i) Fair Value of the Company's investment properties
The investment properties consist of 54 No's commercial properties in India.
As at 31 March, 2024 and 31 March, 2023 the fair values of the properties are Rs. 3,286.66 lakhs and Rs. 3,371.70 lakhs respectively as estimated by the Management based on sale comparable method which compares the price or price per unit of similar properties being sold in the market place and adjusted to discounts as estimted by the Management.
The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Significant intangible assetsa. Assets on Build-operate-transfer (BOT) basis
Intangible assets comprises buildings constructed on 'Build-operate-Transfer' (BOT) basis. The company has unconditional right to use/lease such assets during the specified period. After expiry of specified period, these assets will get transferred to licensor without any consideration. Since, the Company has no ownership rights over these assets and has limited right of use during the specified period, these assets are classified as intangible assets.
b. intangible assets under development
Intangible assets (BOT) which are not ready for intended use as on the date of Balance Sheet are disclosed as 'Intangible assets under development'
b. *Projects temporarily suspended
The Company has entered into concession agreements with Delhi Metro Rail Corporation Limited (DMRC) for various projects on Build-Operate-Transfer (BOT) basis.
In case of one project, viz. Welcome Mall, construction activities had to be suspended as the property development area allotted to the Company was infringing the proposed line of Metro Station to be constructed by DMRC under phase III. Consequently, the construction activities could not be restarted due to DMRC's inability to provide necessary clarifications regarding FAR availability on the property development area and final approved revised layout plan from MCD. The Company has invoked the Arbitration clause under the concession agreement. The Arbitral Tribunal has pronounced the Award and as per the Award, the Arbitral Tribunal has partly allowd the claims sought by the company and rejected all the counter claims sought by DMRC. The company is in the process of filing appeal against the Award for further allowing the claims of the Company.
In case of another project situated at Azadpur Metro Station, construction activities had to be suspended because due to delays in payment to DMRC, DMRC has issued a letter for termination of contract with the company. The company has invoked the Arbitration clause under the concession agreement and the arbitration proceedings are going on.
Hence, construction activities of the above projects classified as 'Intangible assets under development' have been temporarily suspended. As a result, the estimated expenses to be incurred on the projects amounting to Rs. 12,289.51 lakhs (previous year Rs. 6,821.88 lakhs) shall also remain suspended till conclusion of legal proceedings. Therefore, the disclosure in the required format as per Schedule III is not ascertainable and is not disclosed.
* Investment in these shares are subject to non disposal undertakings furnished in favour of Investors for investments made in the respective companies.
# Parsvnath Rail Land project Private limited is considered as a Subsidiary on the basis of voting Power in the said Company.
@ 49% of the Equity Shares are pledged with non-banking financial companies / debenture trustees towards securities against loans taken / debentures issued.
€ 71,916 shares out of 1,20,000 are pledged as a security for Term Loan from NBFC.
$ The securities have been pledged with non-banking financial companies / debenture trustees towards securities against loans taken / debentures issued.
% Ceased to be subsidiary companies during the year.
Details of subsidiaries, limited liability partnership and associates
# Parsvnath Promoters And Developers Private Limited is a subsidiary in terms of Section 2(87)(ii) of the Companies Act, 2013, since 51% of the equity capital is held by Parsvnath Developers Limited together with Parsvnath Rail Land Project Private Limited, a subsidiary of Parsvnath Developers Limited, which is holding 46.14% shares w.e.f. 03 March, 2020.
* Parsvnath Rail Land Project Private Limited is considered as a subsidiary on the basis of voting power in the said company.
% Ceased to be subsidiary companies during the year.
2 On a prudence basis the company has not recognised deferred tax assets amounting to Rs. Nil (31 March, 2023 - Rs. 7,378.65 lakhs) on current year losses and other items.
3 The Company has recognised deferred tax assets on its unabsorbed depreciation and business losses carried forward. The Company has executed flat / plot sale agreements with the customers against which the Company has also received advances, as disclosed in Note 25 of the financial statements. Revenue in respect of such sale agreements will get recognised in future years on completion of projects. Based on these sale agreements, the Company has certainty as on the date of the balance sheet, that there will be sufficient taxable income available to realise such assets in the near future. Accordingly, the Company has created deferred tax assets on its carried forward unabsorbed depreciation and business losses. The company is also planning to sell some of its identified assets.
4 The deferred tax assets on unabsorbed depreciation and tax losses has been recognised to the extent of deferred tax liabilities.
1. The average credit period is 30 to 45 days. For payments, beyond credit period, interest is charged as per the terms of Agreement with Buyers.
2. The real estate invoicing are made on the basis of cash down payment or construction linked payment plans. In case of construction linked payment plans, invoice is raised on the customer in accordance with milestones achieved as per the flat buyer agreement. The final possession of the property is offered to the customer subject to payment of full value of consideration. The possession of the property remains with the Company till full payment is realised. Accordingly, the Company does not expect any credit losses. Further, in case of trade receivables related to leased premises, it is secured against securtiy deposit received from tenants. Therefore, expected credit loss was not considered in such cases.
3. Trade receivables have been pledged as security for borrowings by the company (refer note 21 & 26)
4. Refer note 67 for amounts due from related parties.
(i) Rights, preferences and restrictions attached to equity shares:
The Company has issued only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share held. The dividend, if any, proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserves:
a. General reserve - The Company has transferred a part of the net profit of the Company to general reserve in earlier years.
b. Securities premium - The amount received in excess of the face value of the equity shares issued by the Company is recognised in securities premium.
c. Debenture redemption reserve - The company has recognised debenture redemption reserve from its retained earnings. The amount of reserve is more than 25% of the value of outstanding redeemable debentures.
d. Retained earnings - Retained earnings are profits/(losses) of the Company earned till date less transferred to general reserve and debenture redemption reserve.
37 CONTiNGENCiES
|
|
Rs. in lakhs
|
|
As at
31-March-2024
|
As at
31-March-2023
|
a. Claims against the Company not acknowledged as debts*:
|
|
|
i. Demand for payment of stamp duty
|
446.37
|
446.37
|
ii. Customer complaints pending in courts
|
29,187.23
|
36,259.78
|
iii. Civil cases against the Company
|
353.80
|
663.44
|
iv. Income tax demand
|
4,169.92
|
6,307.51
|
v. Value Added Tax / Trade tax demand
|
1,393.44
|
1,523.29
|
vi. License fee to DMRC (see note 41)
|
5,977.79
|
5,226.10
|
vii. Others
|
9.07
|
20,943.79
|
b. Security/performance guarantees issued by the banks to Government authorities on behalf of group companies, for which the Company has provided counter guarantee
|
1,276.00
|
1,276.00
|
c. Corporate guarantees issued on behalf of Subsidiary / Associate / Other companies for loans
|
1,07,000.00
|
1,14,968.00
|
* It is not possible for the Company to estimate cash outflows. The extent to which an outflow of funds will be required is dependent on the pending resolution of the respective proceedings/legal cases and it is determinable on receipt of judgment/ decision pending with various forums/authorities/courts.
38 COMMiTMENTS
|
|
Rs. in lakhs
|
|
|
As at
31-March-2024
|
As at
31-March-2023
|
a.
|
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
|
12,289.51
|
6,821.88
|
Note: The construction activities in respect of two projects in progress classified as 'Intangible assets under development' has been suspended because of arbitration proceedings are going on between DMRC and the Company. The construction activities shall remain suspended till conclusion of the arbitration proceedings. As a result, the estimated expenses to be incurred on such projects amounting to Rs. 12,289.51 lakhs shall also remain suspended till conclusion of arbitration proceedings.
b. The Company has other commitments, for purchase orders which are issued after considering requirements as per the operating cycle for purchase of goods and services, in the normal course of business.
39 The Company did not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.
40 There were no amounts which were required to be transferred to the Investor Education and Protection Fund, during the year.
41 a. The Company has entered into concession agreements with Delhi Metro Rail Corporation Limited (DMRC) for various projects
on Build-Operate-Transfer (BOT) basis. In case of Tis Hazari project, the Company was unable to commercially utilise the properties due to lack of clarity between DMRC and Municipal Corporation of Delhi (MCD) with respect to authority for sanction of building plans. In view of the delay, the Company has sought concessions from DMRC and has invoked the Arbitration clause under the concession agreement in case of this project. The Arbitral Tribunal has announced its award in favour of DMRC. The Company has filed an appeal in the Hon'ble Delhi High Court against this award and the proceedings are going on. Arguments have been heard at length and further parties are directed to file written submission. The hearing
on the matter is now scheduled for 20 November, 2024. Pending final decision, the company has not provided for license fees amounting to Rs. 189.79 lakhs (previous year Rs. 189.79 lakhs) and has shown the same under contingent liabilities.
b. In case of another project, viz. Welcome Mall, construction activities had to be suspended as the property development area allotted to the Company was infringing the proposed line of Metro Station to be constructed by DMRC under phase III. Consequently, the construction activities could not be restarted due to DMRC's inability to provide necessary clarifications regarding FAR availability on the property development area and final approved revised layout plan from MCD. The Company invoked the Arbitration clause under the concession agreement. DMRC vide letter dated 04 March, 2022 issued a termination notice thereby terminating the Concession agreement with effect from 12 March, 2022. The Tribunal vide order dated 13 April, 2022 directed DMRC to maintain status quo till conclusion of arbitration proceedings. The Arbitral Tribunal has pronounced the Award and as per the Award, the Arbitral Tribunal has partly allowd the claims sought by the company and rejected all the counter claims sought by DMRC. Pursuant to publication of the Award, DMRC has filed an Application under section 33 of the Arbitration & Conciliation Act, 1996 seeking correction as well as interpretation of the Award. The Arbitral Tribunal, while disposing off the Application of DMRC, has decided to make corrections to the inadvertent mistakes which have taken place in the Award and refused to give any interpretation/clarification as sought by DMRC on the basis that the Award is selfexplanatory. The company is in the process of filing appeal against the Award for further allowing the claims of the Company.
In view of the above, the Company has not provided for recurring license fees amounting to Rs. 5,788.00 lakhs (previous year Rs. 5,036.31 lakhs) and has shown the same under contingent liabilities. However, the Company has continued to carry forward the advances / costs incurred on these projects after charging for amortisation / depreciation on periodical basis. On the basis of legal opinion received, the management is of the view that the Company has favourable case and has considered the Intangible asset under developement of Rs. 14,115.68 lakhs as on 31 March, 2024 (previous year Rs. 14,032.51 lakhs) as fully realisable from future operations.
c. In case of another project, viz. Seelampur plot, the sanction of building plans by MCD got delayed for want of No Objection Certificate (NOC) from Government agencies. Accordingly, DMRC was approached to waive the recurring payment liability for the disputed period. Since an amicable resolution could not be reached out between the Company and DMRC, the Company invoked "Arbitration Clause" under the concession agreement for settlement of the matter. The Arbitral Tribunal has announced its award in favour of DMRC and directed the company to make payment of recurring fee amounting to Rs. 861 lakhs alongwith interest of Rs. 656 lakhs upto 27 January, 2017. The Arbitral Tribunal has also granted pendent-lite and future interest at the rate of 8.30% p.a. till 30 days from the date of award i.e. 22 March, 2021 and at 10.30% p.a. thereafter. The Company has filed an appeal in the Hon'ble Delhi High Court against this award and the proceedings are going on. Further, DMRC has filed a Petiton before Hon'ble High Court under Section 36 of the Arbitration and Conciliation Act, seeking enforcement of the Award. On 04.03.2022 the Court directed PDL to deposit the awarded amount. PDL has challenged the imlpugned order dated 04.03.2022 passed by the Hon'ble High Court before the Supreme Court. The Supreme Court dismissed the SLP. The Objections are pending consideration before the Hon'ble High Court of Delhi wherein Company has raised issues with respect to independence of the Arbitral Tribunal. The matter is now listed on 20.09.2024. On the basis of legal advice received, the management is of the opinion that the company has a favourable case before Hon'ble Delhi High Court and has considered the Assets held for sale of Rs. 2,499.07 lakhs as on 31 March, 2024 (previous year Rs. 2,499.07 lakhs) as fully recoverable.
d. The Company is developing a project situated at Azadpur Metro Station as per the terms of concession agreement with DMRC. Due to delays in payments to DMRC, DMRC issued a letter dated 28 February, 2022 for termination of contract with the Company. The Company invoked clause 12.2.2 of the concession agreement for conveying amicable meeting with DMRC for amicable settlement of the dispute, however the same was denied by DMRC. Thereafter, the company invoked the arbitration clause in terms of Clause 12.3 of the Concession Agreement. Accordingly, the Arbitral Tribunal has been constituted which met on 3 June, 2024 and fixed the time schedule for filing of pleadings by the parties. The next date of hearing is on 24 October, 2024. On the basis of legal opinion, the management is of the view that the matter will be decided in favour of the
company as the company has a strong case against DMRC due to various defaults on the part of DMRC and has therefore considered the amount of Rs. 8,017.42 lakhs appearing as Intangible assets under development (previous year Rs. 22,156.22 lakhs appearing as Assets held for sale) as fully realisable from future operations.
42 The Company had entered into an 'Assignment of Development Rights Agreement' dated 28 December, 2010 with a wholly owned subsidiary company, Parsvnath Buildwell Private Limited (subsidiary company) and Collaborators (land owners) in terms of which the Company had assigned Development Rights of one of its project to subsidiary company on terms and conditions contained therein.
The project has been delayed owing to hindrances created by the collaborators (land owners) leading to non-receipt of approvals for the revised building plans. As a result, certain disputes arose with the collaborators (land owers) who sought cancellation of the Development Agreement and other related agreements and have taken legal steps in this regard. Subsidary company invoked the arbitration clause and as a consequence of the land owners not appointing their nominee Arbitrator, the subsidary company approached the Hon'ble High Court at Allahabad for appointment of Arbitrator under section 11 of the Arbitration and Conciliation Act. During the pendency of section 11 petition at Hon'ble Allahabad High Court, the Hon'ble Supreme Court, while hearing a Civil Appeal filed by subsidary company and the company in another matter, stayed the appointment of arbitrator by the Hon'ble Allahabad High Court vide its Order dated 9 April, 2018 and further directed the land-owners to co-operate with subsidary company for getting the building plans approved by the Ghaziabad Development Authority. Subsequently, vide Order dated 29 November, 2019, the Hon'ble Supreme Court of India appointed a sole arbitrator to adjudicate the disputes between subsidary company and the collaborators (land owners). The Ld. Sole Arbitrator pronounced the Arbitral Award on 18 April, 2023 and has partly allowed the claims of subsidary company and also counter-claims of the land owners. The Ld. Sole Arbitrator also restored the physical possession of the Project Land in favour of the land owners subject to payment of all amounts awarded under the Award to the subsidary company.
Subsidary company has filed the appeal with Commercial Court challenging the Award by filing objections under Section 34 of the Arbitration and Conciliation Act, 1996 on 19 August, 2023. The final hearing in the matter was held on 1 March, 2024. During the course of arguments, the company submitted that the Impungned Award is perverse and patently illegal as the same does not consider logical conclusion of termination of Agreement. The Court, after hearing both the parties, proceeded to reserve its order on the Objections. Based on legal opinion obtained, the management is of the view that termination of the agreement will be set aside and project will be restated. Accordingly, the investment of Rs. 21,076.47 lakhs (previous year Rs. 21,076.47 lakhs) and loans & advances of Rs. 3,616.31 lakhs (previous year Rs. 2,631.93 lakhs) given to the subsidary company is considered as good and recoverable.
43 The Company had entered into a Memorandum of Understanding (MOU) dated 22 December, 2010 with a wholly owned subsidiary company, Parsvnath Realcon Private Limited (subsidiary company) [earlier, a wholly owned subsidiary of its subsidiary Parsvnath Buildwell Private Limited (another subsidiary company)] in terms of which the Company had assigned development rights of one of its project to the subsidiary company. The Company has also entered into 'Project Management Agreement' with subsidiary company and another subsidiary company for overall management and coordination of project development. Further, the Company has given the following undertakings to subsidiary company:
a. It shall complete the project within the completion schedule and construction cost as set out in the Agreement.
b. The project revenues from the sold area shall be at least the amount set out in the Agreement.
c In the event of construction cost overrun or revenue shortfall, the Company shall contribute such excess/shortfall amount against allotment of equity shares or other instruments at such premium as may be mutually determined by the parties.
The progress of the project has been hampered due to delay in receipt of sanction for revised building plans from South Delhi Municipal Corporation (SDMC) which was ultimately received in November, 2019.
Since the delay in completion of the project has been caused mainly due to certain acts of commission / omission by DMRC, the Company has invoked arbitration proceedings against DMRC and the Statement of Claim has been filed before the Arbitral Tribunal. The Arbitral Tribunal pronounced the Award on 4 April, 2024 and has partly allowed the claims sought by the Company and rejected the remaining claims. Based on legal opinion obtained, the management is of the view that loan of Rs. 2,346.85 lakhs (previous year Rs. 4,751.30 lakhs) given to the subsidiary company, investment of Rs. 1.00 lakh (previous year Rs. 1.00 lakh) in the subsidiary company and debtors of Rs. 19.81 lakhs (previous year Rs. 300.00 lakhs) are good and recoverable.
44 The Company had entered into a Development Agreement (DA) with Chandigarh Housing Board (CHB) for the development of an integrated project ('the project') at Chandigarh. Owing to various factors, disputes had arisen between the Company and CHB. Consequently, the Company had invoked the arbitration clause in the DA. Hon'ble Sole Arbitrator had pronounced the award in January, 2015 which was accepted by the Company and the CHB. Pursuant to the arbitration award, the project was discontinued and surrendered to CHB.
Subsequent to the acceptance and implementation of the award, it was noticed that due to a computational error in the award, the awarded amount was deficient by approximately Rs. 14,602.00 lakhs. Consequently, the Company made an application to the Hon'ble Sole Arbitrator for correction of the computational error. However, the Sole Arbitrator in his findings, while admitting the error, stated that after acceptance and implementation of the award by both the parties he had become non-functionary and therefore rejected the claims made by the Company. The Company has since filed its objections under section 34 of the Arbitration and Conciliation Act, 1996 read with section 151 of Code of Civil Procedure (CPC) before the Additional District Judge cum MACT, Hon'ble Chandigarh and Haryana Court had issued notice to CHB for filing its reply and also called for the Arbitral Record from the Sole Arbitrator. The Additional District Judge, Chandigarh dismissed our application on 30 May, 2018. Aggrieved by the said order, the Company preferred an appeal under section 37 of the Arbitration and Conciliation Act, 1996 before the Hon'ble Punjab & Haryana High Court at Chandigarh and the proceedings are going on. The matter is now listed for hearing on 23 September, 2024. Pending decision of the Hon'ble Punjab & Haryana High Court, based on the legal advice received, the management is hopeful for recovery and the amount of Rs. 14,046.91 lakhs (net of tax deducted at source) has been shown as recoverable and included under 'other non-current financial assets' in note 11.
45 The Company had given an advance of Rs. 4,853.13 lakhs to one of its subsidiaries viz., Parsvnath Film City Limited (PFCL) for execution of Multimedia-cum-Film-City Project at Chandigarh. PFCL had deposited Rs. 4,775.00 lakhs with 'Chandigarh Administration' (CA) for acquiring development rights in respect of a plot of land admeasuring 30 acres from CA, under Development Agreement dated 2 March, 2007 for development of a "Multimedia-cum-Film City" Complex. Since CA could not handover the possession of the said land to PFCL, PFCL invoked the arbitration clause for seeking refund of the allotment money paid along with compensation, cost incurred and interest thereon.
The Arbitral Panel vide its order dated 10 March, 2012, had decided the matter in favour of PFCL and awarded refund of Rs. 4,919.00 lakhs towards the earnest money paid and other expenses incurred by PFCL along with interest @ 12% per annum. Subsequently, the CA filed a petition before the Additional District Judge at Chandigarh for setting aside the award under section 34 of The Arbitration and Conciliation Act, 1996. The said petition was dismissed by the Hon'ble Additional District Judge (ADJ) vide his order dated 07 May, 2015.
An Execution Petition was filed before Additional District Judge (ADJ), Chandigarh by PFCL for the execution of the Arbitral Award. In the meantime, CA filed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 before the Hon'ble Punjab and Haryana High Court at Chandigarh against the orders of the ADJ, Chandigarh pertaining to the Award of Arbitral Tribunal. The Hon'ble High Court allowed the appeal filed by CA and set aside the arbitral award vide its orders dated 17 March, 2016. The
Hon'ble High Court also decided that CA is entitled to cumulatively claim/recover an amount of Rs. 8,746.60 lakhs from PFCL due to failure to develop the site and adhere to the terms of the agreements. PFCL has filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court of India which has since been admitted and notice has been issued to the Opposite Party. CA has also filed a Special Leave Petition before the Hon'ble Supreme Court of India for allowing the counter claims made by them and both the matters have been tagged together and the matters are listed before the Ld. Registrar for completion of pleadings. The matter was listed on 9 May, 2024 before the Hon'ble Supreme Court. Despite of service of notice and granting two opportunities, there was no appearance on behalf of Chandigarh Administration. In view of this, the Ld. Registrar passed an order directing to list both the Appeals before the Hon'ble Judge in Chambers for passing appropriate order. The next date of hearing is not fixed. As the Arbitral Award has been passed in favour of the Company which has already been upheld by Additional District Judge in Section 34 proceedings, the Company has good case before the Hon'ble Supreme Court of India and there is likelihood that the Company will succeed before the Hon'ble Supreme Court of India. Based on legal advice received, the management is hopeful for recovery and the amount of Rs. 4,818.13 lakhs (previous year Rs. 4,817.40 lakhs) has been shown as recoverable and included under Noncurrent financial assets - loans' in note 10.
46 The Company was declared as the "Selected Bidder" for grant of lease for development of project on a plot of land at Sarai Rohilla, Kishanganj, Delhi by 'Rail Land Development Authority' (RLDA) vide its 'Letter of Acceptance' (LOA) dated 26 November, 2010. Parsvnath Promoters and Developers Private Limited (PPDPL) was identified as a Special Purpose Vehicle (SPV) company for implementation of the project. Subsequently, in terms of the requirements of RLDA, another Company in the name of Parsvnath Rail Land Project Private Limited (PRLPPL) was incorporated as the SPV to implement the project in place of PPDPL. RLDA accepted PRLPPL as the SPV vide its letter dated 3 August, 2012.
The Company entered into agreements with PRLPPL and overseas investors during 2012 and 2013 for financing the project.
Due to multifarious reasons, including delay in the statutory approvals, PRLPPL was not able to achieve 'Financial Closure' as per Article 7 of the Agreement which resulted in deemed termination of the agreement. The Company and PRLPPL invoked the arbitration clause in the development agreement for recovery of amount paid to RLDA together with interest thereon on deemed termination of the agreement and related matters and instituted three Arbitral proceedings namely Arbitration I, III & IV.
In case of Arbitration I (with respect to RLDA's liability for payment of interest to PRLPPL on installments received in excess of and prior to RLDA's entitlement), the Arbitral Tribunal by award dated 1 June, 2018 rejected the claim filed by the Company and PRLPPL. The Company and PRLPPL have filed an appeal before the Hon'ble Delhi High Court against the said award and the proceedings are going on. The matter is now listed on 21 August, 2024 for final arguments.
The Company and PRLPPL have further initiated two other Arbitration proceedings (Arbitration III and IV) seeking inter-alia refund of the amounts retained as alleged losses by RLDA, losses incurred on account of RLDA's breach of its representations and warranties in respect of the land sought to be leased and delay in return of Performance Bank Guarantee. In Arbitration III, the arbitral award pronounced on 21 April, 2023 and modified on 15 September, 2023 has been decided in favour of the company and PRLPPL. Pursuant to the order dated 15 September, 2023, the company and PRLPPL are now entitled to receive Rs. 14,746.70 lakhs along with interest @ 8.50% from 15 March, 2017 till the date of realization. RLDA has also filed a Petition under Section 34 of the Arbitration and Concilation Act thereby challenging the Arbitral Award dated 21 April, 2023 and subsequently modified on 15 September, 2023 passed by the Arbitral Tribunal.
In Arbitration IV, the rejoinder arguments have been concluded, and the arbitral award was pronounced on 31 July, 2023. In terms of the arbitral award, a total of Rs. 330.14 lakhs has been awarded in favour of the claimants, which includes expenses for maintaining Performance Bank Guarantee of Rs. 172.27 lakhs plus Interest amount of Rs. 88.11 lakhs plus cost of arbitration amounting to Rs. 69.75 lakhs to the Claimant within a period of 6 weeks from the date of receipt of the Award. In the event the Responent fails to make such payment, interest at the rate of 9% per annum shall be levied from the date of this Award, until the date of full payment. The company and PRLPPL have filed an Execution Petition to enforce the Award passed on 31 July, 2023.
RLDA has also filed a Petition under Section 34 of the Arbitration and Concilation Act thereby challenging the Award passed by the Arbitral Tribunal.
Both the above Petitions are now listed on 23 July, 2024.
Based on legal advice received, the investment in PRLPPL of Rs. 1,145.00 lakhs (previous year 1,145.00 lakhs) and loan of Rs. 27.88 lakhs (previous year Rs. 11.50 lakhs) given to PRLPPL has been considered as good and recoverable.
47 The Company has incurred cash losses during the current and previous years. Due to recession in the past in real estate sector owing to slowdown in demand, the company faced lack of adequate sources of finance to fund execution and completion of its ongoing projects resulting in delayed realisation from its customers. The company is facing tight liquidity situation as a result of which there have been delays/defaults in payment to lenders, statutory liabilities, salaries to employees and other dues. However, considering substantial improvement in real estate sector recently, the Management is of the opinion that all such issues will be resolved in due course by required finance through alternate sources, including sale of non-core assets.
48 a. Trade receivables:
Due to recession in the past in the real estate sector, there have been delays in collections from customers. In view of industry practice and terms of agreement with customers, all these debts are considered good for recovery and hence no provision is considered necessary.
49 The Company has restated the value of investments in 0.01% Optionally convertible Debentures (OCDs) at face value of Rs. 37,500 lakhs resulted in gain of Rs. 21,300 lakhs which have been transferred to lender at face value to settle the dues. The company has entered into settlement agreement with one of the lender group and provided for compensation on settlement of dues of Rs. 9,700 lakhs, Impairment in the value of projects of Rs. 21,332.28 lakhs & impairment in the value of receivables from its subsidiaries of Rs. 3,800 Lakhs resulted in net loss of Rs. 13,532.28 lakhs which has been considered as exceptional item.
50 In respect of debentures refer note no. 21(i)(a) and borrowings refer note nos. 21(i)(a), (d), & (f), note no. 26(II)(a)(i) along with Interest due of one of the lender group, had approved the settlement proposal, subject to payment of negotiated dues by the company till 31 March, 2023. The Company could make only partial payments to these negotiated dues. Subsequently, after March 2024, the Company has settled loan as per note no. 26(II)(a)(i) and Rs. 350.00 lakhs out of from note no. 26(II)(a)(ii) alongwith interest due thereon and debentures of other group companies with the investment in debentures refer note no. 9(II)(A)(1)(a). Further, the company is in the process of renegotiating fresh settlement at Group level but formal approval is pending on closing of Financials. The company is confident of achieving this settlement / renegotiation by payment of settled dues.
51 Greater Noida Authority has cancelled the allotment of two housing plots situated at Greater Noida on which the Company was constructing the Projects vide letters dated 23 November, 2022 on account of non-payment of premium and interest thereon amounting to Rs. 28,128 lakhs. The Company has filed two separate Revision Petitions under Section 41(3) of the Uttar Pradesh Urban Planning and Development Act, 1976 challenging the cancellation letters dated 23 November, 2022 which were listed on 13 July, 2023 before Additional Chief Secretary, Infrastructure and Industrial Department for arguments and the same was reserved for Order. Further, vide Order dated 3 April, 2023, the Hon'ble High Court of Judicature at Allahabad, Lucknow Bench has restrained the Authority from creating any third party rights in the said plots. The Principal Secretary, Government of Uttar Pradesh, vide his orders dated 2 November, 2023 allowed the Revision Petitions and set aside the cancellation letters dated 23 November, 2022 and as such the allotment of the plots has been restored. The Principal Secretary has further directed the Authority to recompute the outstanding dues in terms of the order and has also allowed extension of time for completion of the projects. The Company is yet to receive the demand and extension letter from Authority. In the opinion of management, the value of inventory of Rs. 16,168.44 lakhs and Rs. 51,536.29 lakhs as at 31 March, 2024 for the said plots respectively is good and recoverable.
52 The Company had entered into Memorandum of Understanding (MOU) with its wholly owned subsidiaries for the purpose of transfer of all rights under the concession agreements in respect of its four projects situated at Akshardham Metro Station, Azadpur Metro Station, Seelampur Metro station and Inderlok Metro Station, subject to approval from Delhi Metro Rail Corporation (DMRC). The Company had acquired these development rights under concession agreements with DMRC.
a. In the case of one project situated at Akshardham Metro Station, approval for transfer of these rights to the wholly owned subsidiary company has been obtained from DMRC. Pursuant to the MOU as aforesaid, the company has transferred the Akshardham project to its wholly owned subsidiary company during the year.
b. In the case of two other projects situated at Seelampur Metro Station and Inderlok Metro Station, the company has entered into Addendum to the original MOUs thereby extending the period for transfer of projects by one year from the date of execution of the said Addendum hereof. Pending transfer, book value of assets/rights (which is lower than the realisable value) under these concession agreements have been classified as 'Assets held for sale'.
c. In the case of fourth project situated at Azadpur Metro Station, the MOU entered with the wholly owned subsidiary company has been cancelled and accordingly the project has been restated as 'Other intangible assets under development' from 'Assets held for sale'
53 Parsvnath HB Projects Private Limited (PHBPPL), a subsidiary of the company, was allotted a land by Punjab Small Industrial & Exports Corporation Limited (PSIEC) on freehold basis. Due to non payment of instalment, PSIEC cancelled the allotment of land and the company filed the arbitration petition against cancellation of allotment. The arbitration proceedings are going on. As directed by the Arbitrator, the company submitted its proposal for amicable settlement to the counsel for PSIEC. However, during the course of hearing on 17 May, 2024, the counsel for PSIEC apprised that the proposal is not accepted by PSIEC and further requested to provide a better proposal. The matter is now listed on 11 July, 2024 for further proceedings.
In the meantime, PSIEC initiated the proceedings under Public Properties (Eviction and Unauthorised occupants) Act. The order was passed by appropriate authority to hand over the possession of the site and accordingly PSIEC has taken symbolic possession of the land. The eviction petition was filed by PSIEC for determination of damages and the company is contesting the matter on the ground that eviction petition is not maintainable as the arbitration proceeding are under progress. Based on the opinion of the legal counsel, the management is of the view that as there are lapses on the part of PSIEC in providing facilities as promised at the time of bid, the company has good chances that the company will succeed in arbitration proceedings and cancellation of allotment will be set aside. Accordingly, on the basis of legal opinion, management is of the view that loan of Rs. 6,636.28 lakhs (previous year Rs. 6,635.71 lakhs) given to PHBPPL and investment of Rs. 2.50 lakhs (previous year Rs. 2.50 lakhs) in PHBPPL are good and recoverable.
54 The Company was awarded a works contract by Buddha Smriti Udhyaan Development Company Ltd. (BSUDCL) to develop a park, by the name of Buddha Smriti Udhyaan ("the Project") in Patna, Bihar on 27 June, 2008. Major portion of the project was completed in the year 2010 and the Park was inaugurated by the Dalai Lama in May, 2010. The project was thereafter taken over by the Bihar Urban Infrastructure Development Corporation Limited (BUIDCL) on 1 November, 2010 who stepped into the shoes of the BSUDCL. The remaining portion of the project was also completed and bills for the work done were raised on BUIDCL. BUIDCL instead of making payment wrongfully invoked the performance bank guarantee of Rs. 628.00 lakhs submitted by the company, alleging failure on the part of company to complete the project. Payments against bills were also stalled by BUIDCL. The company kept calling upon the BUIDCL for amicable resolution of the disputes. Thereafter, the company approached the Bihar Public Works Contract Disputes Arbitration Tribunal (Tribunal) with its claims against BUIDCL. Thereafter, the company and other side also filed their claims and counter claims before the Tribunal. The matter is disposed of by the Tribunal expressing its inability to entertain the Petition in view of the judgment passed by the Hon'ble Supreme Court in some other matter. However, at the request of counsel appearing for the company, the Tribunal granted liberty to approach the Hon'ble High Court under Section 11 of the Arbitration and Conciliation Act for appointment of an Arbitrator. As per the legal advise obtained by the company, the compay has approached BUIDCL for amicable settlement in the matter. BUIDCL has sought certain clarifications / details regarding delay in completion, The company has provided detailed response to BUIDCL. Subsequently, the Company also submitted its representation with BUIDCO for amicable settlement, however, till date no effective response has been received from BUIDCO. Based on the legal advise, the company has good chances that the company will succeed in the Arbitral proceedings in case the matter is not amicably settled. Based on the above, the management is hopeful for recovery and the amount of Rs. 1,263.72 lakhs has been shown as recoverable.
55 In the opinion of the Board of directors and management, current and non-current assets do have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and liabilities are stated at least at the value they are expected to be settled in the ordinary course of business though balance confirmation in certain cases are not available.
56 Corporate Social Responsibility
In terms of the provisions of section 135 of the Companies Act, 2013, the Company was not required to spend any amount on activities relating to Corporate Social Responsibilities (CSR) for the year 2023-24 due to continuing losses in preceding three years except an amount of Rs. 238.38 lakhs pertaining to financial year 2014-15. The Company has replied to the Show cause notice issued by Registrar of Companies (ROC), NCT of Delhi & Haryana and also applied for compounding before the Regional Director, Northern Region, Ministry of Corporate Affairs which has been rejected by the Regional Director. The Company will take appropriate steps in consultation with the counsel in case any further communication is received from ROC, NCT of Delhi & Haryana.
57 The Company is engaged in the business of real estate development, which has been classified as infrastructural facilities as per Schedule VI to the Companies Act, 2013. Accordingly, provisions of section 186 of the Companies Act are not applicable to the company and hence no disclosure under that section is required.
58 Serious Fraud Investigation Office has commenced the investigation into the affairs of the company under section 212 of the Companies Act. The company is in the process of providing the information sought by the SFIO office.
ii. Refer note 9 for outstanding balances as on 31 March, 2024 and 31 March, 2023 for Investment in Subsidiary / Associate Companies. Closing balances of Investment in Subsidiary / Associate Companies were the maximum outstanding balances as on 31 March, 2024 and 31 March, 2023 respectively except investments in Farhaad Realtors Private Limited - Rs. NIL (previous year Rs. 1.00 lakhs) and Vardaan Buildtech Private Limited - Rs. NIL (previous year Rs. 1.60 lakhs), Maximum amount outstanding during the year - Rs. 2.60 lakhs (previous year Rs. 2.60 lakhs)
iii. Refer note 67 for Corporate Gurantees given by the Company on behalf of Subsidiary / Associate companies for loans taken by them as on 31 March, 2024 and 31 March, 2023. Closing balances of corporate gurantees given by the company on behalf of subsidiary / associate companies were the maximum outstanding balances as on 31 March, 2024 and 31 March, 2023 respectively except the followings:
62 SEGMENT iNFORMATiON
The Company's business activities which are primarily real estate development and related activities falls within a single reporting segment as the management of the company views the entire business activities as real estate development. Accordingly, the reporting requirements for segment disclosure as prescribed by Ind AS 108 are not applicable.
63 EMPLOYEE BENEFiT PLANS
a Defined contribution plan
The Company makes Provident Fund contributions to Regional Provident Fund Commissioner (RPFC) and ESI contributions to Employees State Insurance Corporation (ESIC), which are defined contribution plans, for qualifying employees. The Company contributes a specified percentage of salary to fund the benefits. The contributions payable to these plans by the Company are at the rates specified in the rules of the scheme. The amount of contribution is as under:
b Defined benefit plan
The Company offers its employees defined benefit plan in the form of a gratuity scheme. Benefits under gratuity scheme are based on year's of service and employee remuneration. The scheme provides for lump sum payment to vested employees at retirement, death while on employment, resignation or on termination of employment.
Amount is equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months. Vesting occurs upon completion of 5 years of continuous service.
The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.
64 OPERATING LEASE ARRANGEMENTS - AS LESSEE - iND AS 116
The Company has entered into Concession Agreements with Delhi Metro Rail Corporation (DMRC) and has acquired the License Rights to develop properties and sub license it to the customers for a defined period of time. License fee payable to DMRC over the concession period has been recognised as 'Right of use assets' and 'lease liabilities' as at 1 April, 2019 as per Ind AS 116.
a. The Company has adopted Ind AS 116 "Leases" effective 1 April, 2019 and applied the standard to its lease contracts existing as at 1 April, 2019 using the modified retrospective approach. The Company has recorded lease liability at the present value of the lease payments that are not paid as at 1 April, 2019, discounted using the company's incremental borrowing rate and recognised right of use assets of equal amounts.
b. The depreciation expense of Rs. 147.77 lakhs (Previous year Rs. 145.45 lakhs) on right-of-use assets is included under depreciation and amortisation expense in the statement of Profit and Loss and depreciation of Rs. NIL (Previous year Rs. NIL) has been capitalised in 'Intangible Assets Under Development'.
c. The following is the summary of practical expedients elected on initial application:
(i) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
(ii) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application or low value leases.
(iii) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
(iv) Applied the practical expedient to assessment of which transactions are leases. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.
Terms and conditions of transactions with related parties
All related party transactions entered during the year were in ordinary course of business and are on arm's length basis. Loans given to wholly owned subsidiaries are unsecured and interest free. For the year ended 31 March, 2024, the Company has recorded impairment of investments and receivables from related parties of Rs. 4,000 lakhs (31 March, 2023 - Rs. 210 lakhs). The Company makes this assessment each financial year through examination of the financial position of the related party and the market condition in which the related party operates.
The Company has disclosed financial instruments such as trade receivables, loans and advances, other financial assets, trade payables, borrowings and other financial liabilities at carrying value because their carrying amounts are reasonable approximation of the fair values.
Fair value hierarchy
The fair value of financial instruments have been classified into three categories depending on the inputs used in the valuation technique.
The categories used are as follows:
Level 1: Quoted prices for identical instruments in an active market
Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs
Level 3: Inputs which are not based on observable market date
69 FiNANCiAL RiSK MANAGEMENT
The Company's business operations are exposed to various financial risks such as liquidity risk, market risks, credit risk, interest rate risk, funding risk etc. The Company's financial liabilities mainly includes borrowings taken for the purpose of financing company's operations. Financial assets mainly includes trade receivables, investment in subsidiaries/joint venture/associates and loans to its subsidiaries.
The Company has a system based approach to financial risk management. The Company has internally instituted an integrated financial risk management framework comprising identification of financial risks and creation of risk management structure. The financial risks are identified, measured and managed in accordance with the Company's policies on risk management. Key financial risks and mitigation plans are reviewed by the board of directors of the Company.
Liquidity Risk
Liquidity risk is the risk that the Company may face to meet its obligations for financial liabilities. The objective of liquidity risk management is that the Company has sufficient funds to meet its liabilities when due. The Company is under stressed conditions, which has resulted in delays in meeting its liabilities. The Company, regularly monitors the cash outflow projections and arrange funds to meet its liabilities.
Market risk
Market risk is the risk that future cash flows will fluctuate due to changes in market prices i.e. interest rate risk and price risk.
A. interest rate risk
Interest rate risk is the risk that the future cash flows will fluctuate due to changes in market interest rates. The Company is mainly exposed to the interest rate risk due to its borrowings. The Company manages its interest rate risk by having balanced portfolio of fixed and variable rate borrowings. The Company does not enter into any interest rate swaps.
B. Price risk
The Company has very limited exposure to price sensitive securities, hence price risk is not material.
Credit Risk
Credit risk is the risk that customer or counter-party will not meet its obligation under the contract, leading to financial loss. The Company is exposed to credit risk for receivables from its real estate customers and refundable security deposits.
Customers credit risk is managed, generally by receipt of sale consideration before handing over of possession and/or transfer of legal ownership rights. The Company credit risk with respect to customers is diversified due to large number of real estate projects with different customers spread over different geographies.
Based on prior experience and an assessment of the trade receivables, the management believes that there is no credit risk and accordingly no provision is required.
70 CAPITAL MANAGEMENT
For the purpose of capital management, capital includes equity capital, share premium and retained earnings. The Company maintains balance between debt and equity. The Company monitors its capital management by using a debt-equity ratio, which is total debt divided by total capital.
73 The company has not provided or paid any remuneration to Executive directors during the year except the sitting fees paid to Non-Executive Independent Directors.
74 The Company has no outstanding derivative or foreign currency exposure as at the end of the current year and previous year.
75 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
Based on the preliminary assessment the entity believes the impact of the change will not be significant.
76 The Company do not have any benami property, where any proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Further, a show cause notice has been received by the company under the Benami Transactions (Prohibition) Act for supply of information in the case of one of the lender. In the opinion of the management, these proceedings are not related to the company and therefore no disclosure is required.
77 The company has not been declared wilful defaulter by any bank and financial institution or any other lender.
78 Term Loans taken from bank and financial institutions or any other lender were applied for the purpose for which the loans were obtained.
79 The company has been sanctioned working capital limits from banks during the year on the basis of security of current assets. The quarterly statements filed by the company with such banks are in agreement with the books of accounts of the company.
80 The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) except advance to related parties as disclosed in note 67 for projects of the company, with the understanding that the Intermediary shall:
a. 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
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
81 The Company has not received funds from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. 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
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
82 The Company does not have any charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period. However, in certain cases, charge will be created after getting approval from the Concessionaire which is a prerequisite for the said charge creation. Further, in case of loan from Edelweiss Asset Reconstruction Company Limited and Rare Asset Reconstruction Limited (RARE) / ECL Finance Limited (ECL), charge has been modified suo moto by the lenders and the securities have been consolidated against all loans outstanding to these lenders which is not in terms of agreement.
83 The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 from the date of their implementation.
84 The Company does not have any such 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.
85 The Company has not traded or invested in Crypto currency or Virtual Currency during the year.
86 EVENTS AFTER THE REPORTiNG PERiOD
There are no event observed after the reported period which have an impact on the Company's operation.
87 Figures for the previous year have been regrouped / rearranged wherever necessary to make them comparable with current year classifications.
88 APPROVAL OF THE FiNANCiAL STATEMENTS
The financial statements were approved for issue by Board of Directors on 20 June, 2024.
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