Your Directors have the pleasure in presenting the Twelfth (12th) Board'sreport on the business and operations of your Company ('PSP Projects Limited' or 'PSPProjects' or 'the Company') together with the audited standalone and consolidatedfinancial statements for the year ended March 31 2020.
1. Financial Highlights
The standalone and consolidated performance for the financial year ended March 312020is as under:
(Rs. in Lakhs except per equity share data)
| ||Standalone ||Consolidated |
|Particulars ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from operations ||149925.77 ||104401.25 ||149925.93 ||105040.66 |
|Other income (net) ||2477.53 ||2297.84 ||2416.63 ||2274.85 |
|Total Income (A) ||152403.30 ||106699.09 ||152342.56 ||107315.51 |
|Cost of Construction Material Consumed ||52665.93 ||43071.43 ||52665.93 ||43369.90 |
|Changes in Inventories of Work-In-Progress ||839.41 ||(1791.48) ||839.41 ||(1791.48) |
|Construction Expenses ||70042.26 ||42915.74 ||70044.68 ||43272.51 |
|Employee benefits expense ||5944.04 ||4317.82 ||5948.66 ||4321.26 |
|Finance costs ||1463.80 ||916.05 ||1505.58 ||967.39 |
|Depreciation and amortization expense ||2669.17 ||2422.90 ||2669.55 ||2430.17 |
|Other expenses ||1336.50 ||993.29 ||1361.75 ||1012.33 |
|Total Expenses (B) ||134961.11 ||92845.75 ||135035.56 ||93582.08 |
|Profit Before tax (PBT) (A-B) ||17442.19 ||13853.34 ||17307.00 ||13733.43 |
|Less Total Tax Expense ||4516.16 ||4829.72 ||4504.49 ||4821.49 |
|Net Profit After Tax (PAT) ||12926.03 ||9023.62 ||12802.51 ||8911.94 |
|Share of Profit/(Loss) from JV ||- ||- ||28.41 ||9.07 |
|Other Comprehensive Income ||(13.14) ||(2.10) ||(20.17) ||(4.23) |
|Total Comprehensive Income ||12912.89 ||9021.52 ||12810.75 ||8916.78 |
|Earnings per share || || || || |
|(Rs 10/- each) || || || || |
|a) Basic ||35.91 ||25.07 ||35.69 ||24.84 |
|b) Diluted ||35.91 ||25.07 ||35.69 ||24.84 |
Figures relating to previous year have been regrouped/rearranged whenever necessary tomake them comparable to current period's figures.
2. Financial Performance Review
(i) Summary of Standalone Financial Performance
(Rs. in Lakhs)
| || ||Standalone || |
|Particulars ||2019-20 ||2018-19 ||YOY growth (%) |
|Revenue from operations ||149925.77 ||104401.25 ||44% |
|Total Operating Expenses ||130828.14 ||89506.80 ||46% |
|EBITDA ||19097.63 ||14894.45 ||28% |
|EBITDA Margin (%) ||12.74% ||14.27% ||- |
|Profit Before Tax ||17442.19 ||13853.34 ||26% |
|Profit After Tax ||12912.89 ||9021.52 ||43% |
|PAT Margin (%) ||8.47% ||8.46% || |
(ii) Summary of Consolidated Financial Performance
Rs. in Lakhs)
| || ||Consolidated || |
|Particulars ||2019-20 ||2018-19 ||YOY growth (%) |
|Revenue from operations ||149925.93 ||105040.66 ||43% |
|Total Operating Expenses ||130860.43 ||90184.52 ||45% |
|EBITDA ||19065.50 ||14856.14 ||28% |
|EBITDA Margin (%) ||12.72% ||14.14% || |
|Profit Before Tax ||17307.00 ||13733.43 ||26% |
|Profit After Tax ||12810.75 ||8916.78 ||44% |
|PAT Margin (%) ||8.41% ||8.31% || |
Your Company has adopted the option available under Section 115BAA of the Income-taxAct 1961 as per the Taxation Laws (Amendment) Act 2019 dated December 11 2019.Accordingly our effective tax rate including deferred tax is at 25.89% as compared to34.86 % in the previous year.
Overall the standalone results are almost identical to the consolidated results as theimpact of consolidation of subsidiaries results with standalone results is insignificant.
3. Operational Performance review
PSP Projects Limited is a multidisciplinary construction company offering a diversifiedrange of construction and allied services across industrial institutional governmentgovernment residential and residential projects in India. Your company provides itsservices across the construction value chain ranging from planning and design toconstruction and post-construction activities including MEP work and other interiorfitouts to private and public sector enterprises. Historically your company have focusedon projects in the Gujarat region. More recently have actively expanded its geographicalpresence to other states and diversified its portfolio of services and presently havepresence over 5 states in India.
Your company received work orders worth Rs. 157897.11 Lakhs during the period underreview. The major projects awarded during the year included one affordable housingproject in Maharashtra Construction of Gujarat's largest mall - Phoenix mall atAhmedabad Gujarat Construction of a plant for a leading FMCG company at SanandAhmedabad one marquee hotel interior project at Gandhinagar Gujarat. Furthermore itreceived its first and prestigious project in the state of Uttar Pradesh for Developmentof Shri Kashi Vishwanath Dham and its beautification.
Till March 31 2020 your company had successfully completed 143 projects out of which23 projects were completed during the period under review. The Major Completed projectsduring the year included two projects at GIFT City viz one project of Prestige Fintech andanother Grand Mercury Hotel by Brigade Group Construction of corporate house for one ofits prestigious client Zydus Group and construction work for injectable unit at Ahmedabadfor Punishka Healthcare Private Limited. Moreover your company's first major projectoutside Gujarat for Bangalore Milk Union Limited in Bengaluru Karnataka was handed overto client this year.
As of March 31 2020 we had a robust order book of Rs 307356 Lakhs including 47projects under execution spread over Gujarat Rajasthan Karnataka Maharashtra and UttarPradesh. The category wise and geographical wise breakup of the order book is as under:
Category wise Break up
|Category ||% of order book |
|Institutional ||51.59% |
|Government residential ||24.20% |
|Government ||15.95% |
|Industrial ||5.55% |
|Residential ||2.71% |
|Geographical Break up || |
|Category ||% of order book |
|Gujarat ||62.34% |
|Maharashtra ||24.20% |
|Uttar Pradesh ||10.85% |
|Rajasthan ||1.43% |
|Karnataka ||1.18% |
Major ongoing projects as of March 31 2020:
|Description of the ongoing projects ||Location ||Total Contract Value ||Outstanding Contract Value |
|Surat Diamond Bourse Main Contract Works ||Surat Gujarat ||157500 ||61829 |
|EWS Housing project ||Bhiwandi Maharashtra ||60140 ||60140 |
|Development of Shri Kashi Vishwanath Dham ||Varanasi Uttar Pradesh ||33900 ||33344 |
|IIM Ahmedabad ||Ahmedabad Gujarat ||32801 ||27062 |
|Affordable housing project ||Pandharpur Maharashtra ||15755 ||14251 |
|Phoenix mall ||Ahmedabad Gujarat ||13909 ||10634 |
|Sabha hall & residential complex ||Ahmedabad Gujarat ||10460 ||10460 |
|Zydus hospital ||Vadodara Gujarat ||10691 ||9587 |
|Multi-tenanted office ||Gandhinagar Gujarat ||13050 ||9405 |
|Civil/structural works for FMCG company ||Ahmedabad Gujarat ||9973 ||9020 |
|Residential complex for pharma company ||Dahod Gujarat ||7893 ||7392 |
|Construction of medical college ||Dahod Gujarat ||22500 ||5634 |
|Hospital on Lumpsum turnkey basis ||Sitapur Gujarat ||7739 ||5598 |
|Super speciality block of medical college ||Bhavnagar Gujarat ||7860 ||4641 |
4. Impact of COVID-19 Pandemic
The outbreak of Corona virus (COVID-19) pandemic globally and in India has caused andcontinue to cause significant disruption in the business activities worldwide resultingin an economic slowdown. As a measure to prevent the community spread of COVID -19 thegovernment of India ordered a nationwide lockdown in tranches which resulted insignificant reduction in economic activities.
As of March 31 2020 in view of the sudden lockdown our site operations were closedand work from home was enabled for all the employees at the corporate office of thecompany. Subsequently with the release of the notification and guidelines issued by thegovernment work was resumed at some of the sites upon receipt of approval from concernedauthorities. However after the movement of interstate migrant labourers to their nativeplaces amid the COVID- 19 induced situation the available labourers were deployed atmajor project sites for their optimum utilisation and were working at a reduced labourstrength. Gradually the labourers started to return and resume work and consequently thecompany has been able to restore majority of its labour workforce and expects the businessoperations to come back to normalcy by Q2FY21. Moreover the employees at the corporateoffice have resumed work with implementation of all the necessary social distancing andsafety guidelines. Protection of health and safety of the employees and labourers remainsof utmost priority to your company while ensuring that there is minimum disruption toregular business operations.
The overall situation impacted the tight timelines of some of our projects. Furtherdue to non-working conditions during the lockdown and subsequent migration of workers totheir home states resulted into sudden downfall/negligible sales while simultaneouslythe company is surrounded by many fix cost to perform. Additionally the company hassufficient cash funds in the form of fixed deposits and partially unutilised fund basedcredit facilities to meet short term financial shortfalls. Although there have been someuncertainties due to the pandemic the company continues to take measures to mitigate theadverse impact.
5. Awards and Recognitions
Your company received several awards in recognition of its contribution to theconstruction sector during the financial year 2019-20. Some of the prestigious awards are:
Felicitated as the Second Fastest Growing Construction Company in Small Category and'India's Top Challengers Awards' by Construction World Global Awards 2019 for second timein a row.
Recognition as the 'Fastest Growing Construction & Engineering Company' by CREDAIduring CREDAI Gujarat Growth Ambassadors Summit 2019.
Three projects of your company were acclaimed at the ICI - UltraTech OutstandingStructure Awards 2020 as below:
a) Gujarat Housing Board (GHB) Naranpura and Lilavati Library Project at CEPTUniversity were declared as the winner of the ICI - UltraTech Outstanding Structure Awards2020 (Regional) in the mass housing and institutional category respectively.
b) One42 was declared as the winner of the ICI - UltraTech Outstanding Structure Awards2020 (State) in the commercial category.
6. Quality Environment Health and Safety
Your company's continual commitment to safety heath environment and qualitymanagement is achieved through implementation of an integrated management system inaccordance with ISO 9001:2015 ISO 14001:2015 and ISO 45001-2018. Our company believes in'Safety first' and continuously pursues initiatives to improve the quality of lives of oursite workers and their families and ensuring zero mishaps.
7. Change in the nature of business if any
During the year under review there has been no change in the nature of business ofyour company.
8. 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.
There have been no material changes and commitments which affect the financialposition of your Company that have occurred between the end of the financial year towhich the financial statements relate and the date of this report.
During the year under review the board of directors of your company declared and paidan interim dividend of Rs 5/- per equity share of the face value of Rs 10 /- each for thefinancial year ended March 31 2020.
The board recommends to confirm the Interim Dividend of Rs. 5/- per equity share of theface value of Rs 10/- paid by the company for the financial year ended March 31 2020 asFinal Dividend at the ensuing 12th Annual General Meeting.
The total dividend pay-out on equity shares (excluding dividend tax) for the financialyear ended March 31 2020 aggregates to Rs 1800 Lakhs.
The dividend pay-out is in accordance with the Company's Dividend Distribution Policywhich is annexed to this report as Annexure A and is also available on the website of thecompany at: (https://www.pspprojects.com/wp-content/uploads/2017/10/Dividend-Distribution-Policy-1.pdf)
The total amount lying in the Unpaid Dividend Account of the company as on March 312020 is as under:
|Dividend for the Financial Year ||Amount of Unpaid/Unclaimed Dividend as on ||Amount of Unpaid/Unclaimed Dividend (in Rs in lakhs) |
|2018-19 ||March 31 2020 ||0.55 |
|2017-18 ||March 31 2020 ||0.57 |
|2016-17 ||March 312020 ||0.15 |
The Statement containing the names and last known addresses and amount of dividend tobe paid to the members (of latest available date) is available on the website of thecompany at:
Details of unpaid/unclaimed dividend for the financial year 2018-19:
Details of unpaid/unclaimed dividend for the financial year 2017-18:
Details of unpaid/unclaimed dividend for the financial year 2016-17:
The Shareholders are therefore encouraged to verify their records and claim theirdividends if not claimed.
Transfer of unclaimed dividend to investor education and protection fund:
Since the statutory period of seven years has yet not been completed for transfer ofunclaimed and unpaid dividend the provision of Section 125 of the Companies Act 2013does not attract to your company.
a) Transfer to Reserves
During the year under review your Company has not transferred any amount to thereserves.
b) Public Deposits
During the year under review your Company has not accepted any deposits under ChapterV of the Act and Companies (Acceptance of Deposits) Rules 2014 from public / members.
11. Credit Rating
During the year under review CARE Ratings Limited- a reputed credit rating agencyreaffirmed its Credit rating of your company's Long term/Short term bank facilities asunder:
|Facilities ||Amount (Rs in Lakhs) ||Rating ||Rating Action |
|Long-term Bank Facilities ||4500.00 ||CARE A+; Stable [Single A Plus; Outlook: Stable] ||Reaffirmed |
|Long-term/ Short-term ||56500.00 ||CARE A+; Stable / CARE A1 + ||Reaffirmed |
|Bank Facilities || ||[Single A Plus; Outlook: Stable A One Plus] || |
|Total Facilities ||61000.00 [Rupees Sixty One Thousand Lakhs Only ] || || |
This reaffirms the high reputation of the company and its ability to meet financialobligations.
12. Share Capital
During the year under review there is no change in the share capital structure of yourcompany.
As on March 31 2020 the Authorized Share Capital of the company stood at Rs500000000/- representing 50000000 shares of face value of Rs 10/- each and the Paidup share capital stood at Rs 360000000/- representing 36000000 shares of face valueof Rs 10/- each.
As on March 31 2020 100% of your Company's total paid up capital representing36000000 shares are in dematerialized form.
During the year under review your company has not issued any shares with differentialvoting rights or any sweat shares or any shares under Employees Stock Option scheme andhence no information for the same has been furnished.
13. Performance of Subsidiaries/Joint Venture
The Company has two subsidiaries and one joint venture as on March 31 2020. There isno associate company that fall within the meaning of Section 2(6) of the Companies Act2013 ("Act"). There has been no material change in the nature of the business ofthe subsidiaries and Joint Venture.
The summary of performance of the subsidiaries and joint venture is as under:
PSP Projects INC
During the period under review PSP Projects INC (foreign subsidiary) formed aCalifornia limited liability company PSP Fremont LLC with 50% partnership; engaged in thesame line of business of making investment in development and construction of residentialand commercial properties. As on date PSP Projects INC is a 50% partner in P& JBuilders LLC and PSP Fremont LLC viz Step down foreign Joint ventures (Level-I) of yourcompany. PSP Fremont LLC further has a wholly owned California limited liability companyby the name Guttenberg Project LLC engaged in the development and construction ofresidential and commercial properties.
As on March 31 2020 there was no revenue from the operations of the foreignsubsidiary while the other income stood at Rs 173.96 Lakhs and further incurred a netloss of Rs 30.91 Lakhs.
PSP Projects & Proactive Constructions Private Limited
As on March 31 2020 the revenue from operations of PSP Projects & ProactiveConstructions Private Limited domestic subsidiary of the company stood at Rs 0.85 Lakhsother income stood at Rs 23.70 Lakhs while it registered a net loss of Rs 64.20 Lakhs.
GDCL & PSP Joint Venture
As on March 31 2020 GDCL & PSP Joint Venture earned a net profit Rs. 57.99 Lakhsout of which net profit of Rs. 28.41 lakhs forms part of the consolidated financials ofyour company. The turnover of the JV is not shown in consolidated financial statements ofyour company.
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries and Joint venturein Form No. AOC-1 forms part of consolidated financial statements.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of your Company at https://www.pspprojects.com/financial-performance/ and areavailable for inspection by the members during working hours at the Registered office ofthe company.
As on March 31 2020 your Company does not have any material subsidiary and pursuantto the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 thePolicy for determining material subsidiaries is available on the website of the companyat: (https://www.pspprojects. com/wp-content/uploads/2017/10/Policy-on-Material-Subsidiary-April-2019.pdf)
14. Extract of Annual Return
As per the requirements of Section 92(3) of the Act and read with Companies (Managementand Administration) Rules 2014 an extract of annual return of your Company as on March31 2020 is set out as Annexure B in the prescribed Form No. MGT-9 which forms part ofthis report. The same is available on the website of the company at : (https://www.pspprojects.com/financial-performance/)
15. Committees of the Board
As on March 31 2020 there were following committees of the board to assist it indischarging its responsibilities:
a) Audit Committee
b) Nomination and Remuneration committee
c) Stakeholder Relationship Committee
d) Corporate Social Responsibility Committee
e) Fund Raising committee
During the year under review the audit committee of the company was reconstituted andMrs. Zarana P. Patel Independent Director was inducted as the member of the committee.
Post reconstitution the composition of the Audit committee is as under:
|Sr. no. Name of Director ||Category of Director ||Designation in the committee |
|1. Mr. Vasishtha P Patel ||Independent Director ||Chairman |
|2. Mrs. Zarana P Patel ||Independent Director ||Member |
|3. Mr. Sandeep H. Shah ||Independent Director ||Member |
|4. Mr. Prahaladbhai S. Patel ||Chairman Managing Director & CEO ||Member |
More details on the board and its committees are included in the Corporate GovernanceReport which forms part of this Annual Report.
As on date of this report the Board of Directors of the company has formed a RiskManagement Committee for monitoring and reviewing the risk management plan for the Companyand reconstituted the corporate social responsibility and Stakeholder relationshipcommittee of your company.
16. Directors and Key Managerial Personnel a) Directors
Director retiring by rotation:
In accordance with the provisions of the Act and the Articles of Association of yourcompany Ms. Pooja P Patel (DIN: 07168083) Executive Director of the company retires byrotation at the 12th Annual General meeting and being eligible offers herselffor re-appointment. The board recommends her re-appointment.
Appointment/ Reappointment of Directors:
Pursuant to the provisions of the Companies Act 2013 the members at the 11thAnnual General meeting of the company held on September 18 2019 approved reappointmentof:
Mr. Prahaladbhai S. Patel (DIN: 00037633) as the Chairman Managing Director and CEOof the company for a further period of 5 (five) years with effect from July 9 2020 toJuly 8 2025 on terms and conditions including remuneration as recommended by theNomination and Remuneration Committee and approved by the Board;
Mr. Vasishtha P Patel (DIN: 00808127) Mr. Sandeep H. Shah (DIN: 00807162) andMr. Chirag N. Shah (DIN: 02583300) as the Non-Executive Independent Directors of theCompany not liable to retire by rotation to hold office for a second term of 5 (five)years with effect from September 1 2020 to August 312025.
During the year under review Mr. Sagar P. Patel (DIN: 07168126) and Mrs. Zarana PPatel (DIN: 08580937) were appointed as Executive Director and Non-Executive WomenIndependent Director respectively by Ordinary resolution passed by members through PostalBallot on November 25 2019.
The Board of Directors at its meeting held on August 05 2020 re-appointed Ms. Pooja PPatel (DIN: 07168083) as WholeTime Director designated as an Executive Director of thecompany for a further period of five years effective from September 1 2020 subject toapproval of the members by way of special resolution at the 12th Annual GeneralMeeting. The notice convening the 12th Annual General meeting sets out thedetails of her re-appointment.
Mrs. Shilpaben P Patel (DIN: 02261534) Whole Time Director of the company has resignedfrom the directorship of the company w.e.f. August 05 2020 due to personal reasons. TheBoard places on record its appreciation for her invaluable contribution and guidance.
Declaration by Independent Directors:
All the Independent Directors of your Company have submitted their declarationconfirming that each of them meet the criteria of independence as laid down under Section149 of the Act and the Regulation 16(b) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and that they are not aware of any circumstance orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgment and without anyexternal influence.
The terms and conditions of appointment of the Independent Directors are placed on thewebsite of the company at: (https://www.pspprojects.com/wp-content/uploads/2017/10/Terms-and-Conditions-for- Independent-Directors-22.10.2019.pdf)
Programme for familiarisation of Directors
The details of the Familiarisation Programme imparted to the Independent Directors ofthe company are placed on the website of the company at: (https://www.pspprojects.com/wp-content/uploads/2017/10/Policy-on-Familirisation-Programme-19-20-1.pdf)
None of the Directors of your Company is disqualified under the provisions of Section164(2)(a) and (b) of the Companies Act 2013.
Neither the Managing Director Whole-time Director/ Executive Director of the Companyreceive any remuneration or commission from any of its subsidiaries.
b) Key Managerial Personnel
The following are the Key Managerial Personnel of your Company pursuant to theprovisions of Section 203 of the Companies Act 2013:
Mr. Prahaladbhai S. Patel Chairman Managing Director & Chief Executive Officer
Mrs. Shilpaben P Patel WholeTime Director (Resigned w.e.f. August 05 2020)
Ms. Pooja P. Patel Executive Director
Mr. Sagar P Patel Executive Director (Appointed w.e.f November 1 2019)
Mrs. Hetal Patel Chief Financial Officer
Ms. Mittali Christachary Company Secretary & Compliance Officer.
Except as mentioned above there were no other changes in Directorship of the companyas well as Key Managerial Personnel category during the year under review.
c) Number of meetings of the board and its committees:
During the year under review:
i. Six (6) meetings of the board of directors were held;
ii. Four (4) meetings of the Audit committee were held;
iii. Two (2) meetings of the Nomination and Remuneration committee were held;
iv. One (1) meeting of the Stakeholder relationship committee was held;
v. Four (4) meetings of the Corporate social responsibility committee were held;
vi. One (1) meeting of the Fund Raising committee was held;
Additionally one Separate meeting of the Independent Directors was also held incompliance with the requirements of Schedule IV of the Companies Act 2013 and Regulation25(3) and 25(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015
The intervening gap of the board meetings and audit committee meetings were within theperiod as prescribed under the Companies Act 2013.
As on date of this report the Board of Directors of the company has formed a RiskManagement Committee for monitoring and reviewing the risk management plan for theCompany.
More Details of the meetings of the board and committees are included in the CorporateGovernance report which forms part of this Annual Report.
17. Vigil Mechanism / Whistle Blower
In compliance with the requirements of the Companies Act 2013 SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and SEBI (Prohibition ofInsider Trading) Regulations 2015 your company has framed a Whistle blower policy forits Directors and employees to report genuine concerns and to freely communicate theirconcerns about the illegal or unethical practices and/or instances of leakage ofUnpublished Price Sensitive information. During the year under review no cases has beenreported or investigated under the Whistle Blower policy of the company.
The Whistle Blower Policy of the company is available on the website of the company at:(https://www.pspprojects. com/wp-content/uploads/2017/10/Whistle-Blower-Policy-April-2019.pdf)
18. Director's Responsibility Statement
Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 ('Act') with respect to the Directors' Responsibility Statement theDirectors confirm that:
a) in the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b) 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 of the company for that period;
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 for the financial year ended March31 2020 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 were operatingeffectively; and
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. Auditors & their Reports
a) Statutory Auditors
M/s. Kantilal Patel & Co. Chartered Accountants Ahmedabad (FRN: 104744W) and M/s.Riddhi P Sheth & Co. Chartered Accountants Ahmedabad (FRN: 140190W) were appointedas the Joint Statutory Auditors of your company at the 10th Annual GeneralMeeting held on September 27 2018 for a term of five consecutive years till theconclusion of 15th Annual General Meeting to be held in the year 2023.
Your Company has obtained eligibility certificates from the Joint Statutory Auditorsfor continuing as the Auditors and accordingly they have confirmed that their appointmentis within the limits as specified in section 141 of the Companies Act 2013 and they arenot disqualified from continuing as Statutory Auditors of the Company.
The report of the Statutory Auditor along with Notes to Accounts forms part of thisAnnual report. The Auditors' Report do not contain any qualifications reservations oradverse remarks.
b) Secretarial Auditor:
The Board of Directors had appointed Mr. Rohit S. Dudhela Practicing Company Secretary(COP: 7396) as the Secretarial Auditor to conduct Secretarial Audit for the financialyear 2019-20 under the provisions of section 204 of the Companies Act 2013. TheSecretarial Audit Report is annexed to this report as Annexure C which is self-explanatoryand do not call for any further explanation of the Board of directors.
c) Cost Auditor:
As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and accordingly such accounts are made and records have beenmaintained. M/s. K.V. Melwani & Associates Practicing Cost Accountant (FRN: 100497)carried out the Cost Audit for the financial year under review.
Further as per section 148 read with Companies (Audit and Auditors) Rules 2014 theboard of directors on recommendation of the Audit committee has reappointed M/s. K.V.Melwani & Associates Practicing Cost Accountant (FRN: 100497) as the Cost Auditor ofyour Company for the financial year 2020-21. Your Company has received their consent fortheir reappointment as the Cost Auditors of the Company for the financial year 2020-21. Asrequired under Companies Act 2013 the ratification of the remuneration payable to theCost Auditor is recommended to the members at the ensuing 12th Annual Generalmeeting.
d) Internal Auditor:
Manubhai & Shah LLP Chartered Accountants Ahmedabad (LLP identity No. AAG-0878)continued to be the Internal Auditors of the company under the provision of Section 138 ofthe Companies Act 2013 for conducting the internal audit of the company for the financialyear 2019-20. The Internal Audit Report issued by Manubhai & Shah LLP is submitted tothe Audit Committee and Board of directors.
20. Corporate Social Responsibility
As on March 31 2020 the Corporate Social Responsibility Committee comprised of Mrs.Shilpaben P. Patel WholeTime Director (Chairperson) Mr. Prahaladbhai S. Patel ManagingDirector & CEO (Member) and Mr. Sandeep H. Shah Independent Director (Member) of thecompany.
As Mrs. Shilpaben P. Patel resigned from the directorship w.e.f August 05 2020 theCorporate Social responsibility committee was reconstituted with induction of Ms. Pooja PPatel as the member of the committee and Mr. Sandeep H. Shah as the Chairperson of thecommittee.
Other details regarding CSR Committee has been included in the Corporate GovernanceReport which forms part of this Annual Report.
The Company's total expenditure on CSR activities for the year ended March 31 2020 wasRs. 219.24 Lakhs which is 2.15% of average net profit of last three years computed as perthe provision of the Companies Act 2013.
The Report on Corporate Social Responsibility (CSR) of your company as per Rule 8 ofCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed to the Board'sReport as Annexure D.
The CSR Policy is available on the website of your company at:(https://www.pspprojects.com/wp-content/uploads/2017/09/CSR-Policy-PSPpdf)
21. Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company's operations in future.
However Members attention is drawn to the Statement on Contingent Liabilities andcommitments in the notes forming part of the Financial Statements.
22. Secretarial Standards
Your company complies with all the applicable mandatory Secretarial Standards issued bythe Institute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Companies Act 2013.
23. Management Discussion and Analysis
The Management Discussion and Analysis report for the year under review as stipulatedunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ispresented in a separate section which forms part of this Annual Report.
24. Corporate Governance Report
The Corporate Governance Report pursuant to the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as applicable for the year under reviewtogether with the Certificate from the Practicing Company secretaries regarding complianceof conditions of Corporate Governance is presented in a separate section which forms partof this Annual Report.
25. Business Responsibility Report
A Business Responsibility Report as stipulated under Regulation 34(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended from timeto time detailing the various initiatives taken by the Company from an environmentalsocial and governance perspective is presented in a separate section which forms part ofthis Annual Report.
26. Nomination and Remuneration Policy
The Nomination and remuneration policy for the Directors Key Managerial Personnel andSenior Management Personnel as per Section 178(3) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended from timeto time is available on the website of the Company at: (https://www.pspprojects.com/wp-content/uploads/2017/10/Policy-of-Nomination- and-Remuneration-22nd-October-19.pdf)
We affirm that the remuneration paid to the Executive directors of your company is asper the Nomination and remuneration policy adopted by your company.
27. Performance Evaluation
Based on the criteria prescribed by the Nomination and Remuneration Committee duringthe year under review the board of directors of the company continued to follow a formalmechanism adopted for evaluating its own performance its committees and individualdirectors including the chairman of the board.
The exercise was carried out covering various aspects of the board and its committeessuch as the size structure composition and expertise of the board frequency ofmeetings effective discharge of functions and duties by Board and Committee prescribedunder the law and as per terms of reference in case of the committees ensuring theintegrity of the company's accounting and financial reporting systems independent auditinternal audit and risk management systems (for Board and Audit Committee) working in theinterests of all the stakeholders of the company and such other factors. A separateexercise was carried out for evaluating the performance of individual directors on thebasis of criteria such as attendance and Participation at the Board and CommitteeMeetings integrity and maintaining confidentiality effective deployment of Knowledge andExpertise interpersonal Relationships with other Directors and Management acting in goodfaith and interest of Company as a Whole assist the Company in implementing the goodcorporate governance practices contribution to strategy and relevant aspects impactingcompany's performance protect the interests of all stakeholders and balance theconflicting interest of the stakeholders and such other factors as deemed appropriate.
The Board also considered the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India.
After seeking inputs from individual directors a consolidated report was presentedbefore the board of directors on the basis of which evaluation was done.
In a separate meeting of independent directors performance of non-independentdirectors and the board as a whole was evaluated taking into account the views ofexecutive directors and non-executive directors.
The Directors expressed their overall satisfaction on the evaluation process and thatthe Board the Committees and the Directors are functioning well.
The details about the performance evaluation criteria for independent directors aregiven in the Corporate Governance Report.
28. Particulars of Loans Guarantees or Investments
Details of the loans guarantees investments and securities covered under Section 186of the Companies Act 2013 for the financial year under review are given in the Notes tothe financial statements forming part of this Annual Report.
29. Particulars of contracts or arrangements with Related parties
Your Company has formulated a policy on related party transactions which is availableon the website of the company at:(https://www.pspprojects.com/wp-content/uploads/2017/10/Policy-on-Related-Party-Transactions-April-2019.pdf)
During the year under review prior omnibus approval of the Audit Committee has beenobtained for related party transactions which are of repetitive nature and entered in theordinary course of business and at an arm's length basis. All related party transactionsare placed before the Audit Committee for review and approval.
During the year under review there were no material related party transactions enteredby your Company.
Disclosures on related party transactions as per Indian Accounting Standards on'Related Party Disclosures' are set out in Notes to the financial statements which formspart of this Annual Report.
The disclosure of related party transactions pursuant to Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 during thefinancial year under review in Form no. AOC-2 is annexed to this report as Annexure E.
30. Risk Management
Your company follows a structured approach to manage and mitigate risks. The company'sformal approach/ framework for Risk management is available on the website of the companyat: (https://www.pspprojects.com/wp-content/uploads/2017/10/Risk-Management-Plan.pdf).
As on date of this report the Board of Directors of the company has formed a RiskManagement Committee for monitoring and reviewing the risk management plan for theCompany.
Major risks identified by the company and its mitigating factors has been covered inthe Management Discussion and Analysis Report which is a part of this Annual report.
31. Internal control system and their adequacy
Your company has an Internal Control system commensurate with the size scale andcomplexity of its business operations. The effectiveness of the Internal controls isassessed through periodic reviews by the Audit committee monitoring by the functionalheads and quarterly internal audits by the internal auditor of the company. There were nomaterial or serious observation received from the Internal Auditors of the Company forinadequacy or ineffectiveness of such controls during the period under review.
More details in respect of internal control system and their adequacy are included inthe Management Discussion and Analysis Report which forms part of this Annual report.
32. Policy on prevention of sexual harassment at workplace
The company has in place a Policy for prevention of Sexual Harassment at the Workplacein line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment comprising of two senior women employees one male employeeand one external member. All employees (permanent temporary trainees) are covered underthis policy. During the year under review your company has not received any complaints onsexual harassment.
33. Reporting of frauds
During the year under review the Auditors of the Company have not reported any fraudas specified under the second proviso of Section 143 (12) of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) and hence there is nothing to report by the Board of directors under Section 134(3)(ca) of the Companies Act 2013.
34. Particular of employees
The information pertaining to Section 197(12) read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time is annexed to this report as Annexure F.
35. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The Particulars of Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo as required under Section 134(3)(m) read with Rule 8 of the Companies(Accounts) Rules 2014 is annexed to this report as Annexure G.
Your Board of directors places on record their sincere appreciation to employees at alllevels for their hard work dedication cooperation and commitment during the year.
Your board of directors also conveys its appreciation for its shareholders clientsvendors suppliers banks government and regulatory authorities and stock exchanges fortheir continued support.
| ||For & on behalf of the Board of Directors |
| ||Prahaladbhai S. Patel |
|Ahmedabad ||Chairman & Managing Director |
|August 5 2020 ||(DIN: 00037633) |