Annual Report

Transcription

1 A decade in innovative resolution - Through reructuring and revival

2 Board of Directors Sri. D. Seearamaiah Chairman Dr. Pamidi Kotaiah Director Sri. Vepa Kamesam Director Ms. K. Sujaa Rao Director Sri. M. Gopalakrishnaiah Whole-time Director Sri. M.Siva Rama Vara Prasad Director Dr. Murali Krishna Prasad Divi Director Sri. Rajeev Puri Nominee Director Senior Executives Sri. Ch. Rama Prasad Chief Executive Officer Sri. K. Balakoteswara Rao Vice President Sri. J. Mallaiah Vice President Sri. K. Ramakrishna Prasad Vice President

3 Pridhvi Asset Reconruction And Securitisation Company Limited Contents Notice to shareholders 04 Directors' Report 07 Auditors' Report 32 Balance Sheet 38 Statement of Profit and Loss 39 Cash Flow Statement 40 Notes to Financial Statements 41 Auditors M/s. K.S. Rao. & Co. Chartered Accountants # 403 & 404, Golden Green Apts., Irrum Manzil Colony, Hyderabad Tel: /4 Fax: Bankers Andhra Bank Corporate Finance Branch, Hyderabad. HDFC Bank Rajbhavan Road, Hyderabad. Regiered & Corporate Office D.No: 1-55, Raja Praasadamu, 4 Floor, Masjid Banda Road, Kondapur, Hyderabad Tel: , Fax: co@paras.org.in, Web: 1

4 Pridhvi Asset Reconruction And Securitisation Company Limited The Philosophy... Vision To create value to e akeholders rough focused and pro-active approach in revival and reconruction of impaired assets. l l l l Mission To foer innovation and novelty in revival and resolution of ressed assets rough application of be legal, financial and managerial skills. To contribute in developing a rong market for diressed assets. To build a rong brand, recognized for its transparency, eical practices and efficiency in resolution of ressed assets. To grow conantly in its financial, human and intellectual capital to serve e growing demands of e indury. l l l l l Values Efficient Management The Promoters, Directors and e Management team work wi a deep sense of underanding and commitment in achieving company s objectives. Service To respond to clients' needs wi passion; adding qualitative and quantitative value to e service. Transparency To build a rong brand recognized for its transparency, eical practices and efficiency in resolution of ressed assets. Professional Excellence To act responsibly wi high degree of honey and integrity and to rive for personal and professional excellence. Performance To provide effective, efficient and accountable support and be responsive to change, develop and execute plans at will deliver be results. 2

5 Pridhvi Asset Reconruction And Securitisation Company Limited Journey us far Parameter Equity Assets Acquired Acquisition Co SRs issued during e year SRs redeemed during e year Total Income Profit Before Tax Dividend % Earnings per Share (In R)

6 Pridhvi Asset Reconruction And Securitisation Company Limited Notice is hereby given at e Ten Annual General Meeting of e company will be held on Saturday, e 16 September, 2017 at p.m. at Door No.1-55, 6 Floor, Raja Praasadamu, Masjid Banda Road, Kondapur, Hyderabad to transact e following business: Ordinary Business 1. To receive, consider and adopt e Audited Balance Sheet, e atement of Profit and Loss and e Cash Flow Statement for e year ended 31 March, 2017 togeer wi Directors and Auditors Reports ereon. 2. To appoint a Director in place of Sri. M. Siva Rama Vara Prasad (DIN No ), who retires by rotation and being eligible, offers himself for re-appointment. 3. Appointment of Auditors To consider and if ought fit to pass wi or wiout modifications e following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to e provisions of Section 139 and oer applicable provisions, if any, of e Companies Act, 2013 and e Rules framed ereunder, as amended from time to time, M/s. C.V. Ramana Rao & Co., Chartered Accountants, be and are hereby appointed as Auditors of e company to hold office from e conclusion of is Annual General Meeting till e conclusion of e 15 Annual General Meeting of e company to be held in e year 2022 (subject to ratification of eir appointment at every Annual General Meeting) and auorize e Board of Directors to fix eir remuneration. Special Business Notice 4. To consider and if ought fit to pass wi or wiout modifications e following resolution as a Special Resolution: RESOLVED THAT pursuant to e provisions of Section 196, Section 197 read wi Schedule V and oer applicable provisions, if any, of e Companies Act, 2013, approval be and is hereby accorded for reappointment of Sri. M. Gopalakrishnaiah (DIN No ) as e Whole-time Director of e company for a period of two years from 27 June, 2017 wi a remuneration of R1,65,000/- (Rupees One Lakh and Sixty Five Thousand only) per mon w.e.f. 27 June, RESOLVED FURTHER THAT notwianding anying contained in e above resolution Sri.M.Gopalakrishnaiah, Whole-time Director of e company be entitled to minimum remuneration as above, in case of loss or inadequacy of profits in any financial year. Regiered Office D.No.1-55, Raja Praasadamu, 4 Floor, Wing-I, Masjid Banda Road, Kondapur, Hyderabad CIN: U67120TG2007PLC Website: id: co@paras.org.in Dated: By order of e Board M. Gopalakrishnaiah Whole-time Director DIN No

7 Pridhvi Asset Reconruction And Securitisation Company Limited Notes 1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING, IS ENTITLED TO APPOINT A PROXY OR PROXIES WHO CAN ATTEND AND VOTE INSTEAD OF THE MEMBER AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. 2) The Proxy Form duly completed mu be lodged at e Regiered Office of e company at lea 48 hours before e time fixed for e meeting. 3) Corporate Members intending to send eir auorized representatives are requeed to send a duly certified copy of e Board resolution auorizing eir representatives to attend and vote at e Annual General Meeting. 4) Members are requeed to intimate immediately any change in eir address quoting eir Regiered Folio enabling e company to address future communication. 5) Members holding shares in dematerialized form are requeed to intimate all changes pertaining to eir bank details, mandates, nominations, change of address, contact details, etc. to eir Depositary Participant (DP). Changes intimated to e DP will en be automatically reflected in e company s records which will help e company and e Company s Regirars and Transfer Agents, M/s. Karvy Computershare Pvt. Ltd. to provide efficient and better services. 6) Explanatory atement pursuant to section 102(1) of e Companies Act, 2013 wi respect to e special business set out in e Notice is annexed. Regiered Office D.No.1-55, Raja Praasadamu, 4 Floor, Wing-I, Masjid Banda Road, Kondapur, Hyderabad CIN: U67120TG2007PLC Website: id: co@paras.org.in Dated: By order of e Board M. Gopalakrishnaiah Whole-time Director DIN No

8 Pridhvi Asset Reconruction And Securitisation Company Limited Statement pursuant to Section 102(1) of e Companies Act, 2013 ("Act") Item No. 4: The following Statement set out all material facts relating to Item No.4 mentioned in e accompanying Notice. Pursuant to Sections 196 and 197 read wi Schedule V and oer applicable provisions, if any, of e Companies Act, 2013, e tenure of Sri. M. Gopalakrishnaiah as e Whole-time Director of e company was extended for a period of two years w.e.f. 27 June, 2015 by a Special Resolution passed in e Annual General Meeting held on 7 September, Based on e recommendations of e Nomination and Remuneration Committee, e Board opines at Sri. M. Gopalakrishnaiah s continuance as a Whole-time Director will be of immense benefit to e company. Hence, e Board of Directors of e company in its meeting held on 13 June, 2017 has reappointed him for a furer period of two years i.e., from 27 June, 2017 to 26 June, The revised remuneration would be in line wi e limits provided in Section 196 and 197 of e Companies Act, 2013 read wi Schedule V. None of e oer Directors, Key Managerial Personnel of e company or eir relatives, except Sri. M. Gopalakrishnaiah is intereed in e above resolution. The Board recommends e resolution set for in Item No. 4 of e Notice for e approval of e Members. Regiered Office D.No.1-55, Raja Praasadamu, 4 Floor, Wing-I, Masjid Banda Road, Kondapur, Hyderabad CIN: U67120TG2007PLC Website: id: co@paras.org.in Dated: By order of e Board M. Gopalakrishnaiah Whole-time Director DIN No

9 Pridhvi Asset Reconruction And Securitisation Company Limited Dear Members, Directors Report Your Directors are pleased to present e 10 togeer wi e audited accounts of e company for e financial year ended 31 March, Financial Results The performance of e company for e year ended 31 March, 2017 is summarized below: Particulars Total Income Total Expenditure Earnings before Intere, Tax, Depreciation and Amortization (EBITDA) Less: Finance charges Less: Depreciation Profit Before Tax and Exceptional items (PBT) Add: Exceptional items - - Less: Provision for Tax Profit after Tax (PAT) Surplus brought forward from previous year Less: Assets adjued to retained earnings as per Sch II - - Less: Deferred tax adjument on e above - - Profit available for Appropriation Appropriations - Transfer to General Reserve Interim Dividend including tax Balance carried to Balance Sheet Earnings Per Share of R 100 (in R) The company s gross income for e financial year ended 31 March, 2017 was R1767 Lakhs compared to R3022 Lakhs of e previous year. Profit Before Tax (PBT) of e company was R1082 Lakhs and net profit for e year was R 694 Lakhs. The company s net wor as on 31 March, 2017 ood at R11235 Lakhs. Performance of e Company Your company poed a reduced profit of R694 Lakhs only due to legal obacles faced in realizing income from sale of certain assets in Protracted litigation and delay in disposal of cases in DRTs and courts are reasons for slow progress in realizations and low profitability. 7

10 Pridhvi Asset Reconruction And Securitisation Company Limited Being aware of e problems faced by banks and ARCs in resolution of ressed assets, e Government of India and e Reserve Bank of India have initiated certain measures which are discussed at leng in e Management Analysis. A summary of e debts acquired and realized during e financial year is given below. Acquired Number of seller Banks/FIs 43 7 Debt acquired Co of acquisition Recovered Number of Accounts Amount recovered Share Capital There is no change in e capital ructure of e company during e year Dividend Your Directors do not recommend any dividend for e financial year ended 31 March, Transfer to Reserves Your Directors have recommended transfer of R200 Lakhs to e General Reserve and e balance of R 510 Lakhs is retained in e Statement of Profit and Loss. Management Discussion and Analysis The one single issue relating to banking which was discussed, debated and acted upon during e FY is e urgent need for reducing e level of ressed assets in e banking indury in our country. The alarming grow of ressed assets in banking has forced e auorities concerned to initiate ern measures, notable among em being amendments to SARFAESI Act and RDDB Act; and introduction of Insolvency and Bankruptcy Code (IBC). All credit to e Government of India and e Reserve Bank of India for bringing about revolutionary changes. Needless to add at a little time be given for effective implementation of all e amendments and provisions brought in. In addition to e problems faced by e banks wiin e country, global factors like protectionism, disruption of global trade in some countries resulted in slower flow of capital. Thus e process of de-globalisation resulted in subantial downside in e grow of e economy. Banks are armed wi e requisite much awaited legal provisions for tackling e problem of ressed assets. The Government of India has also recently amended e Banking Regulation Act empowering e Reserve Bank of India to identify large value ressed assets and directing Banks to refer ese accounts to National Company Law Tribunal. Though ere are certain hiccups in e process, ese measures are expected to deliver e 8

11 Pridhvi Asset Reconruction And Securitisation Company Limited desired results and also act as a deterrent for borrowers from making willful default. The onus now lies on individual banks managements to take lead and get rid of eir bad loans portfolio. Future Prospects Indury circles and certain rating agencies predict at banks are likely to face e same ress of bad loans in e coming two / ree years. The gross NPAs of banks which ood at R7.65 Lakh Crores as at e end of March, 2017 is likely to increase to R8.2 Lakh Crores by March, Added to is, banks have to gear up for resolution of reructured debts amounting to R4 Lakh Crores approximately. The recently amended provisioning norms on sale of ressed assets to ARCs by banks on SR basis and e directive of e Reserve Bank of India to make a provision of 50% of e outanding debt in respect of e accounts referred to NCLT and furer increase e provision to 100% when e asset is to be resolved rough sale, will force e banks to hive off eir ressed assets at a deep discount on sale of NPAs on cash basis or wi a high component of cash on SR basis. This will provide a big opportunity for ARCs to acquire nonperforming assets on cash basis at a deep discount. However, it should be noted at e resources available to e ARCs in e form of equity or borrowings is very meager compared to e huge quantum of ressed assets put for sale. Thus ARCs which can raise funds in e form of debt or participation in SRs have an advantage over oers. The need for raising resources for e company is in priority for your Directors and e management is in e process of identifying suitable avenues. Your company has working capital borrowings of R50 crores and raised inter corporate loans of R4 crores in e current financial year. The management is in dialogue wi few oer invement houses to explore e possibilities and are confident at ese efforts would materialize in e current financial year and enable your company to take a leap forward in e coming years. Risk Management Your company is engaged in acquisition and resolution of ressed assets. Mo often e accounts are in nonperforming age for a considerable period of time resulting in erosion of value of fixed assets. Your company is vigilant in acquisition of assets backed by securities wi regard to eir valuations and enforceability of security intere. This apart e persiing delays in resolving legal issues and non-availability of information relating to atutory dues of defaulted borrowers is a cause of concern, since e realizations from sale of secured assets are to be shared wi atutory auorities. Furer e general level of economic activity in e country also plays a major role in e resolution process. Your company is conscious of ese inherent risks involved in dealing in ressed assets and has put in place required safeguards to overcome e problems. Internal Control Syems and Controls Your company s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding e reliability of financial reporting and e preparation of financial atements for external purposes in accordance wi e generally accepted accounting principles. 9

12 Pridhvi Asset Reconruction And Securitisation Company Limited Corporate Governance Corporate Governance is e set of processes, cuoms, policies and laws affecting e way a company is directed, adminiered or controlled. It is a syem of ructuring, operating and controlling a company wi a view to achieve long term rategic goals to satisfy shareholders, creditors, employees and cuomers. Transparency and accountability are e two basic requirements of corporate governance. Your company s corporate governance philosophy is based on e following principles: l l l l l The andards to satisfy e spirit and letter of law. To ensure transparency and a high level of disclosure. To have a transparent corporate ructure. The management is e truee of e shareholders capital and not e owner. To communicate trufully about how company is run internally. Board of Directors and Committees of e Board Your company believes at an enlightened Board consciously creates a culture of leadership to provide long term vision and policy. The Board s actions and decisions are aligned wi e company s be interes. The Board critically evaluates your company s rategic direction, management policies and eir effectiveness. The nomination and remuneration committee recommends persons of eminence in eir respective fields. The Board formulates policies and provides rategic direction to e management in achieving corporate objectives and furer ensures e atutory and regulatory compliances, safeguarding e intere of e shareholders. The Board has conituted four committees, namely Audit Committee, Executive Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee. The Board met 6 times during e year on , , , , and Attendance of Directors at Board Meetings and at e la Annual General Meeting held on during : Name of e Director Category Attendance at meetings during Board Meetings La AGM Sri. D. Seearamaiah, Chairperson Independent Director 6 Yes Dr. Pamidi Kotaiah Independent Director 6 Yes Sri. Vepa Kamesam Independent Director 5 Yes Ms. K. Sujaa Rao Independent Director 5 No Sri. M. Siva Rama Vara Prasad Promoter Director 4 Yes Dr. Murali Krishna Prasad Divi Promoter Director 4 Yes Sri. Rajeev Puri Director nominated by 2 Yes M/s. Punjab National Bank Sri. M. Gopalakrishnaiah Whole-time Director 6 Yes 10

13 Pridhvi Asset Reconruction And Securitisation Company Limited No Director is related to any oer Director on e Board in terms of e definition of Relative given under e Companies Act, Audit Committee 1. Dr. Pamidi Kotaiah - Chairperson (w.e.f ) 2. Sri. D. Seearamaiah 3. Sri. Vepa Kamesam - Chairperson (upto ) 4. Sri. M. Gopalakrishnaiah The Audit Committee, inter-alia, oversees e financial reporting process aimed at ensuring correctness, fairness, sufficiency and credibility of financial atements, recommendation of appointment of atutory auditors and eir remuneration, review of quarterly and annual financial atements before submission to e Board, review of e adequacy of internal control syems and e internal audit functions. The Audit Committee met 4 times during e financial year on , , and Executive Committee 1. Sri. D. Seearamaiah - Chairperson 2. Sri. M. Siva Rama Vara Prasad 3. Dr. Murali Krishna Prasad Divi 4. Dr. Pamidi Kotaiah 5. Sri. M. Gopalakrishnaiah The Executive Committee is empowered to take decisions relating to sanction of proposals for acquisition of financial assets, invements in security receipts, reconruction and resolution of financial assets and matters relating to appointment of aff, fixation of eir remuneration, promotions, etc. The Executive Committee also recommends policy matters to e Board. The Committee met 12 times during e financial year on , , , , , , , , , , and Nomination and Remuneration Committee 1. Sri. M. Siva Rama Vara Prasad - Chairperson 2. Sri. D. Seearamaiah 3. Dr. Pamidi Kotaiah Pursuant to Section 178 of e Companies Act, 2013 ( Act ), e company has conituted a Nomination and Remuneration Committee. The Committee formulated e Nomination and Remuneration policy for approval of e Board. The Committee formulates e criteria for determining qualifications, positive attributes and independence of a director from time to time. The Committee also carries out evaluation of Directors performance. 11

14 Pridhvi Asset Reconruction And Securitisation Company Limited The Nomination and Remuneration Committee recommends to e Board of Directors regarding remuneration payable to e members of e Board and terms of employment of e senior executives of e company and in setting a Remuneration policy. The Committee supervises at e terms of employment of employees are in line wi e Remuneration Policy. The Nomination and Remuneration policy of e company is made available on e website. The Committee met twice during e financial year on and Corporate Social Responsibility Committee 1. Sri. D. Seearamaiah - Chairperson 2. Sri. Vepa Kamesam 3. Sri. M. Siva Rama Vara Prasad 4. Sri. M. Gopalakrishnaiah Pursuant to Section 135 of e Companies Act, 2013, e company has conituted Corporate Social Responsibility (CSR) Committee wi e above mentioned Directors for carrying out e CSR activities as per Schedule VII of e said Act. The CSR Committee formulates e CSR policy for approval of e Board. The Committee initutes a transparent mechanism for implementation of e CSR activities or programs or projects undertaken by e company and monitors e CSR policy. The Committee met once during e financial year on Independent Directors meeting Pursuant to Section 149(8) read wi Clause VII(3) of Schedule IV of e Companies Act, 2013, e Independent Directors had separately met once during e financial year on to assess e quality, quantity and timeliness of flow of information between e company management and e Board at is necessary for e Board to effectively and reasonably perform eir duties and to review e performance of e Chairperson of e company, taking into account e views of executive directors and non-executive directors. Directors As per e provisions of Sections 149 of e Companies Act, 2013, each of e Independent Directors have submitted declaration at he / she meets e criteria of independence as provided in Section 149(6) of e Act, and ere has been no change in e circumances which may affect eir atus as an independent director during e year. None of e independent directors are due for re-appointment. As e tenure of Sri. M. Gopalakrishnaiah, Whole-time Director of e Company is upto , based on recommendations of e Nomination and Remuneration Committee, e Board of Directors of e Company in its meeting held on 13 June, 2017 has recommended to Members for his reappointment for a furer period of two years i.e., from 27 June, 2017 to 26 June, In accordance wi e provisions of e Articles of Association of e Company and provisions of Section 152 of e Companies Act, 2013, Sri. M. Siva Rama Vara Prasad, retires by rotation at e ensuing General Meeting and being eligible, offers himself for re-appointment. 12

15 Pridhvi Asset Reconruction And Securitisation Company Limited Key Managerial Personnel Sri. D. Nanha Ram resigned as Chief Executive Officer of e company on Sri. Ch. Rama Prasad was appointed as Chief Executive Officer and joined e Company on on receipt of no objection from e Reserve Bank of India. Tenure of Sri. M. Gopalakrishnaiah, Whole-time Director has been recommended for extension, as mentioned above in e Directors column. There is no change in oer Key Managerial Personnel, Sri. V. S. Ranga Rao, Chief Financial Officer and Ms. V. Vani, Company Secretary. Board Evaluation The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to e provisions of e Act. The performance of e Board was evaluated by e Board after seeking inputs from all e Directors on e basis of criteria such as e Board composition and ructure, effectiveness of Board processes, information and functioning, etc. The performance of e committees was evaluated by e Board after seeking inputs from e committee members on e basis of e criteria such as e composition of committees, effectiveness of committee meetings, etc. Auditors Pursuant to Section 139 of e Companies Act, 2013, e rules framed ereunder, M/s. K. S. Rao & Co., Chartered Accountants, were appointed as Auditors of e Company to hold office from e conclusion of e Seven Annual General Meeting of e Company held on 6 Augu, 2014 for a term of ree years. The term of eir office will be completed at e conclusion of e ensuing Annual General Meeting. The Board of Directors placed on record its appreciation for e services rendered by M/s. K.S.Rao & Co., as Statutory Auditors. The resolution seeking approval of e Members for appointment of M/s. C.V. Ramana Rao & Co., Chartered Accountants as Statutory Auditors of e company has been incorporated in e notice of e ensuing Annual General Meeting of e company. Statutory Auditors report and Secretarial Auditors report The Statutory Auditors report and Secretarial Auditors report do not contain any qualifications, reservations or adverse remarks. Report of e secretarial auditor is given as Annexure I which forms part of is report. Particulars of loans, guarantees or invements The company has not granted any loans or made any invements and not extended guarantees for any individuals or corporates under Section 186 of e Act during e year Particulars of contracts or arrangements wi related parties The company has entered into contracts or arrangements pursuant to Section 188(1) of e Act during e financial year wi related parties, in e ordinary course of business and at arm s leng basis. Furer, e company had not entered into any contract or arrangement wi related party during e year not at arm s leng basis. Form AOC-2 is given as Annexure II. 13

16 Pridhvi Asset Reconruction And Securitisation Company Limited Corporate Social Responsibility Extract of Annual Return Fixed Deposits Directors Responsibility Statement The brief outline of e Corporate Social Responsibility (CSR) Policy of e company and e initiatives undertaken by e company on CSR activities during e year are set out in Annexure III of is report in e format prescribed in e Companies (Corporate Social Responsibility Policy) Rules, The policy is available on e website of e company. As provided under Section 92(3) of e Act, e extract of Annual Return is given in Annexure-IV in e prescribed Form MGT-9, which forms part of is Report. The Company has not accepted / invited any deposits from e public in terms of section 73 of e Companies Act, Pursuant to requirement under Section 134(5) of e Companies Act, 2013, wi respect to Directors Responsibility Statement, it is hereby confirmed at: (I) In e preparation of e annual accounts for e year ended 31 March, 2017, e applicable accounting andards have been followed along wi proper explanations relating to material departures; (ii) The Directors have selected such accounting policies and applied em consiently and made judgments and eimates at are reasonable and prudent so as to give a true and fair view of e ate of affairs of e company as at 31 March, 2017 and of e profit of e company for e year ended on at date; (iii) The Directors have taken proper and sufficient care for e maintenance of adequate accounting records in accordance wi e provisions of e Companies Act, 2013 for safeguarding e assets of e company and for preventing and detecting fraud and oer irregularities; (iv) The Directors have prepared e annual accounts of e company for e year ended 31 March, 2017 on a going concern basis; and (v) The Directors had devised proper syems to ensure compliance wi e provisions of all applicable laws and at such syems were adequate and operating effectively. Particulars of Employees The atement showing details of employees as required under Section 197 of e Companies Act, 2013 read wi Rule 5(2) of e Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required to be appended as none of e employees are drawing salary as ipulated in e section under reference. Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo As e company is engaged in asset reconruction and securitisation activities, e particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of e Companies Act, 2013 are not applicable to e company. 14

17 Pridhvi Asset Reconruction And Securitisation Company Limited Acknowledgements Your Directors would like to express eir sincere gratitude to e Shareholders, Reserve Bank of India, Banks, Financial Initutions, Government Auorities and oer ake holders for e continued support and fai reposed in e company. Your Directors also wish to place on record eir deep sense of appreciation to all e members of aff for eir dedicated commitment and contribution to e company s grow and performance. For and on behalf of e Board of Directors Place: Hyderabad Date : D. Seearamaiah Chairperson 15

18 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure - I to Directors Report Form No. MR-3 Secretarial Audit Report For The Financial Year To [Pursuant to Section 204(1) of e Companies Act, 2013 and rule No.9 of e Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Pridhvi Asset Reconruction and Securitisation Company Limited, Hyderabad, Telangana. I have conducted e secretarial audit of e compliance of applicable atutory provisions and e adherence to good corporate practices by Pridhvi Asset Reconruction and Securitisation Company Limited (hereinafter called e company ). Secretarial Audit was conducted in a manner at provided me a reasonable basis for evaluating e corporate conducts/atutory compliances and expressing my opinion ereon. Based on my verification of e Pridhvi Asset Reconruction and Securitisation Company Limited books, papers, minute books, forms and returns filed and oer records maintained by e company and also e information provided by e Company, its officers, agents and auorized representatives during e conduct of secretarial audit, I hereby report at in my opinion, e company has, during e audit period covering from April 1, 2016 to March 31, 2017 complied wi e atutory provisions lied hereunder and also at e Company has proper Board-processes and compliance-mechanism in place to e extent, in e manner and subject to e reporting made hereinafter: (1) I have examined e books, papers, minute books, forms and returns filed and oer records maintained by Pridhvi Asset Reconruction and Securitisation Company Limited for e period covering from April 1, 2016 to March 31, 2017 according to e provisions of: i. The Companies Act, 1956 and e Companies Act, 2013 (e Act) and e rules and amendments made ere under; e Memorandum and Articles of Association erein. ii. The Securities Contracts (Regulation) Act, 1956 ( SCRA ) and e rules made ere under; iii. The Depositories Act, 1996 and e Regulations and Bye-laws framed ere under; iv. Foreign Exchange Management Act, 1999 and e rules and regulations made ere under to e extent of Foreign Direct Invement, Overseas Direct Invement and External Commercial Borrowings; v. The Reserve Bank of India Act, 1934 and vi. The Securitisation Companies and Reconruction Companies (Reserve Bank) Guidelines and Directions,

19 Pridhvi Asset Reconruction And Securitisation Company Limited Note: As e company is not lied e following regulations are NOT APPLICABLE vii. The following Regulations and Guidelines prescribed under e Securities and Exchange Board of India Act, 1992 ( SEBI Act ):- a) The Securities and Exchange Board of India (Subantial Acquisition of Shares and Takeovers) Regulations, 2011; b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; e) The Securities and Exchange Board of India (Issue and Liing of Debt Securities) Regulations, 2008; f) The Securities and Exchange Board of India (Regirars to an Issue and Share Transfer Agents) Regulations, 1993 regarding e Companies Act and dealing wi client; g) The Securities and Exchange Board of India (Deliing of Equity Shares) Regulations, 2009; and h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; I have also examined compliance wi e applicable clauses of e following: I) Secretarial Standards issued by The Initute of Company Secretaries of India. During e period under review e Company has complied wi e provisions of e Act, Rules, Regulations, Guidelines, Standards, etc. (2) I furer report at e Company has, in my opinion, complied wi e Provisions of e Companies Act, 1956 and e Rules made under at Act and of Companies Act, 2013 and e Memorandum and Articles of Association of e Company, wi regard to: i. Maintenance of various atutory regiers and documents and making necessary entries erein; ii. Closure of e Regier of Members; iii. Forms, Returns, Documents and Resolutions required to be filed wi e Regirar of Companies and e Central Government; iv. Service of documents by e Company on its Members, Auditors and e Regirar of Companies; v. Notice of Board meetings and Committee meetings of Directors; vi. The meetings of Directors and Committees of Directors viz Audit Committee, Executive Committee, Remuneration Committee and Corporate Social Responsibility Committee including passing of resolutions by circulation; vii. The 9 Annual General Meeting held on July 19, 2016; viii. Minutes of proceedings of General Meetings and of e Board and its Committee meetings; 17

20 Pridhvi Asset Reconruction And Securitisation Company Limited ix. Approvals of e Members, e Board of Directors, e Committees of Directors and e Government Auorities, wherever required; x. Conitution of e Board of Directors / Committee(s) of Directors. xi. xii. Payment of Remuneration to Directors including e Whole-time Director; Appointment and Remuneration of Chief Executive Officer (CEO); xiii. Appointment and Remuneration of Auditors; xiv. Declaration and payment of dividends; xv. There are no invements of company funds and no inter-corporate loans for e period. xvi. The Company doesn t have any subsidiaries; xvii. Form of Balance Sheet as prescribed under Part I, Form of Statement of Profit and Loss as prescribed under Part II and General Inructions for preparation of e same as prescribed in Schedule VI to e Act; xviii. There is no allotment of securities for e period; xix. The Directors report is according to e provisions; xx. Contracts, Common seal, Regiered Office and Publication of Name of e Company is as per e provisions; and xxi. Generally, all oer applicable provisions of e Act and e Rules made under e Act. xxii. The provisions of Corporate Social Responsibility (CSR) are complied. xxiii. The provisions wi regard to appointment of Woman Director are complied. (3) I furer report at: a) All e directors have complied wi e requirements as to disclosure of interes and concerns in contracts and arrangements, share holding/debenture holding and directorships in oer companies and interes in oer entities. b) The directors have complied wi e disclosure requirements in respect of eir eligibility of appointment, eir being independent and compliance wi e Code of Business Conduct & Eics for Directors and Management Personnel; c) The Company has obtained all necessary approvals under e various provisions of e Act; and d) There was no prosecution initiated and no fines or penalties were imposed during e period under review under e Companies Act, 1956, Companies Act, 2013, Securities Contract Regulation Act, 1956, The Reserve Bank of India Act, 1934 and e Depositories Act, 1996 and Rules, Regulations and Guidelines framed under ese Acts again / on e Company, its Directors and Officers. 18

21 Pridhvi Asset Reconruction And Securitisation Company Limited (4) The Company has complied wi e provisions of e Securities Contracts (Regulation) Act, 1956 and wi e provisions of The Securitisation Companies and Reconruction Companies (Reserve Bank) Guidelines and Directions, 2003 and e Rules made under at Act, wi regard to : a) Filing of quarterly returns to RBI. b) Wi respect to issuing of Security Receipts and c) The Company has not accepted any deposits from Public. (5) (6) (7) I furer report at e Company has complied wi e provisions of e Depositories Act, 1996 and e Bye-laws framed ere under by e Depositories wi regard to dematerialisation of securities and reconciliation of records of dematerialised securities wi all securities issued by e Company. There is no Foreign Exchange outflow and inflow for e period, hence e Company need not comply wi e provisions of Foreign Exchange Management Act, 1999 and e Rules and Regulations made under at Act to e extent applicable to ODI, FDI and ECB. I furer report at based on e information received and records maintained ere are adequate syems and processes in e Company commensurate wi e size and operations of e Company to monitor and ensure compliance wi applicable laws, rules, regulations and guidelines. For Devineni Sujaa & Associates Company Secretaries Place: Hyderabad Date : Sujaa Devineni Proprietor M.No. F8306 CP No This report is to be read wi our letter of even date which is annexed as Annexure A and forms an integral part of is report. 19

22 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure - A To, The Members, Pridhvi Asset Reconruction and Securitisation Company Limited, Hyderabad, Telangana. Our report of even date is to be read along wi is letter. 1) Maintenance of secretarial record is e responsibility of e management of e company. Our responsibility is to express an opinion on ese secretarial records based on our audit. 2) We have followed e audit practices and processes as were appropriate to obtain reasonable assurance about e correctness of e contents of e Secretarial records. The verification was done on te basis to ensure at correct facts are reflected in secretarial records. We believe at e processes and practices, we followed provide a reasonable basis for our opinion. 3) We have not verified e correctness and appropriateness of financial records and Books of Accounts of e company. 4) Where ever required, we have obtained e Management representation about e compliance of laws, rules and regulations and happening of events etc. 5) The compliance of e provisions of Corporate and oer applicable laws, rules, regulations, andards is e responsibility of management. Our examination was limited to e verification of procedures on te basis. 6) The Secretarial Audit report is neier an assurance as to e future viability of e company nor of e efficacy or effectiveness wi which e management has conducted e affairs of e company. For Devineni Sujaa & Associates Company Secretaries Place: Hyderabad Date : Sujaa Devineni Proprietor M.No. F8306 CP No

23 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure - II to Directors Report Form No. AOC -2 (Pursuant to clause (h) of sub-section (3) of section 134 of e Act and Rule 8(2) of e Companies (Accounts) Rules, 2014 Form for Disclosure of particulars of contracts/arrangements entered into by e company wi related parties referred to in sub section (1) of section 188 of e Companies Act, 2013 including certain arms leng transactions under ird proviso ereto. I. Details of contracts or arrangements or transactions not at Arm s leng basis. There were no contracts or arrangements or transactions entered into during e year ended 31 March, 2017, which were not at Arm s leng basis. II. Details of contracts or arrangements or transactions at Arm s leng basis. The details of contracts or arrangements or transactions at arm s leng basis for e year ended 31 March, 2017, are as follows. Name(s) of e related party and nature of relationship Nature of contracts / arrangements / transactions Duration of e contracts/ arrangements/ transactions Salient terms of e contracts or arrangements or transactions including e value, if any Date(s) of approval by e Board, if any Amount paid as advances if any M/s. Mezzequity Software Private Ltd. (Smt. M. Rajyalakshmi wife of Sri. M. Siva Rama Vara Prasad, Director, is a Director on eir Board) Maintenance of office premises 3 years w.e.f Maintenance charges@ R8.25 / sft. On par wi oer occupants of e building Executive Committee approved on M/s. BitKemy Ventures India Ltd. (Sri. M. Siva Rama Vara Prasad is Director in bo e companies) Development of software for operations - Co of Software R20.05 Lakhs plus maintenance Rs.5 Lakhs p.a For and on behalf of e Board of Directors Place: Hyderabad Date : M. Gopalakrishnaiah Whole-time Director 21

24 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure - III to Directors Report on Corporate Social Responsibility (CSR) activities for e financial year A brief outline of e Company s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to e web-link to e CSR policy and projects or programs. The core eme of e company s CSR policy is giving back to e society from which it draws its resources by extending a helping hand to e needy, e underprivileged and to contribute for activities at suain economic development of local community at large. It is e contribution of e corporate for philanropic and social causes like providing primary education and heal, drinking water, sanitation and such oer activities which would result in a better living environment. Through CSR initiatives, e company, in alignment wi its vision and environmental concern, will continue to enhance value creation in e society, so as to promote suained grow of e society, in fulfillment of its role as a Socially Responsible Corporate. Objectives The objectives of e Company s CSR Policy are to: l l l Ensure an increased commitment at all levels in e organization, to operate its business in an economically, socially and environmentally suainable manner, while recognizing e interes of all its akeholders. To directly or indirectly take up programmes at benefit e communities over a period of time in enhancing e quality of life & economic well-being of e local populace. The CSR activities undertaken by e company should create a social impact. The CSR Policy of e company is available on e website of e company. 2. The Composition of e CSR Committee 1. Sri. D. Seearamaiah - Chairperson 2. Sri. Vepa Kamesam 3. Sri. M. Siva Rama Vara Prasad 4. Sri. M. Gopalakrishnaiah 3. Average net profit of e company for la ree financial years - ` Lakhs 4. Prescribed CSR Expenditure (two per cent of e amount as in item 3 above) - `40.31 Lakhs 5. Details of CSR spent during e financial year a. Total amount to be spent for e financial year - R40.31 Lakhs b. Amount unspent, if any - Nil c. Manner in which e amount spent during e financial year is detailed below 22

25 Pridhvi Asset Reconruction And Securitisation Company Limited S.No CSR Project or activity identified Sector in which e project is covered Projects or programs (1) Local area or oer (2) specify e ate and dirict where projects or programs was undertaken Amount outlay (Budget) project or programswise Amount spent on e project or programs Sub-heads; (1) Direct Expenditure on projects or programs (2) Overheads Cumulative Expenditure up to e reporting period Amount spent Direct or rough implementing agency 1 Medical Promoting services, vocational training and education 2 Mobile van for conducting medical camps education, including vocation skills and Preventive healcare Promoting preventive heal care Andhra Pradesh We Godavari Telangana Hyderabad Implementing agency (Kovvali Development Tru) Implementing agency (Sri Satya Sai Tru) 3 Equipments for medical services Promoting Preventive healcare Telangana Adilabad Implementing agency (L.V.Prasad Eye Initute) 4 Education to Promoting poor tribal education children Andhra Pradesh Ea Godavari dirict Implementing agency (Centre for Development and Research) 6. In case e company has failed to spend e two per cent of e average net profit of e la ree financial years or any part ereof, e company shall provide e reasons for not spending e amount in its Board Report Not Applicable 7. A responsibility atement of e CSR Committee at e implementation and monitoring of CSR policy is in compliance wi CSR objectives and Policy of e company We hereby declare at implementation and monitoring of CSR Policy are in compliance wi CSR objectives and policy of e company. For and on behalf of e Board of Directors Place: Hyderabad Date : M. Gopalakrishnaiah Whole-time Director DIN No D. Seearamaiah Chairman CSR Committee 23

26 Pridhvi Asset Reconruction And Securitisation Company Limited I. Regiration And Oer Details: Annexure - IV to Directors Report Form No. MGT-9 Extract of Annual Return As on e financial year ended on 31 March, 2017 [Pursuant to Section 92(3) of e Companies Act, 2013 and Rule 12(1) of e Companies (Management and Adminiration) Rules, 2014] 1. CIN: U67120TG2007PLC Regiration Date: 27 March, Name of e Company: Pridhvi Asset Reconruction and Securitisation Company Limited 4. Category / Sub-Category of e Company: Public Company / Limited by shares 5. Address of e Regiered Office and contact details: D.No.1-55, Raja Praasadamu, 4 Floor, Wing-I, Masjid Banda Road, Kondapur, Hyderabad Tel: , Fax: Wheer lied company: No 7. Name, Address and Contact details of Regirar and Transfer Agent, if any: Karvy Computershare Private Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial Dirict, Nanakramguda, Hyderabad Tel: , Fax: II. Principal Business Activities of e Company: All e business activities contributing 10% or more of e total turnover of e company are given below: S.No. Name and Description of main products / services NIC Code of e % to total product/ service turnover of e company 1 Oer financial service activities, except insurance and pension funding activities % III. Particulars of Holding, Subsidiary and Associate Company: Nil 24

27 Pridhvi Asset Reconruction And Securitisation Company Limited IV. Shareholding Pattern (Equity share capital breakup as percentage of total equity) I) Category-wise Share Holding Category of Shareholders A. Promoters (1) Indian B. Public Shareholding a) Individual/ HUF b) Central Govt c) State Govt(s) d) Bodies Corp e) Banks / FI f) Any oer Total shareholding of Promoter (A1) (2) Foreign a) Individual/ HUF b) Central Govt c) State Govt(s) d) Bodies Corp e) Banks / FI f) Any oer Total shareholding of Promoter (A2) Total shareholding of Promoter A(1+2) Initutions No. of Shares held at e beginning of e year (As on 31 March 2016) Demat Physical Total % of Total Shares No. of Shares held at e end of e year (As on 31 March 2017) Demat Physical Total % of Total Shares % Change during e year a) Mutual Funds b) Banks / FI c) Central Govt d) State Govt(s) e) Venture Capital Funds f) Insurance Companies

28 Pridhvi Asset Reconruction And Securitisation Company Limited Category of Shareholders No. of Shares held at e beginning of e year (As on 31 March 2015) Demat Physical Total % of Total Shares No. of Shares held at e end of e year (As on 31 March 2016) Demat Physical Total % of Total Shares % Change during e year g) FIIs h) Foreign Venture Capital Funds i) Oers (specify) Sub-total (B)(1): Non-Initutions a) Bodies Corp. i) Indian ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto R 1 lakh ii) Individual shareholders holding nominal share capital in excess of R 1 lakh c) Oers (specify) Non Resident Indians Overseas Corporate Bodies Foreign Nationals Clearing Members Trus Foreign Bodies-D R Sub-total (B)(2): Total Public Shareholding (B)=(B)(1)+ (B)(2) C. Shares held by Cuodian for GDRs & ADRs Grand Total (A+B+C)

29 Pridhvi Asset Reconruction And Securitisation Company Limited ii) Shareholding of Promoter S No. Shareholder s Name Shareholding at e beginning of e year No. of Shares % of total Shares of e company % of Shares Pledged/ encumbered to total shares Share holding at e end of e year No. of Shares % of total Shares of e company % of Shares Pledged/ encumbered to total shares 1 Sri. Motaparti Siva Rama Vara Prasad Smt. M. Rajya Lakshmi Sri.M.Rohit Prasad Sri.Mukesh Kumar Manubhai Patel Sri.Bimal Manubhai Patel Sri.Manubhai Jeabhai Chhagan Bhai Patel M/s.Design Tribe India Pvt. Ltd Dr. Murali Krishna Prasad Divi Smt. Swarna Laa Divi Sri. Satchandra Kiran Divi % change in share holding during e year Total iii) Change in Promoters Shareholding (please specify, if ere is no change) At e beginning of e year Date wise Increase / Decrease in Promoters Shareholding during e year specifying e reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): Shareholding at e beginning of e year No. of Shares % of total Shares of e company Cumulative Shareholding during e year No. of Shares No change in e shareholding pattern of Promoters % of total Shares of e company At e end of e year 27

30 Pridhvi Asset Reconruction And Securitisation Company Limited iv) Shareholding Pattern of top ten Shareholders: (oer an Directors, Promoters and Holders of GDRs and ADRs): S No. For Each of e Top 10 Shareholders Shareholding at e beginning of e year No. of Shares % of total Shares of e company Cumulative Shareholding during e year No. of Shares % of total Shares of e company 1 Punjab National Bank Opening balance Transaction during e year Closing balance UCO Bank Opening balance Transaction during e year Closing balance M/s.Zen Securities Ltd Opening balance Transaction during e year Closing balance Smt. Radhika Donepudi Opening balance Transaction during e year Closing balance Andhra Bank Opening balance Transaction during e year Closing balance Sri. D. Babu Rao Opening balance Transaction during e year Closing balance Sri. Balasubramanian M.K. Opening balance Transaction during e year Closing balance Smt. M. Bharai Devi Opening balance Transaction during e year Closing balance Smt. B. Rajani Saria Opening balance Transaction during e year Closing balance Sri. Jayaram Naidu Bavikati Opening balance Transaction during e year Closing balance

31 Pridhvi Asset Reconruction And Securitisation Company Limited v) Shareholding of Directors and Key Managerial Personnel: Shareholding of each Directors and each Key Managerial Personnel At e beginning of e year a) Directors Shareholding at e beginning of e year No. of Shares % of total Shares of e company Cumulative Shareholding during e year No. of Shares % of total Shares of e company Sri. Motaparti Siva Rama Vara Prasad Sri. M. Gopalakrishnaiah Dr. Murali Krishna Prasad Divi b) Key Managerial Personnel Nil Date wise Increase / Decrease in Share holding during e year specifying e reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): No change in e shareholding pattern of Directors and Key Managerial Personnel V. Indebtedness Indebtedness of e Company including intere outanding/accrued but not due for payment Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness Indebtedness at e beginning of e financial year ( ) i) Principal Amount ii) Intere due but not paid iii) Intere accrued but not due Change in Indebtedness during e financial year Total (i+ii+iii) Nil Nil * Addition * Reduction Indebtedness at e end of e financial year ( ) Net Change Nil Nil i) Principal Amount ii) Intere due but not paid iii) Intere accrued but not due Total (i+ii+iii) Nil Nil

32 Pridhvi Asset Reconruction And Securitisation Company Limited VI. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole-time Directors and/or Manager: S.No. Particulars of Remuneration Name of MD/WTD/ Manager Total Amount 1 Gross salary Sri. M. Gopalakrishnaiah, WTD (a) Salary as per provisions contained in section 17(1) of e Income-tax Act, (b) Value of perquisites u/s 17(2) Incometax Act, (c) Profits in lieu of salary under section 17(3) Income- tax Act, Stock Option Sweat Equity Commission - as % of profit oers, specify 5 Oers: Conveyance, Medical expenditure, etc Total (A) Ceiling as per e Act 5% of e net profit of e company calculated as per Section 198 of e Companies Act, 2013 B. Remuneration to oer directors: S No. Particulars of Remuneration Fee for attending board committee meetings Commission Oers please specify Total 1 Independent Directors 1. Sri. D. Seearamaiah Dr. Pamidi Kotaiah Sri. Vepa Kamesam Ms. K. Sujaa Rao Total (1) Oer Non-Executive Directors 1. Sri. M. Siva Rama Vara Prasad Dr. Murali Krishna Prasad Divi Sri. Rajeev Puri Total (2) Total (B)=(1+2) Total Managerial Remuneration Overall Ceiling as per e Act NA 30

33 Pridhvi Asset Reconruction And Securitisation Company Limited C. Remuneration to Key Managerial Personnel oer an MD /Manager / WTD: S No. 1 Gross salary Particulars of Remuneration Sri. D. Nanha Ram* CEO Key Managerial Personnel # Sri. Ch. Rama Prasad CEO Smt. V. Vani CS Sri. V.S.Ranga Rao CFO Total (a) Salary as per provisions contained in section 17(1) of e Income-tax Act, (b) Value of perquisites u/s 17(2) Income-tax Act, (c) Profits in lieu of salary under section 17(3) Income-tax Act, Stock Option Sweat Equity Commission as % of profit oers, specify Oers * Sri D. Nanha Ram resigned from e Company on # Sri Ch. Rama Prasad joined e Company as CEO on VII. Penalties / Punishment / Compounding of Offence: Nill Total Type Section of e Companies Act Brief Description Details of Penalty/ Punishment/ Compounding fees imposed Auority (RD/NCLT/ COURT) Appeal made, if any (give details) A. Company Penalty Punishment Compounding B. Directors Penalty Punishment Compounding C. Oer Officers In Default Penalty Punishment Compounding Nil Nil Nil 31

34 Pridhvi Asset Reconruction And Securitisation Company Limited Independent Auditor s Report K.S. Rao & Co CHARTERED ACCOUNTANTS To e Members of PRIDHVI ASSET RECONSTRUCTION AND SECURITISATION COMPANY LIMITED, HYDERABAD Report on e Standalone Financial Statements We have audited e accompanying andalone financial atements of PRIDHVI ASSET RECONSTRUCTION AND SECURITISATION COMPANY LIMITED, which comprise e Balance Sheet as at 31 March, 2017, e Statement of Profit and Loss, e Cash Flow Statement for e year en ended, and a summary of e significant accounting policies and oer explanatory information. Management s Responsibility for e Standalone Financial Statements The Company s Board of Directors is responsible for e matters ated in Section 134(5) of e Companies Act, 2013 ( e Act ) wi respect to e preparation of ese andalone financial atements at give a true and fair view of e financial position of e Company in accordance wi e accounting principles generally accepted in India, including e Accounting Standards specified under Section 133 of e Act, read wi Rule 7 of e Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance wi e provisions of e Act for safeguarding of e assets of e Company and for preventing and detecting frauds and oer irregularities; selection and application of appropriate accounting policies; making judgments and eimates at are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, at were operating effectively for ensuring e accuracy and completeness of e accounting records, relevant to e preparation and presentation of e financial atements at give a true and fair view and are free from material misatement, wheer due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on ese andalone financial atements based on our audit. We have taken into account e provisions of e Act, e accounting and auditing andards and matters which are required to be included in e audit report under e provisions of e Act and e Rules made ere under. We conducted our audit in accordance wi e Standards on Auditing specified under Section 143(10) of e Act. Those Standards require at we comply wi eical requirements and plan and perform e audit to obtain reasonable assurance about wheer e financial atements are free from material misatement. An audit involves performing procedures to obtain audit evidence about e amounts and e disclosures in e financial atements. The procedures selected depend on e auditor s judgment, including e assessment of e risks of material misatement of e financial atements, wheer due to fraud or error. In making ose risk assessments, e auditor considers internal financial control relevant to e Company s preparation of e financial atements at give a true and fair view in order to design audit procedures at are appropriate in e circumances. An audit also includes evaluating e appropriateness of e accounting policies used and e reasonableness of e accounting eimates made by e Company s Directors, as well as evaluating e overall presentation of e financial atements. We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on e andalone financial atements. 32

35 Pridhvi Asset Reconruction And Securitisation Company Limited Opinion In our opinion and to e be of our information and according to e explanations given to us, e aforesaid andalone financial atements give e information required by e Act in e manner so required and give a true and fair view in conformity wi e accounting principles generally accepted in India, (a) In e case of e Balance Sheet, of e ate of affairs of e company as at March 31, 2017; (b) In e case of e Statement of Profit and Loss, of e profit for e year ended on e date. And (c) In e case of e Cash flow atements, of e cash flow for e year ended on at date. Report on Oer Legal and Regulatory Requirements 1. As required by e Companies(Auditor s Report) Order 2016 ( e Order ) issued by e Central Government of India in terms of sub-section(11) of section 143 of e Companies Act 2013, we give in e Annexure A a atement on e matters specified in paragraphs 3 and 4 of e Order. 2. As required by Section 143 (3) of e Act, we report at: (a) We have sought and obtained all e information and explanations which to e be of our Knowledge and belief were necessary for e purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by e company so far as it appears from our examination of ose books; (c) The Balance Sheet, e Statement of Profit and Loss and e Cash Flow Statement dealt wi by is report are in agreement wi e books of account; (d) In our opinion, e aforesaid andalone financial atements comply wi e Accounting Standards specified under Section 133 of e Act, read wi Rule 7 of e Companies (Accounts) Rules, 2014; (e) (f) (g) On e basis of e written representations received from e directors as on 31 March, 2017 taken on record by e Board of Directors, none of e directors is disqualified as on 31 March, 2017 from being appointed as a director in terms of Section 164 (2) of e Act; wi respect to e adequacy of e internal financial controls over financial reporting of e Company and e operating effectiveness of such controls, refer to our separate report in "Annexure B"; and Wi respect to e oer matters to be included in e Auditor s Report in accordance wi Rule 11 of e Companies (Audit and Auditors) Rules, 2014, in our opinion and to e be of our information and according to e explanations given to us: i. The Company does not have any pending litigations which would impact its financial position ii. The Company did not have any long-term contracts including derivative contracts for which ere were any material foreseeable losses. iii. There were no amounts which were required to be transferred to e Inveor Education and Protection Fund by e Company. iv. The company has provided requisite disclosures in e financial atements as to holdings as well as dealings in Specified Bank Notes during e period from 8 November, 2016 to 30 December, Based on audit procedures and relying on e management representation we report at e disclosures are in accordance wi books of accounts maintained by e Company and as produced to us by e Management (Refer to Note No 27 to e audited Financial Statements). For K.S. Rao & Co., Chartered Accountants Firm s Regn. No S Place: Hyderabad Date: (M. Naga Prasadu) Partner Membership No

36 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure -A to Independent Auditor s Report The Annexure referred to in Para 1 under e heading of "Report on Oer Legal and Regulatory Requirements of our report of even date, to e members of PRIDHVI ASSET RECONSTRUCTION AND SECURITISATION COMPANY LIMITED, HYDERABAD, for e year ended March 31, a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b. As explained to us, e management has physically verified e fixed assets during e year and ere is a regular programme of physical verification which, in our opinion, is reasonable having regard to e size of e Company and e nature of e assets. No discrepancies were noticed on such verification. c. According to e information and explanations given to us and on e basis of our examination of e records of e Company, e title deeds of immovable properties are held in e name of e Company. 2. Verification of inventory was not applicable to e company due to nature of its business, and para 3(ii) of e Companies (Auditor s Report) Order 2016 are not applicable to e Company. 3. a. During e year, e Company has not granted any loans, secured or unsecured to Companies, firms, limited liability partnerships or oer parties covered in e regier maintained under Section 189 of e Companies Act, b. In view of our comment in para (a) above, Clause (III) (a), (b) and (c) of paragraph 3 of e Companies (Auditor s Report) Order 2016 are not applicable to e Company. 4. In our opinion and according to e information and explanations given to us, e Company has not advanced any loan to any Director and no invements were made during e year as referred to in sections 185 and 186 of e Act. Therefore, e provisions of Paragraph 3(iv) of e Companies (Auditor s Report) Order 2016 are not applicable to e Company. 5. The Company has not accepted any deposits from e public. Hence e provisions of Sections 73 to 76 or any oer relevant provisions of e Companies Act, 2013, and e rules framed ere under; do not apply to is Company. 6. The Central Government has not prescribed e maintenance of co records under sub-section (1) of 148 section of e Companies Act, 2013 for e activities of e Company. 7. a. According to e records, e company is regular in depositing undisputed atutory dues including, provident fund and ESI, income-tax, sales-tax, service tax, duty of cuoms, duty of excise, value added tax, cess and all oer material atutory dues wi e appropriate auorities and ere were no arrears of atutory dues as at March 31, 2017 for a period of more an six mons from e date ey became payable. b. According to e records of e Company and e information and explanations given to us, ere were no dues of income tax or sales tax or service tax or duty of cuoms or duty of excise or value added tax have not been deposited on account of any dispute. 34

37 Pridhvi Asset Reconruction And Securitisation Company Limited 8. The Company has availed Over draft facility from a nationalized bank and not defaulted in repayment; 9. The Company did not raise any money by way of initial public offer or furer public offer (including debt inruments) and term loans during e year. Accordingly, paragraph 3 (ix) of e Companies (Auditor s Report) Order 2016 is not applicable. 10. According to e information and explanations given to us, no material fraud by e Company or on e Company by its officers or employees has been noticed or reported during e course of our audit. 11. Managerial remuneration has been paid in compliance wi provisions of Sec 197 read wi Schedule V to e Companies Act, The Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of e Order is not applicable. 13. According to e information and explanations given to us and based on our examination of e records of e Company, transactions wi e related parties are in compliance wi sections 177 and 188 of e Act where applicable and details of such transactions have been disclosed in e financial atements as required by e applicable accounting andards. 14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during e year. 15. The Company has not entered into non-cash transactions wi directors or persons connected wi em. 16. The Company is not required to be regiered under section 45-IA of e Reserve Bank of India Act,1934. For K.S. Rao & Co., Chartered Accountants Firm s Regn. No S Place: Hyderabad Date: (M. Naga Prasadu) Partner Membership No

38 Pridhvi Asset Reconruction And Securitisation Company Limited Annexure - B to e Auditor`s Report Report on e Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of e Companies Act, 2013 ( e Act ) 1. We have audited e internal financial controls over financial reporting of PRIDHVI ASSET RECONSTRUCTION AND SECURITISATION COMPANY LIMITED ( e Company ) as of March 31, 2017 in conjunction wi our audit of e financial atements of e Company for e year ended on at date. Management s Responsibility for Internal Financial Controls 2. The Company s management is responsible for eablishing and maintaining internal financial controls based on e internal control over financial reporting criteria eablished by e Company considering e essential components of internal control ated in e Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by e Initute of Chartered Accountants of India. These responsibilities include e design, implementation and maintenance of adequate internal financial controls at were operating effectively for ensuring e orderly and efficient conduct of its business, including adherence to company s policies, e safeguarding of its assets, e prevention and detection of frauds and errors, e accuracy and completeness of e accounting records, and e timely preparation of reliable financial information, as required under e Companies Act, Auditor s Responsibility 3. Our responsibility is to express an opinion on e Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance wi e Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (e Guidance Note ) and e Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of e Companies Act, 2013, to e extent applicable to an audit of internal financial controls, bo applicable to an audit of Internal Financial Controls and, bo issued by e Initute of Chartered Accountants of India. Those Standards and e Guidance Note require at we comply wi eical requirements and plan and perform e audit to obtain reasonable assurance about wheer adequate internal financial controls over financial reporting was eablished and maintained and if such controls operated effectively in all material respects. 4. Our audit involves performing procedures to obtain audit evidence about e adequacy of e internal financial controls syem over financial reporting and eir operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an underanding of internal financial controls over financial reporting, assessing e risk at a material weakness exis, and teing and evaluating e design and operating effectiveness of internal control based on e assessed risk. The procedures selected depend on e auditor s judgment, including e assessment of e risks of material misatement of e financial atements, wheer due to fraud or error. 5. We believe at e audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on e Company s internal financial controls syem over financial reporting. Meaning of Internal Financial Controls over Financial Reporting 6. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding e reliability of financial reporting and e preparation of financial atements for 36

39 Pridhvi Asset Reconruction And Securitisation Company Limited external purposes in accordance wi generally accepted accounting principles. A company's internal financial control over financial reporting includes ose policies and procedures at: a. pertain to e maintenance of records at, in reasonable detail, accurately and fairly reflect e transactions and dispositions of e assets of e company; b. provide reasonable assurance at transactions are recorded as necessary to permit preparation of financial atements in accordance wi generally accepted accounting principles, and at receipts and expenditures of e company are being made only in accordance wi auorizations of management and directors of e company; and c. provide reasonable assurance regarding prevention or timely detection of unauorized acquisition, use, or disposition of e company's assets at could have a material effect on e financial atements. Inherent Limitations of Internal Financial Controls over Financial Reporting 7. Because of e inherent limitations of internal financial controls over financial reporting, including e possibility of collusion or improper management override of controls, material misatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of e internal financial controls over financial reporting to future periods are subject to e risk at e internal financial control over financial reporting may become inadequate because of changes in conditions, or at e degree of compliance wi e policies or procedures may deteriorate. Opinion 8. In our opinion, e Company has, in all material respects, an adequate internal financial controls syem over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017 based on e internal control over financial reporting criteria eablished by e Company considering e essential components of internal control ated in e Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by e Initute of Chartered Accountants of India. For K.S. Rao & Co., Chartered Accountants Firm s Regn. No S Place: Hyderabad Date: (M. Naga Prasadu) Partner Membership No

40 Pridhvi Asset Reconruction And Securitisation Company Limited Balance Sheet as at 31 March, 2017 Particulars Note The accompanying notes are an integral part of e financial atements As at As at Equity and Liabilities i) Share holders funds Share Capital Reserves and Surplus ii) Non-current Liabilities Long-term borrowings Deferred tax liability Oer long-term liabilities iii) Current Liabilities Short-term borrowings Trade Payables Oer current liabilities Short-term provisions Total Assets 1) Non-current Assets i) Fixed Assets Tangible assets Intangible assets ii) Non-current invements Long-term loans and advances Oer non-current assets Oer invements ) Current Assets Current invements Trade receivables Cash and bank balances Short-term loans and advances Oer current assets Total Summary of significant accounting policies 01 As per our report of even date For and on behalf of e Board For K.S.Rao & Co. Chartered Accountants M. Naga Prasadu Partner M.S.R.V. Prasad Director M. Gopalakrishnaiah Whole-time Director Place : Hyderabad Date : Ch. Rama Prasad Chief Executive Officer V.S. Ranga Rao Chief Financial Officer V. Vani Company Secretary 38

41 Pridhvi Asset Reconruction And Securitisation Company Limited Statement of Profit and Loss for e year ended 31 March, 2017 Particulars Income Revenue from operations Oer income Total revenue(i) Note Year Ended Year Ended Expenses Employee benefits expense Oer expenses Total (II) Earnings before intere, tax, depreciation and amortization (EBITDA) (I)-(II) Finance cos Depreciation Profit before tax and exceptional items Tax expenses Current tax Prior period tax Dividend Diribution tax ( ) Deferred tax Total tax expenses Profit for e year from continuing operations (3.44) (5.43) Earnings per equity share (Face Value R100/- each) Basic & Diluted As per our report of even date For and on behalf of e Board For K.S.Rao & Co., Chartered Accountants M. Naga Prasadu Partner M.S.R.V. Prasad Director M. Gopalakrishnaiah Whole-time Director Place : Hyderabad Date : Ch. Rama Prasad Chief Executive Officer V.S. Ranga Rao Chief Financial Officer V. Vani Company Secretary 39

42 Pridhvi Asset Reconruction And Securitisation Company Limited S.No Cash flow atement for e year ended 31 March, 2017 Particulars Year Ended Year Ended A. Cash flow from operating activities Net Profit before Tax and after extraordinary items Adjuments for: Depreciation Loss on sale of assets Amounts written off (Reversal from trus) Provision for bad debts re-credited Intere (1.30) (8.76) Operating profit before working capital changes Adjuments for: Financial assets Trade and oer receivables (478.59) Trade and oer payables Cash generated from operations Income tax paid (463.55) (977.78) Net Cash from operating activities B. Cash flow from inveing activity Purchase of fixed assets (6.93) (2.58) Sale of fixed assets Intere received Security receipts (on redemption by trus) Security receipts-invements ( ) ( ) Oer Invements (213.58) ( ) Fixed Deposits in Banks Net cash from inveing activity ( ) ( ) C. Cash flow from financing activities Secured loan from bank Dividend and Corporate Dividend diribution tax paid (207.31) ( ) Net cash generated in financing activity ( ) Net increase in cash and cash equivalents (A+B+C) (88.04) (252.61) Cash and cash equivalents as at Cash and cash equivalents as at As per our report of even date For and on behalf of e Board For K.S.Rao & Co., Chartered Accountants M. Naga Prasadu Partner M.S.R.V. Prasad Director M. Gopalakrishnaiah Whole-time Director Place : Hyderabad Date : Ch. Rama Prasad Chief Executive Officer V.S. Ranga Rao Chief Financial Officer V. Vani Company Secretary 40

43 Pridhvi Asset Reconruction And Securitisation Company Limited Notes on Financial Statements for e year ended 31 March, Summary of significant accounting policies 1) Basis of Preparation: The accounting and reporting policies of e company are framed to comply wi e Generally Accepted Accounting Principles (GAAP) in India, e guidelines and accounting andards issued by e Reserve Bank of India from time to time and e provisions of e Companies Act, Financial atements are prepared under hiorical co convention and all income and expenditure are accounted on accrual basis, except oerwise ated. 2) Principal Accounting Policies: Revenue Recognition: i) Intere on bank deposits is recognized on accrual basis. ii) Intere income in respect of reructured /rescheduled financial assets which are held in e books of e company is recognized on accrual basis as long as e asset remains performing. iii) Financial Assets acquired and held in trus: a) Yield is recognised after redemption of e entire principal amount of Security Receipts. b) Upside income is recognised only after full redemption of Security Receipts. iv) Management fee in respect of accounts acquired and held in trus is recognized initially at e time of acquisition. For subsequent periods management fee is recognized only when e fee recognized earlier is realized. Any such management fee recognised during e planning period is reversed if e same is not recovered wiin 180 days from e date of expiry of e planning period. Likewise, management fee recognised after e planning period is reversed if e same is not realised wiin 180 days from e date of recognition. Furer, any unrealized management fee is reversed if before e prescribed time for realisation, NAV of e SRs fall below 50% of e face value. v) Sale proceeds / Settlement amounts in respect of assets resolved rough sale of underlying securities / One Time Settlement are appropriated fir towards expenses outanding, management fee, acquisition co outanding and e balance amount is recognised as gain. vi) Intere on expenses incurred on behalf of tru(s) is accounted for as per e terms of tru deed. 3) Asset classification and provisioning ereon: The company shall classify e financial assets acquired and held in e books of e company and make necessary provisions again non-performing assets, as per e guidelines issued by e Reserve Bank of India from time to time. 4) Rating of Security Receipts: Security Receipts issued by e Trus are rated by accredited Rating Agencies periodically as per guidelines of e Reserve Bank of India. 41

44 Pridhvi Asset Reconruction And Securitisation Company Limited 5) Invements / Valuation of Security Receipts: Invements in Security Receipts are aggregated for e purpose of arriving at net depreciation / appreciation of invements under e category. Net depreciation if any, is provided for and net appreciation is ignored. Invements in SRs held by e company are treated as Available for Sale Category. 6) Fixed Assets: Fixed Assets are ated at co less accumulated depreciation. Co includes co of purchase and all expenditure such as inallation cos and professional fee incurred on e assets before it is put to use. Depreciation is charged on raightline meod in accordance wi Schedule II of e Companies Act, ) Employee benefits: The Company makes annual contribution to Gratuity Fund and Leave Encashment Fund adminiered by truees of and managed by LIC based on actuarial valuation done every year. 8) Pre-Acquisition Expenditure on Financial Assets: Expenses incurred at pre-acquisition age for performing due diligence etc., for acquiring financial assets from banks / FIs are expensed immediately by recognising e same in e atement of Profit and Loss for e period in which such cos are incurred. 9) Expenditure incurred after acquisition of Assets: Expenses incurred after acquisition of assets on e formation of trus like amp duty, regiration, etc., which are recoverable from e trus are charged to e respective tru accounts and e same are reversed if not realised wiin 180 days from e planning period or down grading of Security Receipts (i.e., Net Asset Value is less an 50% of e face value of SRs) whichever is earlier. 10) Earnings per share: The basic EPS is computed by dividing e net profit attributable to e equity shareholders by weighted average number of shares outanding during e reporting year. 11) Operating cycle concept under schedule VI: Liabilities due wiin one year are classified as current liabilities and assets maturing wiin one year along wi cash and bank balances as current assets. Invements in Security Receipts and Long Term Deposits wi banks are treated as fixed assets. 42

45 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, Share capital As at As at Auorized shares 15,000,000 equity shares of R100/- each Issued, subscribed and fully paid-up shares 10,000,000 equity shares of R100/- each a. Reconciliation of e shares outanding at e beginning and at e end of e reporting period Equity Shares As at Number Amount As at Number Amount At e beginning of e period 10,000, ,000, Issued during e period Outanding at e end of e period 10,000, ,000, b. Rights attached to equity shares The company has only one class of equity shares having a par value of R 100/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend recommended by e Board of Directors is subject to approval of shareholders in ensuing Annual General Meeting. c. Details of shareholders holding more an 5% shares in e company Equity Shares As at Number % holding As at Number % holding Dr.Murali Krishna Prasad Divi 1,570, ,570, Smt.M.Rajya Lakshmi 1,519, ,519, Sri.M.Siva Rama Vara Prasad 1,189, ,189, Punjab National Bank 1,000, ,000, d. Shares reserved for issue under options The company has not reserved any shares for issue under Employees Stock Option (ESOP), loan agreements or contracts for supply of capital goods, etc. 43

46 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, Reserves and Surplus As at As at A. General Reserve Balance as per e la financial atement Add: Amount transferred from surplus in e atement of profit and loss Total (A) B. Surplus in e atement of profit and loss Balance as per la financial atements Profit for e year Less: Appropriations Interim dividend paid for on equity shares at R 10 per share - ( ) Tax on Interim dividend - (203.58) Transfer to general reserve (200.00) (300.00) Total appropriations (200.00) ( ) Closing Balance (B) Total reserves and surplus (A+B) Long-term borrowings (Secured) Non-current portion As at Current portion As at As at As at HDFC Bank Total Loan of R 3,00,00,000/- availed from HDFC Bank in April 2013 is secured by mortgage of company s office building. Rate of intere is 12.20% p.a. and is repayable in 84 EMIs of R 529,582/- each from June, Oer long-term liabilities & provisions Non-current portion Current portion As at As at As at As at Oer long-term liabilities & provisions

47 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, Short-term borrowings (Secured) As at As at Overdraft from Andhra Bank Total Overdraft is secured by way of pledge of Security Receipts to e extent of 150% of e overdraft amount and hypoecation of present and future Financial Assets. Rate of intere is MCLR % p.a. Overdraft limit is R Crores and renewable every year. 7. Trade payables As at As at Trade payables (for services received) - - There are no dues to Micro, Small and Medium Enterprises as defined under e MSMED Act, Oer current liabilities As at As at Current Maturities of Long Term Debt- Term Loans from Banks Amounts received again sale of Assets / OTS Advance received towards expenses Amount payable to trus * Amounts retained for expenses Oer Payables: i) Leave encashment payable ii) Statutory Remittances a) Tax Deducted at Source b) Profession Tax c) Service Tax iii) Outanding expenses Total *Note: R15 lakhs received and deposited in Bank as per Court direction in respect of PARAS-SBIKG-033 Tru. 9. Short term provisions As at As at Provision for income tax Gratuity and leave encashment premium payable to LIC Tax on interim dividend Total

48 Pridhvi Asset Reconruction And Securitisation Company Limited 10. Fixed Assets A. Tangible Assets Description Notes to Financial Statements for e year ended 31 March, 2017 As at Additions Gross Block Deletions As at Up to Buildings Furniture and Fixtures Data Processing Equipment Office Equipment Vehicles Library TOTAL Previous year For e Year Depreciation Deletions Up to Net Block As at As at B. Intangible Assets Description As at Additions Gross Block Deletions As at Up to Computer software Total Previous Year For e Year Depreciation Deletions Up to Net Block As at As at

49 Pridhvi Asset Reconruction And Securitisation Company Limited 11. Invements Notes to Financial Statements for e year ended 31 March, 2017 Non-current Current As at As at As at As at Invement in special purpose vehicles (valued at co unless ated oerwise) Unquoted security receipts 1) PARAS-DLBPF-005 Tru 42 (31 March 2016: 52) SRs of R 1,00,000/- each ) PARAS-SPCPL-008 Tru 65 (31 March 2016: 65) SRs of R 1,00,000/- each ) PARAS-VBL-010 Tru 415 (31 March 2016: 415) SRs of R 1,00,000/- each ) PARAS-VEAF-011 Tru 93 (31 March 2016: 93) SRs of R 1,00,000/- each ) PARAS-MRDI-016 Tru (31 March 2016: 51083) SRs of R 1,000/- each ) PARAS-MMAL-017 Tru 348 (31 March 2016: 348) SRs of R 1,00,000/- each ) PARAS-DRLL-019 Tru 600 (31 March 2016: 600) SRs of R 1,00,000/- each ) PARAS-MCSPL-020 Tru 430 (31 March 2016: 430) SRs of R 1,00,000/- each ) PARAS-KIL-022 Tru (31 March 2016: 49082) SRs of R 1,000/- each ) PARAS-ALIND II-023 Tru 9 (31 March 2016: 25) SRs of R 1,00,000/- each ) PARAS-ALIND III -024 Tru 6 (31 March 2016: 18) SRs of R 1,00,000/- each ) PARAS-IOBPF-027 Tru 46 (31 March 2016: 46) SRs of R 1,00,000/- each ) PARAS-VJBPF-028 Tru 4966 (31 March 2016: 8891) SRs of R 1,000/- each ) PARAS-RTP-032 Tru 3575 (31 March 2016: 3575) SRs of R 1,000/- each ) PARAS-SBIKG-033 Tru 2457 (31 March 2016: 2457) SRs of R 10,000/- each ) PARAS-RRSPG-034 Tru 1512 (31 March 2016: 1512) SRs of R 10,000/- each ) PARAS-SBH Tru (31 March 2016: 51360) SRs of R 1,000/- each ) PARAS-SBH Tru 1741 (31 March 2016: 1936) SRs of R 10,000/- each ) PARAS-RRSPG II-037 Tru 798 (31 March 2016: 798) SRs of R 10,000/- each ) PARAS-SPML-038 Tru 3924 (31 March 2016: 3924) SRs of R 10,000/- each ) PARAS-MACL-039 Tru (31 March 2016: 30105) SRs of R 1,000/- each ) PARAS-SPEPL-040 Tru 3105 (31 March 2016: 3105) SRs of R 1,000/- each ) PARAS-TPDL-041 Tru 76 (31 March 2016: 76) SRs of R 1,00,000/- each ) PARAS-KSL-042 Tru 4275 (31 March 2016: 4275) SRs of R 1,000/- each Total C/F

50 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, 2017 Non-current Current As at As at As at As at B/F ) PARAS-DRD-043Tru (31 March 2016: 14685) SRs of R 1,000/- each ) PARAS-ATE-044 Tru 3075 (31 March 2016: 3075) SRs of R 10,000/- each ) PARAS-GKI-045 Tru 222 (31 March 2016: 266) SRs of R 1,00,000/- each ) PARAS-MSL-046 Tru 375 (31 March 2016: 375) SRs of R 1,00,000/- each ) PARAS-ATL-047 Tru 3105 (31 March 2016: 3105) SRs of R 1,000 /- each ) PARAS-SPPL-049 Tru 4407 (31 March 2016: 4617) SRs of R 10,000/- each ) PARAS-HLPL-050 Tru 108 (31 March 2016: 234) SRs of R 10,000/- each ) PARAS-KGF-051 TRUST 2775 (31 March 2016: 2775) SRs of R 10,000/- each ) PARAS-CMI-052 Tru (31 March 2016: 18045) SRs of R 1,000/- each ) PARAS-SPPLOBC-053 Tru (31 March 2016: ) SRs of R 1,000/- each ) PARAS-VMC-054 Tru 231 (31 March 2016: 231) SRs of R 1,00,000/- each ) PARAS-DB Tru (31 March 2016: 15960) SRs of R 1,000/- each ) PARAS-DP-058 Tru 0 (31 March 2016: 23) SRs of R 1,00,000/- each ) PARAS-SOUB-055 Tru 252 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-RVS-059 Tru 229 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-MLA-060 Tru (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-JSL-061 Tru (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-DIL-062 Tru 285 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-RSP-063 Tru 6020 (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-JCIPL-064 Tru 105 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-AWL-065 Tru 480 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-UB Tru 1965 (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-VBI-067 Tru 4050 (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-SEPL-068 Tru (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-PPPL-069 Tru 129 (31 March 2016: Nil) SRs of R 1,00,000/- each ) PARAS-SL-070 Tru 1350 (31 March 2016: Nil) SRs of R 1,000/- each ) PARAS-MAIPL-071 Tru (31 March 2016: Nil) SRs of R 1,000/- each Total Less: Provision for SRs Net SRs

51 Pridhvi Asset Reconruction And Securitisation Company Limited (A) Financial Assets (Secured considered good) 12. Loans and Advances Description Notes to Financial Statements for e year ended 31 March, 2017 Non-Current Portion Current Portion Total As at As at As at As at As at As at Loan Assets (A) (B) Security Deposits Unsecured considered good (B) (C) Oer Loans and Advances Advance Income Tax TDS Advance paid for ERP Package Prepaid expenses Service Tax (input) CENVAT credit I.T. Refund Receivable ( ) Advance For Expenses (C) Total (A+B+C) Oer Assets Non-Current Portion Current Portion As at As at As at As at A. Unsecured and considered good Expenses recoverable from trus managed by e company Over six mons Oers (A) B. Oers items Amount received from Vensa Bio Tek Over six mons Intere accrued on fixed deposits (B) Total (A +B)

52 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, Oer Invements As at As at Invement in properties * *Company acquired 2 properties under e provisions of SARFAESI Act, Trade Receivables (Unsecured, considered good) As at As at A. Recoverable from Trus managed by e company Over six mons Oers (A) B. Oer Receivables Over six mons - - Oers - - (B) - - Total (A)+(B) Cash and Bank Balances As at As at Cash and cash equivalents Balances wi Banks In current accounts In fixed deposits * Cash on hand Total Note: R 15 Lakhs received and deposited in Bank as per court direction in respect of PARAS - SBIKG Tru. 50

53 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to Financial Statements for e year ended 31 March, Revenue from operations Intere earned Gain on Redemption of Security Receipts Gain from resolution of Financial Assets Incentive (A) Oer Financial Services Management Fee Advisory & Consultancy Fee (B) Total (A+B) Oer non-operating income Intere on FDs wi Banks Oers Total Employee benefits expense ( R in Lakhs) Salaries and wages Rent-Officer s Quarters Contribution to gratuity and leave encashment fund Staff Welfare Total

54 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, Oer expenses ( R in Lakhs) Cuomer service expenditure Electricity, water and house keeping Rates and taxes, excluding taxes on income Repairs and maintenance Plant and Machinery Oers Vehicle maintenance Office maintenance charges Office maintenance Staff Recruitment expenses Insurance Travelling and conveyance Communication cos Legal and professional charges Directors sitting fees Printing and ationery Enforcement of security intere expenses Security expenses Contributions under CSR Scheme Reversal of amounts in recoverable from tru accounts Amount reversed in loan account-vrpf Provision made for SRs Loss on sale of assets Miscellaneous expenses Payment to Auditors Audit fee Certification fee Total Finance cos ( R in Lakhs) Intere expense Term Loan Overdraft Bank charges Total

55 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, The Security Receipts issued by e Trus which are managed by e Company as managing truee are being rated by CARE and M/s. Brickwork Ratings India Pvt. Ltd., in accordance wi e guidelines issued by e Reserve Bank of India for credit rating of SR s of Trus. 23. Employee benefits as per AS -15: As per actuarial valuation as on given by LIC of India and recognized in e financial atements in respect of employee gratuity and leave encashment benefit schemes. i. Change in present value of obligation as on Gratuity Leave encashment Present value of obligations at beginning of year Intere co Current service co Benefits paid (22.17) (32.11) Actuarial (gain)/loss on obligation Present value of obligation as at end of year ii. Changes in e fair value of plan assets as on Gratuity Leave encashment Fair value of assets at beginning of year Expected return on plan assets Contributions made during e year Benefits paid (22.17) (32.11) Actuarial (gain)/loss on plan assets Nil Nil Fair value of plan assets at end of year iii. Fair value of plan assets Gratuity Leave encashment Fair value of plan assets at beginning of year Actual return on plan assets Contributions Benefits paid (22.17) (32.11) Fair value of plan assets at end of year Funded atus (1.27) 8.75 Excess of actual over eimated return of plan assets (Actual rate of return = Eimated rate of return as ARD falls Nil Nil on 31 March) 53

56 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, 2017 iv. Actuarial Gain/Loss recognized as on Gratuity Leave encashment Actuarial (gain)/loss on obligation (23.17) (13.51) Actuarial (gain)/loss for e year plan assets Nil Nil Actuarial (gain)/loss for e year (23.17) Actuarial (gain)/loss recognized in e year (23.17) v. The amounts to be recognized in e balance sheet and atement of profit and loss Gratuity Leave encashment Present value of obligation as at end of year Fair value of plan assets as at end of year Funded atus (1.27) 8.75 Net asset/(liability) recognized in balance sheet (1.27) (8.75) Net Asset in respect of gratuity plan and leave encashment plan is not recognised vi. Expenses recognized in atement of Profit and Loss Gratuity Leave encashment Current service co Intere co Expected return on plan assets (0.77) (2.20) Net actuarial (gain)/loss recognized in e year (13.51) Expenses recognized in atement of Profit and Loss The company has only one line of business and as such has no separate reportable segment to be disclosed under AS -17 Segment Reporting. 25. Related Party disclosures Name of e Party Sri. M. Siva Rama Vara Prasad Dr. Murali Krishna Prasad Divi Sri. Rajeev Puri Sri. M. Gopalakrishnaiah Nature of Relationship Promoter Non-Executive Director Promoter Non-Executive Director Punjab National Bank - Nominee Director Whole-time Director 54

57 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, 2017 Transactions wi related parties (i) Remuneration to Executive Directors: Particulars Whole-time Director Salary Medical expenses reimbursed Conveyance charges reimbursed Telephone expenses reimbursed Total: (ii) Sitting fees to Non-Executive Directors: Particulars Sri. M. Siva Rama Vara Prasad Dr. Murali Krishna Prasad Divi Sri. Rajeev Kumar Raizada Sri. Rajeev Puri Sri. D. Seearamaiah Dr. Pamidi Kotaiah Sri. Vepa Kamesam Ms. K. Sujaa Rao Total: (iii) Transactions wi related parties: (a) M/s. Mezzequity Software Services Ltd., Nature of e transaction: House keeping and security services Particulars Amount outanding at e beginning of e year Amount paid during e year Amount outanding at e end of e year (b) M/s.Bitchemy Ventures Pvt Ltd., Nature of e transaction: Software Development Particulars Amount outanding at e beginning of e year - - Amount paid during e year Amount outanding at e end of e year

58 Pridhvi Asset Reconruction And Securitisation Company Limited 26. EPS Calculation: The basic and diluted EPS calculation based on effective capital is as under: Particulars Profit after tax Weighted average number of shares 10,000,000 10,000,000 Basic EPS (Face value Rs. 100/- per share) (In R) Diluted EPS (In R) Taxes on Income (AS 22) Items of Deferred Tax Liability Depreciation Provision on gratuity and leave encashment & SRs (45.13) - Items of deferred tax assets Nil Nil Deferred Tax Liability at current rate of tax Details of Specified Bank Notes (SBN) held and transacted during e period to Particulars SBNs 500 1,000 Total (R) Oer Denomination Notes (R) Total (R) Balance cash in hand as on ,000 7,789 48,789 Add: Widrawals from Bank 270, ,789 Permitted Receipts 15, ,125 Non- Permitted Receipts ,125 Less: Permitted Payments 219, ,037 Amount deposited in Banks ,000-74,037 Closing Cash in hand as on , Previous year s figures are regrouped wherever necessary. 56

59 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, Additional Disclosures: The following are e additional disclosures as required by The Securitisation Companies and Reconruction Companies (Reserve Bank) Guidelines and Directions, a) The Names and addresses of banks/financial initutions from whom financial assets were acquired and e value at which such assets was acquired from each such bank/financial initutions. Sponsors: Seller wise acquisition details as at 31 March,2017 Sellers Address Acquisition Price Punjab National Bank 7, Bhikhaijicama Place, New Delhi Non-Sponsors: Seller wise acquisition details as at 31 March,2017 ( R in Lakhs) Sellers Address Acquisition Price Andhra Pradesh State Co-operative Bank Limited Troop Bazar,Hyderabad Andhra Bank Dr.Pattabhi Bhavan, , Saifabad, Hyderabad Axis Bank Limited Bank of Baroda Bank of India Corporate Office, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai Baroda Corporate Centre, Plot No.26, G-26, Bandra Kurla Complex, Bandra (Ea), Mumbai Star House, C-5, G Block, Bandra Kurla Complex, Bandra (Ea), Mumbai Bank of Maharashtra Lokmangal 1501, Shivajinagar, Pune Canara Bank 112, JC Road, Bangalore Central Bank of India Corporation Bank Dena Bank Deutsche Bank Corporate Office, Chander Mukhi, Nariman Point, Mumbai Mangaladevi Temple Road, Pandeshwar, Mangalore Dena Bank Corporate Centre, C-10, G Block, Bandra Kurla Complex, Mumbai DB House, Hazarimal Somani Marg, Fort, Mumbai The Dhanalakshmi Bank Limited Corporate Office, Naickanal, Thrissur The Federal Bank Limited PB No.103, Federal Towers, Aluva , Eanakulam, Kerala

60 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, 2017 Non-Sponsors: ICICI Bank Limited IDBI Bank Limited Sellers Address Acquisition Price ICICI Towers, Bandra Kurala Complex, Bandra (E), Mumbai IDBI Towers, WTC Complex, Cuffe Parade, Mumbai IFCI Limited IFCI Tower, 61 Nehru Place, New Delhi Indian Bank PB No.1384, 66, Rajaji Salai, Chennai Indian Overseas Bank Central Office, PB.No.3765, 763, Anna Salai, Chennai ING Vysya Bank 22, M. G. Road, Bangalore Indian Renewable Energy Corporate Office, 3rd Floor, Augu Kranti Bhawan, Development Agency Limited Bhikaiji Cama Place, New Delhi Karur Vysya Bank Erode Road, Karur Kotak Mahindra Bank 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai The Lakshmi Vilas Bank Limited Adminirative Office, Salem Main Road, Karur Oriental Bank of Commerce Stressed Assets Stabilization Fund State Bank of Hyderabad Corporate Office, Plot No.5, Initutional Area, Sector-32, Gurgaon IDBI Towers, WTC Complex, Cuffe Parade, Colaba, Mumbai Hyderabad Bank Towers, Gun Foundry, Hyderabad State Bank of India Madame Cama Road, Mumbai State Bank of Travancore Head Office, Poojappura, Trivandrum , Kerala State Bank of Mysore 646, K.G.Road,Bangalore Shikshak Sahakari Bank Limited Regiered Office, Opposite Gandhi Sagar Lake, Mahal, Nagapur Standard Chartered Bank 90, Mahatma Gandhi Road, Fort, Mumbai UCO Bank Seller wise acquisition details as at 31 March, , Biplabi Trailokya Maharaj Sarani, (Formerly Brabourne Road) Kolkata Vijaya Bank 41/2, M.G.Road,Trinty Circle, Bangalore Total

61 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, 2017 b) Dispersion of various financial assets indury-wise as at 31 March, 2017: Indury No. of Borrowers Acquisition Price % of Total Automobiles Asbeos Roofing Bio-Chemical & Peicides Cement Coir Cold Storage Consumer Durable Loans Educational Initution Food Products House Hold Appliances Hospital Iron and Steel, Oer Metals Information Technology Indurial Gases Infraructure Logiics Metals and Mining Media NBFC Pharma Plaics Power Paper Poultry Textiles Trading Wood Oers Total

62 Pridhvi Asset Reconruction And Securitisation Company Limited Notes to financial atements for e year ended 31 March, 2017 c) Details of related parties as per Accounting Standard and guidance notes issued by e Initute of Chartered Accountants of India and e amounts due to and from em - Nil d) A atement clearly charting erein e migration of financial assets from andard to non-performing e) Value of financial assets acquired during e financial year eier on e books of e Company or in e books of e Trus f) Value of financial assets fully realized during e financial year Nil g) Value of financial assets including assets acquired rough Tru and outanding for realization as at e end of e financial year h) i. Value of Security Receipts redeemed partially during e financial year ii. Value of Security Receipts redeemed fully during e financial year Nil i) Value of Security Receipts pending for redemption as at e end of e financial year j) Value of Security Receipts which could not be redeemed as a result of non-realization of e financial asset as per e policy formulated by e Securitization company or Reconruction company under Paragraph 7(6) (ii) or 7(6)(iii) k) Value of land and/or building acquired in ordinary course of business of FY 2016 reconruction of assets (year wise) l) Details of assets where e value of acquisition is more an e book value (e value of assets as declared by e seller bank in e auction) m) Details of Assets disposed off (eier by write off or by realisation) during e year at discount of more an 20% of valuation as on e previous year and reasons erefor n) Details of Assets where e value of e SR has declined more an 20% of e acquisition value Nil Nil Nil Nil As per our report of even date For and on behalf of e Board For K.S.Rao & Co., Chartered Accountants M. Naga Prasadu Partner M.S.R.V. Prasad Director M. Gopalakrishnaiah Whole-time Director Place : Hyderabad Date : Ch. Rama Prasad Chief Executive Officer V.S. Ranga Rao Chief Financial Officer V. Vani Company Secretary 60

63 Pridhvi Asset Reconruction And Securitisation Company Limited In pursuit of revival of impaired assets A section of Aluminum profiles manufacturing unit at Veleru Village, Krishna Dirict, Andhra Pradesh belonging to M/s Maers Aluminum India Private Limited. The Unit is running at rated capacity after revival rough reructuring. A Picture of e Geekay World School at Ranipet, Vellore Dirict, Tamilnadu run by M/s Geekay Infraructure - Debt acquired and reructured by PARAS