1. Considering the Operations and Net worth of the Subsidiaries, the Company has created provision for its Investments and Advances in subsidiaries and has been recorded in "Other expenses" in the Statement of Profit and Loss. (Refer Note 34)
2. On account of restructuring, the Company has divested stake in the following subsidiaries: (Refer Note 48)
i) PVP Global Ventures Private Limited
ii) PVP Media Ventures Private Limited
iii) New Cyberabad City Projects Private Limited
Consequent to the above, the provisions created on the investment made in the erstwhile subsidiaries have been written back and has been recorded as Exceptional (Gain)/ Loss in the Statement of Profit and Loss. (Refer Note 35.1)
The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder is entitled to one vote per equity share. Dividends are paid in Indian Rupees. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders at the Annual General Meeting, except in the case of interim dividend.
In the event of liquidation of the Company, the holder of the equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amount.
(a) The Company has not allotted any shares without payment being received in cash.
(b) The Company has not allotted any bonus shares.
(c) The Company has not bought back any shares during the aforesaid period.
Securities premium is used to record the premium on issue of securities. The reserve is utilised in accordance with the Section 52 of the Act.
The Company has issued redeemable non-convertible listed debentures. Accordingly, the Companies (Share Capital and Debentures Rules, 2014 (as amended)), requires the Company to create Debenture Redemption Reserve (DRR) out of profits of the Company. During the financial year 2018-19, DRR amounting to Rs.150 lakhs has been created out of profits. During the year ended 31 March 2023, the DRR amounting to Rs. 150 Lakhs has been transferred to General Reserve since the debentures are redeemed. (Refer Note 45(a)).
Surplus in Statement of Profit and Loss represents Company's cumulative earnings since its formation less the dividends / capitalisation, if any. These reserves are free reserves which can be utilised for any purpose as may be required.
Fair value gain / (loss) on equity investments classified as FVTOCI reserve has been created on account of change in fair value of the investments. The Company has not provided the tax impact on Fair value changes on investment in equity shares held as FVTOCI considering that no future capital gains in the next 8 years might be available to offset the loss. (Refer Note 49)
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. The general reserve is created by transfer of one component of equity to another and is not an item of other comprehensive income.
The Company had allotted 13,289 Convertible Debentures of Rs. 100,000 each redeemable / convertible into equity shares at Rs. 204 each as per scheme of amalgamation dated 25 April 2008, sanctioned by Honorable High Court of Madras between SSI Limited and the Company. (Refer Note 45(b))
Vehicle Loans are secured by way of hypothecation of respective vehicles at an interest rate of 8.86% p.a. and repayable in 5 years in monthly installments.
Vehicle Loans are secured by way of hypothecation of respective vehicles at an interest rate of 8% - 10.91% p.a. and repayable in 5 years in monthly installments.
The Company, at the inception of a contract assesses whether a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
In adopting Ind AS 116, the Company has applied the below practical expedients:
(i) The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
(ii) The Company has treated the leases with remaining lease term of less than 12 months as if they were ""short term leases"".
(iii) The Company has not applied the requirements of Ind AS 116 for leases of low value assets.
(iv) The Company has excluded the initial direct costs from measurement of the right-of-use asset at the date of transition."
The Company has taken land and buildings on leases having lease terms of more than 1 year to 9 years, with the option to extend the term of leases. Refer Note 4.2 for carrying amount of right-to-use assets at the end of the reporting period by class of underlying asset.
The amounts shown under contingent liabilities and disputed claims represent the best possible estimates arrived at on the basis of the available information. Further, various government authorities raise issues/clarifications in the normal course of business and the Company has provided its responses to the same and no formal demands/claims has been made by the authorities in respect of the same other than those pending before various judicial/regulatory forums as disclosed above. The uncertainties and possible reimbursement in respect of the above are dependent on the outcome of the various legal proceedings which have been initiated by the Company or the claimants, as the case may be and, therefore, cannot be predicted accurately.
(i) During the year ended 31 March 2023, the Company has opted for beneficial tax rate under Section 115BAA of the Income Tax Act, 1961. In accordance with Section 115BAA of the Income Tax Act, 1961, the Company is not eligible to carry forward the Minimum Alternative Tax credit recognised under Section 115JB of the Income Tax Act, 1961 and has consequently written off the MAT credit recognised in books as on 31 March 2022 amounting to Rs. 941.74 Lakhs as a part of deferred tax expense in the year ended 31 March 2023.
(ii) Finance cost includes Rs. 225.95 Lakhs accounted for the year ended 31 March 2024 representing the interest payable on an estimated basis under Section 234B and Section 234C of the Income Tax Act, 1961 consequent to the determination of the tax payable for the year ended 31 March 2023 based on the return of income filed during the FY 23-24 and the non-remittance of the determined net tax liability amounting to Rs. 1,325.24 Lakhs to the department of Income Tax. On account of the challenges related to working capital, the tax liability and the corresponding interest remains to be outstanding. However, the Management believes that the payment of outstanding tax liability along with the interest will be made upon receipt of advances from other joint developers/ receipt of Interest Free Security Deposit (IFSD) from Brigade (Refer Note 33 & 44.3)
During the year ended 31 March 2024, the Company has recognised deferred tax asset in accordance with Ind AS - 12. Deferred tax assets are recognized for all deductible temporary differences, carry forward losses, to the extent that it is probable that taxable profit will be available against which those deductible temporary differences can be utilized:
Certain short-term loans taken from related parties have been repaid during the year while a new vehicle loan has also been availed. The Company has issued 15,350,980 equity shares pursuant to conversion of Convertible Debentures and acquisition of Humain Healthtech Private Limited thereby leading to increase in equity and in securities premium. Further, the Company had divested stake in its subsidiaries, consequent to which provision created for investments in subsidiaries and gain/loss on sale of investments are recorded as exceptional item leading to increase in other equity.
During the year, the Company has availed a new vehicle loan against the hypothecation of the respective vehicles. The Company has issued 15,350,980 equity shares pursuant to conversion of Convertible Debentures and acquisition of Humain Healthtech Private Limited thereby leading to increase in equity and in securities premium. Further, the Company had divested stake in its subsidiaries, consequent to which provision created for investments in subsidiaries and gain/loss on sale of investments are recorded as exceptional item leading to increase in other equity.
1. Finance cost is excluding interest on short term borrowings. Further, interest on late filing of GST returns / TDS returns included as part of finance cost have been excluded for the computation of Debt Service Coverage Ratio
2. Expected interest outflow on long term borrowings and principal repayments represent the expected outflows until 31 March 2025 / 31 March 2024 (one year from the Balance Sheet date)
3. Includes certain components of exceptional items and provision for diminution in value of assets
4. Tax effect has not been provided in the current year since no tax impact has been given in the financial statements w.r.t capital loss incurred on sale of investments
Company has availed long term loan during the year ended 31 March 24 for which the repayment shall start during the FY 24-25 hence, principal and interest payments have increased.
The Company has issued 15,350,980 equity shares pursuant to conversion of Convertible Debentures and acquisition of Humain Healthtech Private Limited thereby leading to increase in equity and in securities premium. Further, the Company had divested stake in its subsidiaries, consequent to which provision created for investments in subsidiaries and gain/loss on sale of investments are recorded as exceptional item leading to increase in other equity.
Since the Company is into real estate business, the cash flows from operating activites are not regular. In certain cases the amounts are deposited in the escrow accounts by the developers which is released to the Company on fulfillment of certain conditions. Hence during the FY 2023-24, majorily the amounts are deposited in escrow accounts (Refer Note 44.4) as security deposits and there was no direct sale of land and hence no corresponding cash flows. As a result the Company had faced crunched liquidy and was able to discharge its liabilities with delay, hence resulting in decrease in Trade payable turnover ratio.
On account of restructuring, the Company had divested its stake in New Cyberabad City Projects Private Limited (erstwhile subsidiary, now a related party) and the loans advanced have been reclassified from Investment to Loan resulting in capital employed increasing in the financial year 2023-2024. Further Nil sales during the year has reduced the profits.
k) Return on Investment = Net profit after tax / average equity - Not Applicable as return on investment can be given only project wise and not for the Company as a whole
(a) The amount of transactions disclosed above is without considering Goods and Services Tax (wherever applicable, irrespective of whether input credit has been availed or not) as charged by/to the counter party as part of the invoice/ relevant document and is gross of withholding tax under the Income Tax Act,1961
(b) The amount of payables/receivables indicated above is after deducting Tax (wherever applicable) and after including Goods and Services Tax (wherever applicable) as charged by/to the counter party as part of the invoice/relevant document.
(c) The Company accounts for costs incurred by / on behalf of the Related Parties based on the actual invoices / debit notes raised and accruals as confirmed by such related parties. The Related Parties have confirmed to the Management that as at 31 March 2024 and 31 March 2023, there are no further amounts payable to / receivable from them, other than as disclosed above. The Company incurs certain costs on behalf of other Companies in the group. These costs have been allocated/recovered from the group Companies on a basis mutually agreed to with the group Companies.
(d) The aforesaid transactions are disclosed only from the date / upto the date, the party has become / ceases to become a related party to the Company.
(e) The remuneration payable to key management personnel is determined by the Nomination and Remuneration committee having regard to the performance of individuals and market trends.
(f) As the liabilities for gratuity are provided on actuarial basis for the Company as a whole, the amounts pertaining to KMP are not included above.
(g) The following amounts as disclosed above, are presented at the undiscounted amount and not at amortised cost as carried in the Financial Statements.
i) Loans advanced to NCCPL (erstwhile subsidiary of the Company) (Refer Note 52)
ii) Sale Consideration Receivable from PHML (erstwhile subsidiary of the Company) on account of sale of NCCPL (Refer Note 48)
44 Development Agreements
The Company, being the Landowner has signed a JDA on 6 April 2011 with the Developer, North Town Estates Private Limited for development of land of measuring 70 Acres (approx.) (1,259.90 grounds). The Company had terminated the Joint Development Agreement (JDA) on 23 March 2022. The developer has constructed an extent of 34 Acres of land in phases consisting of Ananda, Brahma, Chetna, Ekanta and Gulmohar. The developer has completed the phases Viz. Ananda, Brahma, and Gulmohar in its entirety and portion of Chetna and Ekanta except 5 blocks in Chetna and 1 block in Ekanta which forms part of the terminated portion.
44.1 The Company has entered into a JDA with Rainbow Foundations Limited on 23 March 2022 for developing 5 blocks in Chetna and 1 block in Ekanta. Rainbow Foundations Limited has furnished a refundable security deposit of Rs. 643.10 Lakhs (Rs. 688.89 Lakhs as on 31 March 2023) and Rs. 3,361.91 Lakhs (Rs. 2,716.11 Lakhs as on 31 March 2023) as an Advance which shall be set off from the Company's share of receivables, proportionately from every sale of apartments as per the JDA.
44.2 During the year ended 31 March 2023, the Company had sold 8 acres of Land to Casagrand Zingo Private Limited and had entered in a joint development agreement with Casagrand Builder Private Limited on 27 June 2022 for development of additional 12 acres of land. Casagrand Builder Private Limited has furnished an interest free refundable security deposit of Rs. 3,000 Lakhs.
44.3 During the current year, the Company had entered into a JDA dated 21 February 2024 with Brigade Enterprises Limited ("Brigade") to jointly develop a residential project on the land owned by the Company in Chennai. Consequent to the above, the Company has received an amount of Rs. 200 Lakhs as an IFSD. Further an amount of Rs. 4,800 Lakhs has been deposited in an escrow account by Brigade which shall be released to the Company as IFSD along with interest accrued thereon upon fulfilment of certain conditions as stated in the JDA.
The Company believes that until fulfilment of such conditions, the aforesaid escrow account balance (asset) as well as the corresponding security deposit from Brigade (liability) shall not form part of the Balance Sheet and hence is not required to be accounted.
45 Terms of Loan and its repayment a) Non-Convertible Debentures
The Shareholders, in the Annual General Meeting (AGM) dated 10 September 2018, had authorised to issue 1,950 listed, (rated, secured), redeemable Non-Convertible Debentures (NCDs) of Rs. 10 Lakhs each for an aggregate amount of Rs. 19,500 Lakhs, out of which the Company has issued Tranche A 386 Debentures aggregating to Rs. 3,860 Lakhs and Tranche B of 829 Debentures aggregating to Rs. 8,290 Lakhs which were, subscribed and paid up as per the Debenture trust deed dated 16 June 2017 totaling to Rs.12,150 Lakhs listed in BSE Limited. Debentures amounting to Rs. 7,350 Lakhs have remained unissued. The Company has made partial reduction in face value of Non-Convertible Debenture Tranche A from Rs 10 Lakhs per NCD to Rs 6.434 Lakhs per NCD. The reduction in face value was intimated to National Securities Depository Limited (""NSDL"") vide letter dated 2nd February 2022. During the year ended 31 March 2023, the Company has made partial reduction in face value of NCD Tranche B from Rs. 10 Lakhs to Rs. 0.68 Lakhs per NCD. The reduction in face value was intimated to the NSDL vide letter dated 4 July 2022.
The Company has repaid an amount of Rs.11,778.50 Lakhs towards principal payments of NCD (Tranche A & B). The Company has obtained a waiver of principal of Rs. 371.50 Lakhs on NCD (Tranche B) and interest accrued amounting to Rs.7,445.54 Lakhs on NCD (Tranche A & B) by virtue of a One Time Settlement with its debenture holder vide a mail dated 10 August 2022 and the debentures were delisted from the BSE Limited vide BSE's confirmation letter dated 6 March 2023. This is classified as an exceptional item (Refer note 35).
The debentures and the debenture payments were secured by:
(i) English mortgage of all the rights on piece and parcel of the land located at Door No.8/8D, Stephenson Road, Perambur, Chennai measuring 9.154 acres.
(ii) First Charge exclusive basis on all rights titles interest and benefits of the Company in respect of the JDA, JDA Escrow Agreement, JDA Escrow Account and JDA Receivables excluding the outstanding security deposit.
(iii) A first ranking exclusive over security interest in debentures held by the Company amounting to Rs. 1,421.37 Lakhs in Blaster Sports Ventures Private Limited.
(iv) Non-disposal undertaking from Platex Limited for their share in the Company.
(v) Personal Guarantee of Promoter (Mr. Prasad V Potluri).
(vi) Interest payable is 18% p.a. The first payment is due on first year from the date of issuing debentures and thereon payable on quarterly basis.
(vii) The debentures shall be redeemed at par value on the redemption date.
b) Convertible Debentures
CD were issued upon receipt of the final installment of proceeds pursuant to the Subscription Agreement entered on 11 January 2007 and 21 February 2007 respectively. In 2008, The Hon'ble High Court of Madras approved the scheme of amalgamation between PVP Ventures Private Limited ("Amalgamating Company") and M/s SSI Limited ("Amalgamated Company") vide the order dated 25 April 2008. The Amalgamated Company was subsequently renamed as M/s PVP Ventures Limited ("the Company").
The Debentures will bear interest at the rate of 14.5% per annum. Interest on Debentures is payable semi-annually in arrears on 15 June and 15 December each year. Interest shall accrue on the overdue sum at the rate of 2 % per annum over and above the Interest Rate (the Default Interest Rate) from the due date. The Company had sought time from the debenture holder to pay the outstanding interest vide its letter dated 24 May 2022.
The Debenture Holder has exercised the option to convert the CD's into equity shares of the Company vide letter dated 19 April 2023 which was subsequently approved in the Board Meeting held on 28 April 2023. Further to the above, the Company has obtained waiver from the Debenture holder during the year ended 31 March 2024 for waiver of interest from 01 April 2023 to 28 April 2023 amounting to Rs. 55.62 Lakhs vide email dated 19 May 2023. Pursuant to the above conversion, the debenture holder is entitled to 2,450,980 equity shares of the Company at a per share price of Rs. 204 against the CD outstanding amount i.e. Rs. 5,000 Lakhs. Accordingly, the share capital and securities premium has been increased by Rs. 245.10 Lakhs and Rs. 4,754.91 Lakhs respectively for the year ended 31 March 2024. (Refer Note 17.1)
46 Corporate Guarantee given to Subsidiary Company
The Company had mortgaged its land situated at Perambur, Chennai, as a security and had furnished corporate guarantee to a bank for the borrowings amounting to Rs. 10,000 Lakhs availed by one of its step-down subsidiary, PVP Capital Limited (PVPCL). The outstanding loan amount as per the books of accounts of PVPCL, as on 30 June 2022, including outstanding interest is Rs 24,097.52 Lakhs. The loanee i.e., PVPCL, has not adhered to repayment schedule of principal and interest dues to the bank. Consequently, the bank had filed for recovery of its dues before the Debt Recovery Tribunal (DRT) and had also initiated recovery proceedings against the Company under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002).
PVPCL had applied for One Time Settlement (""OTS"") to the bank with respect to the outstanding due amount (including principal and interest). The OTS was accepted by the bank vide letter dated 15 March 2022. The lender bank has agreed for OTS of Rs 9,500 Lakhs. PVPCL had remitted Rs. 900 Lakhs before 31 March 2022 and the balance of Rs 8,600 Lakhs (towards OTS approved amount) & Rs. 33.36 Lakhs (interest for delayed payment of balance OTS approved amount) was remitted by the Company on 30 June 2022, being a principal guarantor to the loan. This is classified as an exceptional item. (Refer Note 35)
The Company had not created any provision for expected credit loss in the prior years upto 31 March 2022 towards the aforesaid guarantee provided under the expected credit loss model prescribed under Indian Accounting Standard - 109 -Financial instruments prescribed under the Rules.
47 Segment Reporting
The Company publishes these financial statements along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information only in the consolidated financial statements.
48 Divestment in Subsidiaries
The Company has entered into an Share Purchase Agreement (""SPA"") dated 06 October 2023 with PV Potluri, a related party for sale of its 100% stake in 2 wholly owned subsidiaries i.e. PVP Global & PVP Media and with PHML, a related party for sale of its 100% stake i.e. 81% held by it in its subsidiary NCCPL for consideration payable in cash determined based on the valuation report under Rule 11UA of the Income Tax Rules, 1962 obtained from an independent registered valuer.
The Company had obtained approval from its Board of Directors in the board meeting held on 24 August 2023 for the aforesaid transaction. The Members of the Company vide Postal Ballot dated 30 September 2023 approved the divestment of 100% stake in the above subsidiaries. As a result of divestment, the provision created on the investments made in the subsidiaries by the Company have been written back in the books of account. The write back of provision has been treated as an exceptional item. (Refer Note 35)
The Company has carried the same at amortized cost as at 30 June 2024 in accordance with the requirements of Ind AS-109. Accordingly, the Management has discounted the said receivable considering the discount rate of 8% over an estimated repayment period of 10 years from October 2023. Further, the consideration receivable from PHML for sale of NCCPL is not subject to any interest on the outstanding amount. PHML along with its subsidiaries (PVP Cinema Private Limited and PVP Capital Limited) have a negative net worth, continuing losses. These aspects coupled with other related factors indicate that there is an existence of material uncertainty that will cast significant doubt on PHML's ability to continue as a going concern. Though PHML is not carrying any significant business activity and there are challenges related to liquidity and Going Concern, the Management is confident of recovering the receivable within the agreed tenor of October 2033, considering the business plan of its subsidiary, NCCPL as stated in the Note 51 below and has assessed that there is no necessity to create an allowance for expected credit loss under Ind AS - 109.
49 Loss of Control in Picture House Media Limited
The Company holds 3,321,594 shares in PHML directly. Additionally, the Company used to hold 23,536,291 shares until six months ended 30 September 2023 through its erstwhile subsidiaries (PVP Global & PVP Media). Upto 30 September 2023, the investment in PHML was shown at cost as per the principles of Ind AS - 27 as it was a subsidiary of the Company. Pursuant to the restructuring highlighted in Note 48, PHML has ceased to become a subsidiary and the investments have been carried at market value i.e. FVTOCI. Though the Company has lost its control in PHML, the shares are not held for purpose of trading. Hence, the investment in PHML shall be measured at FVTOCI - as per Ind AS-109 and the corresponding Gain / Loss is recognised in the OCI.
The Company had also created provision on the investment made in PHML amounting to Rs. 492.84 Lakhs. The same has been written back and treated as an exceptional item for the quarter and year ended 31 March 2024. (Refer Note 35)
50 Acquisition of Subsidiary
The Company has entered into an SPA dated 06 October 2023 with PV Potluri and Humain Healthtech Private Limited (""HHT"") for purchase of 100% of Shares of HHT from PV Potluri for consideration determined based on the valuation report obtained from an independent registered valuer for consideration payable partly in Cash and partly in Shares of the Company.
The Company had obtained approval from its Board of Directors in the board meeting held on 24 August 2023 for the aforesaid transaction and in-principle approval from NSE & BSE to issue 12,900,000 equity shares of Face value of Rs. 10 each to PV Potluri for consideration other than Cash (i.e. shares of HHT). The Members of the Company vide Postal Ballot dated 30 September 2023 approved the acquisition of 100% stake in HHT for consideration partly in Cash and partly through issue of shares of the Company. Pursuant to the approval of the Shareholders, the above mentioned shares were issued on a preferential basis to PV Potluri and the shares were allotted through a circular resolution by the Board of Directors on 06 October 2023. Accordingly, the share capital and securities premium has been increased by Rs. 1,290 Lakhs and Rs. 267.80 Lakhs respectively in the year ended 31 March 2024. (Refer Note 17.1)
Though the Consolidated Net worth of the acquired subsidiary is negative and despite various other factors such as significant reduction in the actual sales & Profit after Tax of HHT at Standalone and Consolidated level as against the estimated numbers considered for valuation also impacted by suspension of operations at one of its centres, the Management believes that considering the future business projections, estimated cash flows of the subsidiary and the support intended to be provided by the Company no provision is required to be created against the investment in HHT for the year ended 31 March 2024.
51 Loans advanced to New Cyberabad City Projects Private Limited
The Company had invested in 24,832; 22% Secured Redeemable Non-Convertible Debentures of Rs. 100,000 each issued by New Cyberabad City Projects Private Limited (NCCPL), erstwhile subsidiary and currently a related party of the Company. Further, on 16 March 2015 the said investment of Rs. 24,832 Lakhs in debentures was converted to an Interest Free Secured loan against the security of Land owned by and Land development rights available with NCCPL repayable on 31 March 2017 which was further extended by 10 years to 31 March 2027. A further extension of 1 year until 31 March 2028 was granted vide supplementary agreement dated 07 February 2024. The outstanding loan amount as on 31 March 2024 is Rs. 21,843.49 Lakhs.
Further there are challenges associated with the enforceability and market value of security including but not limited to
i) Attachment of land owned by Adobe Realtors Private Limited, Arete Real Estate Developers Private Limited, Expressions Real Estate Developers Private Limited (erstwhile stepdown subsidiaries of the Company and currently related parties) by Securities and Exchange Board of India ("SEBI") and Enforcement Directorate ("ED"), who have granted development rights to NCCPL and (Details w.r.t attachment of land by SEBI & ED have been provided below)
ii) Enforceability of General Power of Attorney ("GPA") provided by the landowners to a third party from whom NCCPL has obtained the development rights.
Further, the NCCPL is in the process of digitization of its land records as required in the State of Telangana.
Though NCCPL is not carrying any business activity, based on the below mentioned factors, the Company believes that while there could be a further extension beyond the stipulated date of 31 March 2028, the amounts are fully recoverable and hence there is no necessity to create an allowance for expected credit loss.
i) Market value of a nearby land serving as a proxy to the land over which development rights held by NCCPL.
ii) Business plans of NCCPL to monetise the land bank by developing residential and/or commercial properties.
iii) Enforceable clause in the SPA (Refer Note 52 below) which provides the first priority repayment of the loan based on the cash flows to be generated out of the project to be developed as stated in (ii) above. Additionally, the Company is guaranteed 50% payout from the revenues generated in excess of the loan outstanding, out of the sale/development of the aforesaid properties.
The Company believes that the provisions of Section 186(1) & 188 of the Act have been complied with to the extent applicable.
Further based on internal assessment/professional opinion received in this regard, the other provisions of Section 186 of the Act in respect to loans, making investments, providing guarantees and securities are not applicable to the Company as it is involved on the business of providing infrastructural facilities.
PVP Global Ventures Private Limited (PVP Global), Mr. Prasad V. Potluri and the Company received Orders from Adjudicating Officer dated 27 March 2015 for non-compliance of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and SEBI (Prohibition of Insider Trading) Regulations, 1992. PVP Global, Mr. Prasad V Potluri and PVP ('the appellants"") filed appeals before the Securities Appellate Tribunal (SAT) challenging the orders of Adjudicating Officer.
SAT vide order dated 20 June 2018 reduced the penalty of Rs. 1,530 Lakhs on Mr. Prasad V Potluri to Rs. 515 Lakhs and upheld the penalties of Rs. 1,500 Lakhs imposed on PVP Global and Rs.15 Lakhs on the Company. Hence, miscellaneous Applications dt. 02 July 2018 were filed before the Honourable SAT for staying its order for which the SAT granted 6 weeks' time to appeal with Honourable Supreme Court. Also on 06 July 2018, as Security, the appellants deposited Original Title deeds of Land held by its subsidiaries for realization and payment of the aforesaid demand. Civil appeal dated 16 August 2018, was filed before the Honourable Supreme Court, which was dismissed on 14 September 2018, and the SAT Orders were upheld. A demand was raised by the Recovery Officer, SEBI, dated 26 October 2018 with Interest from, 27 March 2015, the date of order from Adjudicating Officer. The appellants filed review petitions before the Honorable SEBI/SAT, Mumbai on 10 November 2018 and 21 November 2018, stating technical and legal reasons, that the final SAT order was dated 20 June 2018, whereas the Interest was calculated since 2015 and the orders dated 27 March 2015 and 28 June 2018 are silent on levy of interest.
SEBI initiated attachment proceedings on 19 November, 2018 of the Demat Accounts and Bank accounts of the three appellants. The Company has paid penalty of Rs.15 Lakhs. However the interest of Rs. 6.45 Lakhs has been remitted under protest on 07 December 2018 and the freezing of accounts was lifted. SAT dismissed the PVP Global's appeal on interest in April 2019. PVP Global has appealed with the Honorable Supreme Court and received Stay Order dated 12 July 2019 for payment of Interest. The appellants have written to SEBI, requesting to keep the order on record and to keep the recovery proceedings in abeyance.
Further, Adobe Realtors Private Limited, Arete Real Estate Developers Private Limited and Expressions Real Estate Private Limited subsidiaries of PVP Global, have provided land parcel as security deposit towards penalty amount against the SEBI s penalty order for Insider Trading. PVP Global has not remitted the disputed interest till date.
52 Accounting of Loans advanced to New Cyberabad City Projects Private Limited
The Company was treating the aforesaid loan as deemed investment in subsidiary and hence was carrying the same at cost until 31 March 2023. Consequent to NCCPL ceasing to be a subsidiary as highlighted above, the Company has carried the same at amortized cost as at 31 March 2024 in accordance with the requirements of Ind AS-109 - Financial Instruments. Accordingly, during the year ended 31 March 2024, the Management has carried the loan at present value by discounting the future cash flows at a rate of 8% over an estimated repayment period of 8.5 years (considering the possibility of further extension as stated above as against the balance legal tenor of 4 years).
The Company operates a gratuity plan covering qualifying employees. The benefit payable is the amount calculated as per the Payment of Gratuity Act, 1972. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The gratuity scheme of the Company is unfunded.
In respect of the above plans, the actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at 31 March 2024 and 31 March 2023 by an independent member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method.
(i) The estimate of future salary increase takes into account inflation, seniority, promotion and other relevant factors.
(ii) Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below has been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The result of sensitivity analysis is given below:
(i) The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
(ii) Furthermore, in presenting the above sensitivity analysis the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance Sheet.
(iii) There is no change in the methods and assumptions used in preparing the sensitivity analysis from the prior years.
The Company has not provided specifically any funds for the payment of the Benefits of the Plan to the employees but creates a liability every year in the books of accounts. Every year, the Company carries out a funding valuation based on the latest employee data.
The management assessed that fair value of cash and cash equivalents, trade receivables, loans, borrowings, trade payables
and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities
of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair value / amortized cost:
(a) Long-term fixed-rate borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual losses and creditworthiness of the receivables
(b) The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non-current financial liabilities are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
(c) The fair value of investment in quoted Equity Shares is measured at quoted price, and the fair value changes are routed through OCI.
(d) Fair values of the Company's interest-bearing borrowings and loans are determined by using discounted cash flow (DCF) method using discount rate that reflects the issuer's borrowing rate as at the end of the respective reporting period. The own non-performance risk as at 31 March 2024 and 31 March 2023 was assessed to be insignificant.
The Company's treasury function provides services to the business, co-ordinates access to financial markets, monitors and manages the financial risks relating to the operations of the Company. These risks include market risk (including interest rate risk and other price risk) and credit risk.
The Company has not offset financial assets and financial liabilities.
The Company's activities are exposed to finance risk, interest risk & credit risk. Market risk exposures are measured using sensitivity analysis. There has been no change to the Company's exposure to market risks or the manner in which these risks are being managed and measured.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Long term borrowings of the company bear fixed interest rate. Thus, interest rate risk is limited for the company.
The Company's non-listed equity securities are not susceptible to market price risk arising from uncertainties about future values of the investment securities. Hence the company does not bear significant exposure to Equity price risk in unquoted investment in subsidiaries.
Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.
This balance primarily constitute of employee advances and the Company does not expect any losses from nonperformance by these counter parties. These also includes loans provided to related parties (erstwhile subsidiaries). (Refer Note 52)
The Company held cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.
Other financial assets comprises of rental deposits given to lessors, lien marked bank deposits (due to mature within and after 12 months from the reporting date), interest accrued on fixed deposits and debentures. The fixed deposits are held with credit worthy banks and financial institutions. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk. This also includes sale consideration receivable from Picture House Media Limited on account of sale of NCCPL. (Refer Note 48)
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching maturing profiles of financial assets and financial liabilities in accordance with the risk management policy of the Company. The Company invests its surplus funds in bank fixed deposits and mutual funds.
The following table detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table below represents principal and interest cash flows. To the extent that interest rates are floating, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.
55 Other Statutory Information
a) No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made there under.
b) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiary
c) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
d) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
e) The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (as per the Act) , which are repayable on demand or without specifying any terms or period of repayments other than the deemed investments in the subsidiaries.
f) There are no transactions with the Companies whose name are struck off under Section 248 of the Act.
g) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
h) The Company has complied with the number of layers prescribed under Section 2(87) of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
i) No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Act.
j) The Company has not been declared a willful defaulter by any bank or financial institution or other lender.
k) The Company has utilised the borrowing amount taken from banks for the purpose as stated in the sanction letter.
l) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
m) As per Section 128 of the Act and Rule 3 of the Companies (Accounts) Rules, 2014, the Comoany is required to have an audit trail feature as part of the accounting software being used. During the year ended 31 March 2024, The Company has used an accounting software for maintaining its books of account, which has a feature of recording audit trail (edit log) facility. However, the same has not been enabled during the year ended 31 March 2024. The Company is in discussions with the service providers w.r.t. the enabling of audit trail feature in the accounting software.
56 Foreign Exchange Management Act, 1999
The Company is in the process of assessing its compliances under the Foreign Exchange Management Act, 1999 ("FEMA Act") and in the process of filing the required documents/condonation applications as may be required with the designated authority in connection with certain transactions with foreign parties relating to issuance/transfer/change of terms of convertible debentures. The Company is confident of completing all the required formalities and obtaining the required approval/ratification from the designated authority. Further, the Company is consistently reviewing and monitoring its existing processes to ensure compliance with the provisions of FEMA Act. The Management has assessed that for the year ended 31 March 2024, the Company has no material non-compliance with the aforesaid Act and that impact of any past non-compliance, if any shall be dealt as and when it arises and such non-compliance shall not have material impact on the Financial Statements.
57 Securities Exchange Board of India (SEBI) Regulations and Companies Act, 2013
The Company is in the process of assessing its compliances under the Act and the Listing Regulations including corrective action required w.r.t. exceptions / qualifications highlighted by the secretarial auditor in their report for the year ended 31 March 2023. The Company is in the process of filing the required documents / condonation /compounding / adjudication of penalty applications as may be required with the designated authority. The Management is confident of completing all the required formalities and obtaining the required approval/ratification from the designated authority. Further, the Company is consistently reviewing and monitoring its existing processes to ensure compliance with the provisions of the Act and the Listing Regulations. The Management has assessed that for the year ended 31 March 2024, the Company has no material non-compliance with the aforesaid Act/ Regulations and that impact of any past non-compliance, if any shall be dealt as and when it arises and such non-compliance shall not have any material impact on the Financial Statements.
58 The figures of the Standalone Statement of Profit and Loss as per the financial statements is not in line with the figures reported in the results under Regulation 33 of Listing Regulations on account of recasting of numbers/ certain reclass entries. However, the same shall not have a material impact on the Financial Statements.
60 Approval of Financial Statements
In connection with the preparation of the Standalone Financial Statements for the year ended 31 March 2024, the Board of Directors have confirmed the propriety of the contracts / agreements entered into by / on behalf of the Company and the resultant revenue earned / expenses incurred arising out of the same after reviewing the levels of authorisation and the available documentary evidences and the overall control environment. Further, the Board of Directors have also reviewed the realizable value of all the current assets of the Company and have confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognised in the standalone financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in the Standalone Financial Statements. The Board, duly taking into account all the relevant disclosures made, has approved these Standalone Financial Statements at its meeting held on 28 May 2024. The shareholders of the Company have the rights to amend the Standalone Financial Statements in the ensuing Annual general meeting post issuance of the same by the Board of directors.