Note 1. Significant Accounting Policies 1.1 Basis of Accounting a. The financial statements of the Company have been brpared under the historical cost convention in accordance with the Accounting standards specified by Companies (Accounts) Rules, 2014 and provisions of the Companies Act, 2013, to the extent applicable. b. All financial transactions have been recognized on accrual basis. The brparation of financial statements in conformity with the GAAP requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The Management believes that the estimates used in the brparation of the financial statements are prudent and reasonable. Future results could differ from those estimates. 1.2 Use of Estimates In brparation of financial statements conforming to GAAP requirements certain estimates and assumptions are essentially required to be made with respect to items such as provision for doubtful debts, future obligations under employee retirement benefit plans, income taxes and the useful life period of Fixed Assets. Due care and diligence have been exercised by the Management in arriving at such estimates and assumptions since they may directly affect the reported amounts of income and expenses during the year as well as the balances of Assets and Liabilities including those which are contingent in nature as at the date of reporting of the financial statements. To comply with GAAP requirements relating to impairment of assets, if any, the Management periodically determines such impairment using external and internal resources for such assessment. Loss, if any, arising out of such impairment is expensed as stipulated under the GAAP requirements. Contingencies are recorded when a liability is likely to be incurred and the amount can be reasonably estimated. To this extent the results may differ from such estimates. 1.3 Revenue Recognition As a consistent practice, the Company recognizes revenues on accrual basis. Revenue from sale of undivided share of land is recognised upon transfer of all significant risks and rewards of ownership. Revenue from dividend is recognised upon right to receive the dividend is established. Revenue from Sporting activity are recognized on accrual basis, with cost of services provided for proportionately. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. 1.4 Fixed Assets Fixed Assets are stated at the cost of acquisition less accumulated debrciation. The cost of acquisition includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets 1.5 Debrciation Debrciation is provided on straight-line method at the rates brscribed under Schedule II of the Companies Act, 2013 , as amended. 1.6 Impairment All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss being the excess of carrying value over the recoverable value of the assets, are charged to the Statement of Profit and Loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessment in the subsequent years. 1.7 Investments Long-term investments are stated at cost, less diminution other than temporary in the value of such investments, if any. Current investments are valued at cost or market value which ever is lower. 1.8 Inventories Inventories primarily constitute land and related development activities, which is valued at lower of cost or Net Realizable Value. Cost comprises of all expenses incurred for the purpose of acquisition of land, development of the land and other related direct expenses. 1.9 Employee Benefits Gratuity The liability as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with revised Accounting Standard 15 (Revised 2005) on "Employee Benefits" as at the end of the period. Actuarial Gains/Losses are recognized immediately in statement of Profit and Loss. Leave Encashment Leave encashment is paid for in accordance with the rules of the Company and provided based on an actuarial valuation as at the balance sheet date. Actuarial Gains/Losses are recognized immediately in statement of Profit and Loss. Other Benefit Plans Contributions paid/ payable under defined contribution plans are recognized in the statement of Profit and Loss in each year. Contribution plans primarily consist of Provident Fund administered and managed by the Government of India. The company makes monthly contributions and has no further obligations under the plan beyond its contributions. 1.10 Taxes on Income a. Provision for current tax is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961. b. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed debrciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits. 1.11 Earnings Per Share The earnings considered for ascertaining the Company's Earnings Per Share comprises the net profit after tax. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted EPS comprises the weighted average shares considered for deriving basic EPS, and also the weighted average number of equity shares that would be issued on the conversion of all dilutive potential equity shares. 1.12 Borrowing Cost Expenditure on borrowing cost on the loans obtained specifically for acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. All other borrowing costs are charged to statement of profit and loss. 1.13 Foreign Currency Transactions Foreign currency transactions are translated at the exchange rates brvailing on the respective date of transactions. Assets and Liabilities outstanding in foreign currency as on the date of the Balance Sheet are translated at exchange rates brvailing as on the last day of the relevant financial year. Differences rising out of such translations are charged to the statement of profit and loss. 1.14 Leases The assets purchased under hire purchase agreements are included in the Fixed Assets block. The value of the asset purchased is capitalized in the books. A liability for the same amount is created at the time of entering into the agreement. The payments are made to the HP vendors as per the EMI's given in the hire purchase agreements. The finance charges are debited to the statement of profit and loss and the principal amount is adjusted against the liability created for the vendor. Lease rental in respect of operating lease arrangements are charged to expense on a straight-line basis over the term of the related lease agreement. 1.15 Cash Flow Statement The Cash flow statement is brpared under the indirect method as per Accounting Standard 3 "Cash Flow Statements". 1.16 Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized when the Company has an obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any brsent obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. 1.17 Segment Reporting The Company is engaged in Real Estate/Urban Infrastructure and Sports activities. These are reportable segments for the year. Entire operations of the company is only in domestic hence reportable geographical segment does not arise. Segment wise Income, expenses, assets and liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of cost plus margins. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities". Note 1 Other Items a. Joint Development Agreement(JDA) for Perambur Project Based on the JDA entered between the company and the developers, the Company received Rs.1029.73lakhs (PY: Rs.3404.67lakhs) as its share of collections from the Project. As per the policy on the revenue recognition, the company has recognized revenue for the year Rs.3841.52lakhs (PY 6002.24lakhs) and the balance are shown as Advance received for sale of UDS. b. Sporting Activities a. During the year the sports activities relating to Indian Badminton League (IBL) was not conducted by Sporty Solutionz (P) Ltd Organisers of IBL and hence there are no revenues for the year from IBL. (PY 345.00 Lakhs) b. During the year 2014-15 the company has won the runners up title for Indian Super League Season I by Kerala Blasters FC, a franchisee owned by the company. Gross revenue of Rs.1494.61 lakhs have been recognized and shown under Revenue from Operations. 24.2 The Company is engaged in the development of Real Estate/Urban infrastructure and Sports activities. Disclosure as required by Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is given below. 2. During the year the holding company , Platex Ltd, transferred the 14.5% Fully Convertible Debentures(FCD) to M/s India Investments II pte Ltd, Singapore with the same terms and conditions. These FCD holders have a option to convert them as equity anytime before 31 March 2016. The company have paid the interest on these FCDs during the year 2014-15. 3. Non-current investments in quoted shares : The market value of long term investments in quoted equity shares of Picture House Media Ltd (PHML) as on 31.3.2015 was Rs.301.78 lakhs as against the cost of Rs.531.05 lakhs. The management have provided Rs.200 lakhs as provisions for diminution in value of quoted investments. Company have struck off Investments( Rs. 2 lakhs) and long term advances (Rs.3051 lakhs) for which necessary provisions were already made in the earlier years and no significant improvement is expected in the near future. Since the provision is already made there is no impact of the same in the current year operations. 4. The Company PVP Ventures Ltd (PVPVL) has entered into a participation agreement with Football Sports Development Ltd(FSDL) for acquiring the franchisee rights of Kerala Blaster FC. PVPVL have incorporated a Subsidiary company by name Blaster sports ventures private ltd(BSVPL) with a object of creating a SPV for the said Kerala Blaster FC. In furtherance of the objective a Novation agreement dated 19 March 2015 was entered into between Football Sports Development Ltd, Blaster Sports Ventures Private Ltd(BSVPL) and PVP Ventures Ltd (PVPVL). By virtue of the said Novation agreement all the Franchisee rights and obligations on Kerala Blasters FC was transferred and vested with BSVPL. During the year 2014-15 net impact amounting to Rs.3316.52 lakhs for operations on first season of Football league was transferred and absorbed by BSVPL and in consideration of which BSVPL issued 3,31,65,200 of Rs.10 each of 1% Compulsory Convertible Cumulative Debentures to PVPVL. 5. Non-convertible debentures(NCD) subscribed in the subsidiary company ie NCCPL , which was utilized for acquiring land by NCCPL. The company has initiated the process of converting these NCDs during 2013-14 as secured interest free loan. The charge held by Debenture trustees have been released on 16 March 2015. Based on the rebrsentation from NCCPL , company have waived the interest from 1 April till the date of conversion. To facilitate the company in getting the land securitization and generating revenues by utilizing the land in development activities, the company has created charge with ROC in the land assets for the loan amount and same have been shown under Secured loans and advances. 6. With regard to the Investments and Loans and Advances to subsidiary companies, considering the business potential of these companies, generation of revenues, expected development of Projects, cash flows expected and recoverability of the securities, the provisions already made have been reviewed. The Management considers that the provision made is adequate and do not foresee any diminution in carrying value as of 31 March 2015. 7. The Company has not received any intimation from suppliers, regarding their status, under Micro, Small and Medium Enterprises Development Act, 2006 and hence the required disclosures such as amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given. 8. The Company has not entered into any Derivative transactions during the year. There are no outstanding foreign currency exposures. 9. The Company has accumulated business losses and debrciation of earlier years. Considering the principles of prudence, the net deferred tax asset has not been recognised as at 31.03.2015. 10. Corporate Social Responsibility(CSR) As per section 135 of companies act 2013, the company should have spent Rs. 32.74 lakhs, towards CSR activities during the year 2014-15. Management have formed the CSR Committee and Policy in respect of the same, but could not effect payment before 31st March 2015 and the same will be expensed during the current financial year 2015-16. 11. The brvious years figures have been regrouped/rearranged wherever necessary to make it comparable with the current year figures. As per report of our even date For and on behalf of the Board of Directors FOR M/S. CNGSN & ASSOCIATES LLP Chartered Accountants Firm Reg.No.004915S R. THIRUMALMARUGAN PRASAD V. POTLURI R. NAGARAJAN Partner Chairman and Managing Director Director M. No : 200102 KANNAN S. Head-Finance and Accounts G.S.V.RANGA Head-Legal and Company Secretary DATE: MAY 29, 2015 PLACE: HYDERABAD |