regulations that they are notaware of any circumstance or situation which exists or may be reasonably anticipatedthat could impair or impact their ability to discharge their duties with an objectiveindependent judgment and without any external influence. Based on the declarationsreceived from the Independent Directors the Board of Directors has confirmed that theymeet the criteria of independence and that they are independent of the management.Necessary disclosures regarding Committee positions in other public companies have beenmade by the Directors and have been reported in the Corporate Governance Report formingpart of this Report.

During the year under review the Non-Executive Independent Directorsof the Company had no pecuniary relationship or transactions with the Company apart fromreceiving Directors' remuneration.

None of the Directors of the Company is debarred from holding theoffice of Director by virtue of any SEBI order or any other authority

The Board acknowledges the contribution made by the IndependentDirectors of the Company with their integrity expertise and diverse experience in thegrowth and development of the Company. In the opinion of the Board all the IndependentDirectors possess the requisite expertise and experience and are persons of high integrityand repute and they fulfill the conditions specified in the Act as well as the Rules madethereunder and SEBI Listing Regulations.

All the Independent Directors of the Company have got their namesincluded in the data bank of Independent Directors maintained with the Indian Institute ofCorporate Affairs ("IICA") in terms of Section 150 read with Rule 6 ofthe Companies (Appointment and Qualification of Directors) Rules 2014 as amended fromtime to time. All the Independent Directors except Dr. Rakshita Shharma are exempt frompassing the online pro_ciency test as prescribed under the aforesaid Rules.

Appointment and Re-appointment of Directors

Your Board of Directors is seeking the approval of shareholders forappointment of Mr. Subhash Chander Setia and Dr. Rakshita Shharma as Independent Directorsfor a term of 18 months commencing from June 30 2021 to December 29 2022. The Companyhas also received requisite declarations from them and notices under Section

160 of the Act from a Member of the Company proposing theircandidature for the office of Directors.

In accordance with the provisions of Section 152 of the Act read withthe Articles of Association of the Company Dr. Rajeev Jain (DIN: 00433463) will retire byrotation at the ensuing AGM and being eligible has offered himself for reappointment.

The Notice convening the ensuing AGM includes the proposals forappointment/ re-appointment of the Directors and their Brief Resumes / other details arefurnished in the explanatory statement thereto.

Key Managerial Personnel

Consequent to the cessation of Mr. V. Mohan as Company Secretary of theCompany w.e.f. close of working hours on December 31 2020 Mr. Mandan Mishra has beenappointed as Company Secretary of the Company w.e.f. January 1 2021.

In accordance with the provisions of Section 2(51) and 203 of the Actread with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Key Managerial Personnel of the Company are Mr. Pradeep Kumar Jain Chairman; Mr.Sanjeev Kumar Jain Managing Director and Chief Executive Officer; Dr. Rajeev JainDirector (Marketing); Mr. M.C. Jain Sr. Vice President (Corporate) & Group ChiefFinancial Officer and Mr. Mandan Mishra Company Secretary.

26. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIAFOR APPOINTMENT OF DIRECTORS

The Board has on the recommendation of the Nomination and RemunerationCommittee framed a Policy for appointment and remuneration of Directors Key ManagerialPersonnel and Senior Management.

The Nomination and Remuneration Policy as approved by the Board ofDirectors is available on the website of the Company and can be accessed through the weblink: http://www.parsvnath.com/investors/iulr/nomination-and-remuneration-policy/

The salient features of the policy are mentioned in the CorporateGovernance Report which forms part of this Report.

27. NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year underreview. For details of the meetings of the Board including attendance of the Directorsthereat please refer to the Corporate Governance Report which forms part of this Report.

28. BOARD COMMITTEES

Pursuant to the various applicable provisions of the Act read with SEBIListing Regulations the Board of Directors of the Company functions through / delegatesauthority to the following Committees:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Risk Management Committee

d) Corporate Social Responsibility Committee

e) Stakeholders Relationship Committee

f) Shares Committee

g) Management Committee

A detailed note on the various Committees of the Board of Directorsincluding their composition terms of reference and Meeting details etc. is given in theCorporate Governance Report which forms part of this Report.

29. AUDIT COMMITTEE RECOMMENDATIONS

During the year under review the suggestions put forth by the AuditCommittee were duly considered and accepted by the Board of Directors. There were noinstances of non-acceptance of such recommendations.

30. INTERNAL FINANCIAL CONTROLS AND INTERNAL AUDIT

The Company has in place adequate internal financial controls withreference to the Financial Statements. The Audit Committee periodically reviews theinternal control systems with the management Internal Auditors and Statutory Auditors andthe adequacy of internal audit function significant internal audit findings andfollow-ups thereon. The Company's internal control system is commensurate with thenature size and complexities of operations of the Company.

31. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism which also incorporates aWhistle Blower Policy for Directors and Employees to report genuine concerns in theprescribed manner in line with Section 177(9) of the Act and Regulation 22 of the SEBIListing Regulations. The Vigil Mechanism is overseen by the Audit Committee and itprovides 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. Itprovides a mechanism for Employees to approach the Chairman of the Audit Committee or theCompany Secretary designated as ‘Whistle and Ethics Officer'. During the yearno such incidents were reported and no personnel were denied access to the Chairman of theAudit Committee.

The Vigil Mechanism/ Whistle Blower Policy of the Company may beaccessed on the Company's website at the link:http://www.parsvnath.com/investors/information/vigil-mechanism-whistle-blower-policy/

32. AUDITORS

(a) Statutory Auditors and Independent Auditors' Report

As per the provisions of the Act read with rules made thereunder M/sS.N. Dhawan & Co. LLP Chartered Accountants (Firm Registration No. 000050N/ N500045)had been appointed as Statutory Auditors of the Company for a term of five consecutiveyears from the conclusion of 25th AGM till the conclusion of ensuing 30thAGM. Accordingly the first term of M/s S.N. Dhawan

& Co. LLP as Statutory Auditors of the Company will expire at theconclusion of the ensuing 30th AGM. However they have expressed theirun-willingness to be re-appointed for second term due to pre-occupation.

The Audit Committee and Board of Directors of the Company haverecommended to the Members the appointment of M/s T R Chadha & Co. LLP CharteredAccountants (Firm Registration No. 006711N/N500028) as Statutory Auditors of the Companyfor a term of five consecutive years from the conclusion of the ensuing 30thAGM till the conclusion of 35th AGM of the Company. Accordingly the resolutionis being proposed for appointment of Statutory Auditors at the ensuing AGM.

M/s T R Chadha & Co. LLP Chartered Accountants have conveyedtheir consent for the appointment and confirmation that their appointment if approved bythe members shall be in accordance with the conditions criteria and the limits asprescribed under the Act.

Independent Auditors' Report

4 M/s S.N. Dhawan & Co. LLP Statutory Auditors in their Reporton the Financial Statements of the Company for the Financial Year ended March 31 2021have drawn attention to some of the matters in the notes to the Ind-AS FinancialStatements in respect of which their opinion is not modified. The response of theDirectors in respect thereof is given below:

(i) Due to COVID-19 pandemic and continued recession in the real estatesector owing to slowdown in demand the Company is facing tight liquidity situation as aresult of which there have been delays/defaults in payment of principal and interest onborrowings statutory liabilities salaries to employees and other dues. Also the Companycontinues to face lack of adequate sources of finance to fund execution and completion ofits on-going projects resulting in delayed realisation from its customers and loweravailability of funds to discharge its liabilities. The Company is continuously exploringalternate sources of finance including sale of non - core assets to generate adequatecash inflows for meeting these obligations and to overcome this liquidity crunch. In theopinion of the Management no adverse impact is anticipated on future operations of theCompany.

(ii) Based on the management assumptions future business plans andplanned sale off some identified assets management is certain about realization of theseassets in coming years.

4 There were no instances of frauds reported by the StatutoryAuditors under Section 143(12) of the Act.

(b) Secretarial Auditor and Secretarial Audit Report

The Secretarial Audit Report of Mr. Krishnan Sitaraman for theFinancial Year ended March 31 2021 is annexed herewith as Annexure III to thisReport. The Secretarial

Auditor in his report has made some observations and the response ofthe Directors in respect thereof is given below:

(i) In respect of certain delays/ defaults in payment of principal andinterest on borrowings statutory liabilities and payment of other dues by the Companythe response of Directors is given in Point (a)(i) above.

(ii) In respect of the Show Cause Notice received from SEBI theCompany is in consultation with some experts to file a suitable reply in this matter.

(iii) In respect of the Show Cause Notices received from MCA theCompany has denied all the allegations charged against it and has filed compoundingapplications in respect thereof.

Pursuant to the provisions of Regulation 24A of the SEBI ListingRegulations the Secretarial Audit Report of Parsvnath Buildwell Private Limited MaterialUnlisted Subsidiary Company of the Company as on March 31 2020 issued by M/s Sonal J& Associates Company Secretaries for the Financial Year ended March 31 2021 isannexed herewith as Annexure IV to this Report. There are no qualificationsreservations or adverse remarks in the said Report.

(c) Internal Auditors

Pursuant to the provisions of Section 138 of the Act the Board ofDirectors of the Company has approved the appointment of M/s Nitin Agrawal &Associates Chartered Accountants (Firm Registration No. 015541C) in place of M/s AdeshJain & Associates Chartered Accountants (Firm Registration No. 010336N) as InternalAuditors of the Company based on the recommendation of the Audit Committee.

(d) Cost Auditors

The Company is required to maintain the cost records as per Section148 of the Act read with the Companies (Cost Records and Audit) Rules 2014 andaccordingly such accounts and records are made and maintained.

During the year under review the Board of Directors at its Meetingheld on September 1 2020 had re-appointed M/s Chandra Wadhwa & Company CostAccountants (Firm Registration No. 000239) as Cost Auditors of the Company for conductingthe audit of cost records of the Company for the Financial Year 2020-21.

The remuneration payable to Cost Auditors is required to be approved bythe Members in a General Meeting for their rati_cation. Accordingly a resolution seekingMembers' rati_cation for the remuneration payable to M/s Chandra Wadhwa & Companyfor conducting the audit of cost records of the Company for the Financial Year 2021-22as approved by the Board at its Meeting held on August 24 2021 based on therecommendation of Audit Committee is included in the notice convening the ensuing 30thAGM.

33. DISCLOSURES

A. Conservation of energy technology absorption foreign exchangeearnings and outgo

The disclosure of particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo as prescribed underSection 134(3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules 2014is annexed herewith as Annexure V to this Report.

B. Particulars of Employees

The particulars of employees under Section 197 of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are annexed herewith as Annexure VI to this Report.

Since none of the employees of the Company is drawing a remuneration ofmore than Rs102 Lakhs per annum if employed throughout the Financial Year and Rs8.5

Lakhs per month if employed for part of the Financial Year theprovisions of Section 197 of the Act read with Rule 5(2) and (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 relating thereto arenot applicable to the Company.

However the list of top ten employees of the Company (based onremuneration drawn during Financial Year 2020-21) is annexed herewith as Annexure VII.

. GENERAL

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

a. Details relating to deposits covered under Chapter V of the Act.

b. Issue of equity shares with differential rights as to dividendvoting or otherwise.

c. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.

d. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of the subsidiary companies of theCompany.

e. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company'soperations in future.

Update on the SEBI matter relating to Shell Companies

Pursuant to SEBI's Order dated January 4 2019 and consequentappointment of Ernst & Young LLP ("E&Y") by National StockExchange of India Limited ("NSE") to conduct forensic audit of certaintransactions of the Company E&Y has submitted its Forensic Audit Report dated April1 2020 and consequently SEBI had issued Show Cause Notices (SCNs) dated October 19 2020addressed to the Company its Directors and Chief Financial Officers who were holdingoffice during the Financial Years 2009-10 to 2011-12. The Company is in consultation withsome experts to file a suitable reply in respect thereof. In this connection a hearing isscheduled to be held on September 14 2021 before Whole-time Member SEBI.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere gratitude to theshareholders customers bankers financial institutions investors vendors and all otherbusiness associates for the continuous support provided by them to the Company and for theconfidence reposed in the management of the Company.

The Directors also wish to acknowledge the contribution made byemployees at all levels for steering the growth of the organization. Your Directors alsothank the Government of India the State Governments and other Government Agencies fortheir assistance and co-operation and look forward to their continued support in future.

On behalf of the Board of Directors
Sd/-
Place: Delhi (Pradeep Kumar Jain)
Date: August 24 2021 Chairman
DIN: 00333486

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