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Gayatri Highways Ltd.

BSE: 541546 Sector: Infrastructure
NSE: GAYAHWS ISIN Code: INE287Z01012
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VOLUME 24962
52-Week high 0.90
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Mkt Cap.(Rs cr) 18
Buy Price 0.70
Buy Qty 40208.00
Sell Price 0.75
Sell Qty 43281.00
OPEN 0.75
CLOSE 0.73
VOLUME 24962
52-Week high 0.90
52-Week low 0.20
P/E
Mkt Cap.(Rs cr) 18
Buy Price 0.70
Buy Qty 40208.00
Sell Price 0.75
Sell Qty 43281.00

Gayatri Highways Ltd. (GAYAHWS) - Director Report

Company director report

To

The Members

Your Directors have immense pleasure in presenting the 13th Annual Reportand the Audited Financial Statements for the Financial Year ended 31st March 2019.

FINANCIAL SUMMARY:

A) STANDALONE

The standalone financial results of your company for the year ended 31st March 2019 areas follows:

Particulars For the year ended 31.03.2019 (Rs.) For the year ended 31.03.2018 (Rs.)
1) INCOME
Revenue from operations 150423716 76927595
Other income 105750563 112611970
TOTAL 256174279 189539565
2) EXPENDITURE
Operations & Maintenance Expenses 108950777 16892429
Employee Benefits Expense - 2040577
Finance Costs 344267073 502817758
Depreciation & Amortization expense 104036 -
Other Expenses 4151530 21067145
TOTAL 457473416 542817909
3) Loss before tax from continuing operations (201299137) (353278344)
Current Tax - -
4) Loss for the year (201299137) (353278344)
Earnings (Loss) per Share – Basic & Diluted (0.84) (1.47)

B) CONSOLIDATED

The consolidated financial results of your company for the year ended 31st March 2019are as follows:

Particulars For the year ended 31.03.2019 (Rs.) For the year ended 31.03.2018 (Rs.)
1) INCOME
Revenue from operations 1298254168 861096475
Other income 90177242 99347586
Construction income - 1930029848
TOTAL 1388431410 2890473909
2) EXPENDITURE
Construction Expenses - 1929915369
Operations & Maintenance Expenses 161760462 56864909
Employee Benefits Expense 26194965 23351166
Finance Costs 3435558302 2467002653
Depreciation & Amortization expense 181644201 123475055
Other Expenses 182326936 135548292
TOTAL 3987484866 4736157444
3) Loss before tax from continuing operations (2599053456) (1845683535)
- Current Tax - -
4) Loss for the year (2599053456) (1845683535)
Other comprehensive income-
Re-measurement of the defined benefit plans (140216) 710821
Share of profits/ (losses) in the Jointly controlled entities (275011310) 188427095
5) Total comprehensive loss for the year (2874204982) (1656545619)
Earnings (Loss) per Share – Basic & Diluted (11.99) (6.91)

STATE OF COMPANY'S AFFAIR :

During the year the Company achieved revenue of Rs. 25.62 Crs and net loss of Rs.20.13 Crs on a Standalone basis and the Consolidated revenue was Rs. 138.84 Crs and netloss after non controlling interests was Rs. 287.42 Crs. Further the Company is exploringnew opportunities.

THE YEAR IN RETROSPECT

During the year under review the Equity Shares of the Company are listed on BSELimited and National Stock Exchange of India Limited with effect from 28th June 2018 andare open for trading.

FUTURE OUTLOOK

The Government of India is taking every possible initiative to boost the infrastructuresector. The sector is highly responsible for propelling India's overall development andenjoys intense focus from the Government. The present Projects and the opportunities inthe Indian infrastructure sector provides good visibility towards a sustainable andprofitable growth going forward.

Infrastructure sector is a key driver for the Indian economy. The sector is highlyresponsible for propelling India's overall development and enjoys intense focus fromGovernment for initiating policies that would ensure time-bound creation of world classinfrastructure in the country. Infrastructure sector includes power bridges dams roadsand urban infrastructure development.

The traction that the country's infrastructure development has seen in the last fewyears will to our minds continue in the future. Retail (CPI) inflation projected by theRBI to remain below 4% up to end-2019 should facilitate a soft monetary policy in FY20.Additionally the decisive market interventions of the central bank the recentrecapitalization of public sector banks and the ongoing resolution of chronic stressedasset cases through IBC give us reason for a broadly positive outlook.

Your company is steadfast in adopting modern technologies for better execution andimproving the margins going forward.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business in your Company during the year underreview.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same is enclosed as Annexure-I.

BOARD MEETINGS

During the year ended 31st March 2019 six Board Meetings were convened and held. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

The dates on which the Board meetings were held are 7th April 2018 20th June 201823rd July 2018 13th August 2018 9th November 2018 and 13th February 2019.

Attendance of Directors at the meetings:

The details of the attendance of the Directors at the Board meetings held during theyear ended 31st March 2019.

Name of the Director Number of Board Meetings
Held Attended
Mr. P. Purnachander Rao* 4 4
Mr. M.V. Narasimha Rao 6 6
Mr. G. Jagannadha Rao 6 5
Ms. P. Laxmi 6 6

* Mr. P. Purnachander Rao resigned as the Director of the Company with effect from 5thOctober 2018.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

a. that in the preparation of the annual financial statements for the year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

b. that such accounting policies and applied them consistently and judgement andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2019 and of the profit ofthe Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and

f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT

Pursuant to the Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Business Responsibility Reportis NOT APPLICABLE.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. M.V. Narasimha Rao was regularized as a Director in the category of IndependentDirector of the Company in the 12th AGM held on 28th September 2018.

Mr. G. Jagannadha Rao was regularized as a Director in the category of IndependentDirector of the Company in the 12th AGM held on 28th September 2018.

Ms. P. Laxmi was regularized as a Director in the category of Independent (woman)Director of the Company in the 12th AGM held on 28th September 2018.

Mr. P. Purnachander Rao was resigned as the Director of the Company with effect from5thOctober 2018.

RETIREMENT BY ROTATION

Directors are not required to retire by rotation.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted the declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section(6).

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Nomination and Remuneration (N&R) Committee discusses and decides theappointment of the Board of Directors and Key Managerial Personnel and their remuneration.The committee was constituted on 7th February 2018.

The Committee is headed by Mr. G. Jagannadha Rao as a Chairman and Mr. M.V. NarasimhaRao and Ms. P. Laxmi as members of the Committee.

During the financial year ended 31st March 2019 one meeting washeld by the Nominationand Remuneration Committee on 7th April2018.

The Nomination Remuneration & Evaluation Policy is enclosed as an Annexure-II.

AUDITORS REPORT

There are no qualifications in the Auditors Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The company has not entered into any Contract or arrangements with the Related Partiesas on 31st March 2019. Accordingly Form AOC-2 is not applicable to your Company.

TRANSFER OF AMOUNT TO RESERVES

The Company has not made any profits for the Financial Year ended 31st March 2019.Therefore it has not transferred any amount to reserves.

DIVIDEND

The Board of Directors does not recommend any dividend on the Equity Shares orPreference Shares for the financial year ended 31st March 2019.

MATERIAL CHANGES AND COMMITMENTS

During the year under review the Equity Shares of the Company are listed on BSELimited and National Stock Exchange of India Limited with effect from 28th June 2018 andare open for trading.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY: Not Applicable

i) the steps taken or impact on conservation of energy;

ii) the steps taken by the company for utilising alternate sources of energy;

iii) the capital investment on energy conservation equipments;

B. TECHNOLOGY ABSORPTION: Not Applicable

i) the efforts made towards technology absorption;

ii) the benefits derived like product improvement cost reduction product developmentor import substitution;

iii) in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)-

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology been fully absorbed;

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; and

iv) the expenditure incurred on Research and Development.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Not Applicable

Total Foreign Exchange Earned: Nil

Total Foreign Exchange Outgo: Nil

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has implemented a standard operating procedure for all accounting andfinancial matters to reduce accounting and financial risk to minimal levels and to ensurethat the financial statements are free of material misstatements.

The Company has implemented a risk management policy and has constituted a CorporateRisk Management Committee to comply the provisions of the Companies Act 2013.

The Committee is headed by: Mr. G. Jagannadha Rao as a Chairman and Ms. P. Laxmi andMr. M.V. Narasimha Rao as members of the Committee.

The Committee meetings will be held as and when required by the Company.

POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIAL RESPONSIBILITYINITIATIVES TAKEN DURING THE YEAR

The Company has constituted Corporate Social Responsibility Committee to comply theprovisions of the Section 135 of the Companies Act 2013.

The Corporate Social Responsibility committee was constituted as follows:

Mr. M.V. Narasimha Rao – Chairman
Mr. G. Jagannadha Rao – Member
Ms. P. Laxmi – Member

The Committee meetings are held as and when required by the Company.

Since there are no profits in the Company for the preceding 3 years the company hasnot spent any amount towards Corporate Social Responsibility.

The Corporate Social responsibility policy of the Company is annexed herewith asAnnexure-III.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board has carried out an annual performance evaluation of its own performancethe directors individually as well as the evaluation of the working of its AuditNomination & Remuneration Committees.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Indian Accounting Standards Ind AS – 110 Ind AS – 28 andInd AS 31 issued by the Institute of Chartered Accountants of India and specified undersection 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules2014; your Directors have pleasure in attaching the Consolidated Financial Statements forthe financial year ended 31st March 2019 which forms part of the Annual Report andaccounts.

As per the provisions of Section 136 of the Companies Act 2013 the Company has placedseparate audited accounts of its subsidiaries on its website www.gayatrihighways.com and acopy of separate audited financial statements of its subsidiaries will be provided toshareholders upon their request.

SUBSIDIARY COMPANIES JOINTLY CONTROLLED ENTITIES AND ASSOCIATE COMPANIES

During the Financial Year ended 31st March 2019 your Company has four subsidiariesone associate Company and three joint venture companies.

We would like to inform you that our wholly owned subsidiary M/s. Sai MaatariniTollways Limited has terminated its Concession agreement with National Highways Authorityof India (NHAI) due to the Force Majeure (Political event).

The Concession agreement was made to construct four-laning road of Panikoili-Rimulisection of NH-215 from Km 0.00 to Km 163.00 (Design length 166.173 km) in the state ofOdisha under NHDP phase-III as BOT (Toll) on DBFOT pattern.

The names of companies which have become the Company's Subsidiaries joint ventures orassociate companies during the year are as follows:

Subsidiaries:

Indore Dewas Tollways Limited

Sai Maatarini Tollways Limited

Gayatri Jhansi Roadways Limited

Gayatri Lalitpur Roadways Limited

Associates:

Balaji Highway Holdings Private Limited

Jointly Controlled Entities:

Hyderabad Expressways Limited

Cyberabad Expressways Limited

HKR Roadways Limited

A statement containing salient features of the financial statements of subsidiaries/associate companies/ joint ventures in Form AOC - 1 is enclosed herewith as Annexure-IV.

During the Financial Year no company is ceased to be the Company's Subsidiary jointventure or associate company.

PERFORMANCE AND CONTRIBUTION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINT VENTURES

As per Rule 8 of Company's (Accounts) Rules 2014 a Report on the financial performanceof subsidiaries associates and joint venture companies along with their contribution tothe overall performance of the Company during the Financial Year ended 31st March 2019 isenclosed as Annexure-V.

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

STATUTORY AUDITORS

M/s G.S. Sai Babu & Associates Chartered Accountants bearing ICAI Regd. No.014207S were appointed as statutory auditors of the Company to hold office from theconclusion of 11th Annual General Meeting till the conclusion of the 16th Annual GeneralMeeting.

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The Company has not employed anyindividual whose remuneration falls within the purview of the limits prescribed under theprovisions of section 197 of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

Your Company has ensured that appropriate policies and procedures are adopted forensuring orderly and efficient conduct of the business including adherence to Company'spolicies the safeguarding of its assets prevention and detection of fraud and error theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information. The Company has Internal Financial Controls with reference to theFinancial Statements commensurate with the size of the operations of the Company andadequate and operating efficiently.

SHARE CAPITAL

The Paid-up Share Capital of the Company as on 31st March 2019 is Rs. 2156306800divided into 239651900 Equity Shares of Rs.2/- each fully paid up and 167700300 9% Nonconvertible Cumulative Redeemable Preference shares (NCRPS) of Rs. 10/- each.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this Report andprovides details of the overall industry structure developments performance and state ofaffairs of the Company's various businesses viz. infrastructure BOT Annuity projects andtheir adequacy Risk Management Systems and other material developments during thefinancial year. The Management Discussion and Analysis Report for the financial year underreview as stipulated under Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirement) Regulations 2015 is enclosed asAnnexure-VI.

CEO AND CFO CERTIFICATION

The annual certification given by the Chief Executive Officer and Chief FinancialOfficer of the Company is published in this Annual Report.

SECRETARIAL AUDITORS REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshave appointed DVM & Associates LLP Practicing Company Secretaries as SecretarialAuditors to conduct Secretarial Audit of the Company for the Financial year ended 31stMarch 2019.

The Secretarial Audit Report issued by DVM & Associates LLP Practicing CompanySecretaries in Form MR-3 is enclosedas Annexure-VII.

The Secretarial Audit Report does not contain any qualifications reservation oradverse remarks.

BOARD'S RESPONSE ON AUDITOR'S QUALIFICATION RESERVATION OR ADVERSE REMARKS ORDISCLAIMER MADE

There are no qualifications reservations or adverse remarks made by the statutoryauditors in their report or by the Practicing Company Secretary in the Secretarial AuditReport for the year.

During the year there were no instances of frauds reported by auditors under Section143(12) of the Companies Act 2013.

INTERNAL AUDITORS

The Board of Directors of the Company has appointed Mr. Raju Poojari CharteredAccountant (Rep. by Shalang Advisory Services (OPC) Pvt. Ltd.) as an Internal Auditor inthe Board meeting held on 20thJune 2018 with effect from 1st April 2018 to conductInternal Audit of the Company.

MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OFTHE COMPANIES ACT 2013

The provisions relating to maintenance of Cost Records as specified by the CentralGovernment under Section 148 of the Companies Act 2013 is not applicable to the Company.

AUDIT COMMITTEE
The Audit Committee consists of the following Directors:
Mr. M.V. Narasimha Rao - Chairman
Mr. G. Jagannadha Rao - Member
Ms. P. Laxmi - Member

During the financial year ended 31st March 2019 4 meetings were held by the AuditCommittee on 20th June 2018 13th August 2018 9th November 2018 and 13th February2019.

There has been no such incidence where the Board has not accepted the recommendation ofthe Audit Committee during the year under review.

CORPORATE GOVERNANCE REPORT

A separate report on Corporate Governance is enclosed as Annexure-VIII as a part of theAnnual Report along with the certificate from the Practicing Company Secretary on itscompliance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanismfor the Directors and employees to report concerns about unethical behavior actual orsuspected fraud or violation of Code of Conduct and Ethics. It also provides for adequatesafeguards against the victimization of employees who avail of the mechanism and providesdirect access to the Chairperson of the Audit Committee in exceptional cases. It isaffirmed that no personnel of the Company has been denied access to the Audit Committee.The policy of vigil mechanism is available on the Company's website.

The Whistle Blower Policy aims for conducting the affairs in a fair and transparentmanner by adopting highest standards of professionalism honesty integrity and ethicalbehavior. All employees of the Company are covered under the Whistle Blower Policy.

MEETING OF INDEPENDENT DIRECTORS

In accordance with the provisions of schedule IV (Code for Independent Directors) ofthe Companies Act 2013 and SEBI (LODR) Regulations 2015 a meeting of the IndependentDirectors of the Company was held in the financial year on 13th February 2019 withoutthe attendance of Non-Independence Directors and members of the management.

DISCLOSURE AS PER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

The provisions of Section 22 of Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 is not applicable to the Company.

ENVIRONMENT HEALTH AND SAFETY

The Company considers it is essential to protect the Earth and limited naturalresources as well as the health and well being of every person.

The Company strives to achieve safety health and environmental excellence in allaspects of its business activities. Acting responsibly with a focus on safety health andthe environment is a part of the Company's DNA.

INDIAN ACCOUNTING STANDARDS (IND AS)

The Company has adopted Indian Accounting Standards (Ind AS) with effect from theFinancial Year 2016-17 pursuant to Ministry of Corporate Affairs' notification of theCompanies (Indian Accounting Standards) Rules 2015.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Your Company lays emphasis on competence and commitment of its human capitalrecognizing its pivotal role for organizational growth.During the year the Companymaintained a record of peaceful employee relations.

Your Directors wish to place on record their appreciation for the commitment shown bythe employees throughout the year.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company are listed on BSE Limited and National Stock Exchangeof India Limited with effect from 28th June2018 and are open for trading.

ACKNOWLEDGEMENTS

We express our sincere appreciation and thank our valued Shareholders CustomersBankers Business Partners/ Associates Financial Institutions Insurance CompaniesCentral and State Government Departments for their continued support and encouragement tothe Company.

We are pleased to record our appreciation of the sincere and dedicated services of theemployees and workmen at all levels.

For and on behalf of the Board
Place: Hyderabad M.V. NARASIMHA RAO G. JAGANNADHA RAO
Date: 13th August 2019 DIRECTOR DIRECTOR
DIN: 06761474 DIN:01059819

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