To the Members
The Directors have pleasure in presenting before you the Board's Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March2020.
Financial Results (Standalone):
|Particulars ||2019-20 ||2018-19 |
|Revenue from Operations || |
|Profit Before Interest Depreciation || |
|Exceptional Items and Taxes || || |
|Less: Financial Cost || |
|Profit before Depreciation || |
|Exceptional Items and Taxes || || |
|Less: Depreciation and || |
|Amortisation Expenses || || |
|Add : Other Income || |
|Profit before Exceptional || |
|Items and Taxes || || |
|Less: Exceptional Items (Net) || |
|Profit Before Tax || |
|Provision for Tax || |
|Profit After Tax || |
|Other Comprehensive || |
|income/(losses) for the Year || || |
|Total comprehensive || |
|income for the year || || |
|Paid up Capital || |
Review of Operations:
Gayatri Projects has achieved revenue of Rs 3427.33 crores in FY2020 as against Rs3463.15 crores in the previous year. The marginal dip of 1% is on account of COVID-19pandemic and followed by countrywide lockdown. On the operational front Gayatri Projectshas seen an EBITDA margin ratio at 12.45% for the year. EBITDA margin dropped compared tolast year due to high cost of raw materials and fixed operating cost booking duringlockdown period. The company believes that margins should improve to normalised levels of15%+ from FY21 onwards.
Gayatri Projects posted net loss after tax at Rs 384.57 crores during FY2020 mainlydue to exceptional loss of Rs 445.34 crores booked due to sale of Sembcorp Energy IndiaLimited shares by the wholly owned subsidiary of Gayatri Projects Ltd. The profits fromthe "Core Operations" of the Company (Construction) are positive and in linewith the past and also in line with the peers.
In line with the Company's stated plan to concentrate on core business of constructionand reduce the group debt the company has sold the investment in the power companySembcorp Energy India Limited (SEIL) for an amount of INR 406.77 Crores. The abovetransaction resulted on exceptional loss of Rs 445.34 Crores in the books of our company.The exceptional loss on account of sale of investment is onetime and mandatory adjustmentas per Accounting Standards of ICAI hence the same is provided. As a part ofconsideration the subsidiary of Gayatri is entitled for the "Earnout" whichwill be calculated on first or second sale by Sembcorp. The prospect of getting the upsideis high and the present loss can be set off from the gains of the above Earnout if any.
The company has not bagged any major work order during the year. The company isfocussing in executing the current order book of Rs 13000 crores. The company is alsoconcentrating on the realisation of contractual claims to reduce its debt levels.
Gayatri Projects work orders are diversified both geographically and sector wise and68% of the company's projects come from the roads & highways sector 25% comes fromirrigation projects and remain 7% consisting of industrial mining and other works. Interms of geographical diversification Uttar Pradesh is the key contributor to thecompany's order book at 25% followed by Odisha Telangana & Maharashtra.
There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of the financial year 2020 and the date ofthis report.
The Government of India is expected to invest highly in the infrastructure sectormainly highways renewable energy and urban transport. In April 2020 the Government seta target of constructing roads worth Rs 15 lakh crore in the next two years. In the UnionBudget 2020-21 the Government has given a massive push to the infrastructure sector byallocating Rs 169637 crore (US$ 24.27 billion) to develop the transport infrastructure.Gayatri Projects which is having experience and qualification criteria is going to benefitby taking the major projects.
Gayatri Projects is having strong order book of Rs 13000 crores as at 31st March 2020and order book mainly consisting of road and irrigation works of 92%. Our company ishaving financial visibility for another three years and order book is going to be furtherstrengthened from expected new orders in FY2020-21. Hence Construction Sector future isexpected to be strong and reliable.
As per the conditions stipulated by the lenders in the Master Restructuring Agreementwhich is in force approval of the lender is required for declaration of dividend to theshareholders. The lenders of the Company have not accorded their approval for dividend forthe financial year ended March 31 2020 due to the financial stress in the company.
Dividend Distribution Policy:
In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI ListingRegulations') the Board of Directors of the Company (the Board') formulated andadopted the Dividend Distribution Policy (the Policy'). As per the Policy theCompany after considering various external factors that may have an impact on thebusiness as well as internal factors such as the long-term growth strategy of the Companyand the liquidity position including working capital requirements and debt servicingobligations will endeavor to pay dividend subject to the applicable rules andregulations.
In compliance of the said requirement the company has formulated its DividendDistribution Policy is annexed as Annexure 1 and is also available on the Company'swebsite at: http://www.gayatri.co.in/ corporate-governance.html.
During the period there were no changes in the share capital of the Company. TheAuthorised share capital of the company is Rs.800000000 divided into 400000000equity shares of Rs.2/- each and the paid-up share capital of the Company is Rs.374397370 divided in to 187198685 Equity shares of Rs.2/- each.
Material Changes and Commitments affecting the Financial Position of the Company:
There are no material changes and commitments affecting financial position of thecompany between the end of the financial year to which these statements relate and thedate of this Board's Report. There is no change in the nature of business of the Companyduring the year under review.
The Board of Directors met 7 times in the Financial Year 201920 on 30thMay 2019 06th August 2019 14th August 2019 14thNovember 2019 16th November 2019 04th January 2020 and 14thFebruary 2020.
Directors and Key Managerial Personnel:
During the year the following changes took place in the Directors and Key ManagerialPersonnel of the Company:
|Name ||Designation ||Reasons for change |
|V.L. Moorthy (DIN:00013083) ||Independent Director ||Resigned as independent director w.e.f 09.05.2019. |
|G. Siva Kumar Reddy (DIN:00439812) ||Independent Director ||Resigned as independent director w.e.f 28.05.2019. |
|Gayathri Ramachandran (DIN: 02872723) ||Independent Director ||Appointed as Independent Director (Woman independent Director) w.e.f 06.08.2019. |
|K. Jairaj (DIN: 01875126) ||Independent Director ||Appointed as Independent Director w.e.f 06.08.2019. |
|J.N Karamchetti (DIN:00940963) ||Independent Director ||Resigned as independent director w.e.f 14.11.2019. |
|K. Jairaj (DIN: 01875126) ||Independent Director ||Resigned as independent director w.e.f 04.12.2019. |
|I.V. Lakshmi ||Company Secretary and Compliance Officer ||Resigned as a Company Secretary and Compliance Officer w.e.f 07.12.2019. |
|Gayathri Ramachandran (DIN: 02872723) ||Independent Director ||Resigned as independent director (Woman independent Director) |
| || ||w.e.f 16.12.2019. |
|K.V. Ramana Chary (DIN: 08658826) ||Independent Director ||Appointed as Independent Director w.e.f 04.01.2020. |
|G. Sreeramakrishna (DIN: 06921031) ||Independent Director ||Appointed as Independent Director w.e.f 04.01.2020. |
|Chetan Kumar Sharma ||Company Secretary and Compliance Officer ||Appointed as a Company Secretary and Compliance Officer w.e.f 04.01.2020. |
|N. Rama Devi (DIN: 08699570) ||Independent Director ||Appointed as Independent Director (Woman independent Director) w.e.f 14.02.2020. |
However after the closure of financial year Bank of Baroda (Lead Banker for theConsortium) has withdrawn Shri. Birendra Kumar as its nominee on the Board and nominatedShri. P. Sreenivas as its nominee on the Board of the Company.
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meets the criteria of their Independence laid down in Section 149(6). Otherdetails given in Corporate Governance Report.
Composition of Audit Committee:
The Audit Committee of the Board of Directors is as follows:
|Name of the Member ||Designation |
|Mr. Ch. Hari Vithal Rao ||Chairman |
|Mr. J. N. Karamchetti ||Member(ceased to be member w.e.f 14.11.2019) |
|Mrs. T. Indira Reddy ||Member(Appointed as member w.e.f 30.05.2019 and ceased to be member w.e.f 04.01.2020) |
|Mr.T. V. Sandeep Kumar Reddy ||Member (Appointed as member w.e.f 04.01.2020) |
|Mr. G. Sreeramakrishna ||Member (Appointed as member w.e.f 04.01.2020) |
Policy laid down by the Nomination and Remuneration Committee for Remuneration ofDirectors KMP & Other Employees:
The Remuneration policy of the Company is performance driven and is structured tomotivate Employees. Recognize their merits and achievements and promote excellence intheir performance.
The salient features of the Policy are:
It ensures that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully.
It lays down Relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.
It formulates a criteria for determining qualifications positive attributes andindependence of a Director.
It contains guidelines for determining that the remuneration to Directors KeyManagerial Personnel and Senior Management involves a balance between fixed and incentivepay reflecting short and long term performance objectives appropriate to the working ofthe Company and its goals.
To recommend to the Board policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management.
During the year under review there has been no change to the Policy. The NominationRemuneration and Evaluation Policy of the company is available at website of the Companyat https://
Manner in which formal Annual Evaluation has been made by the Board of its OwnPerformance and that of its Committees and Individual Directors:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out evaluation of (i) itsown performance (ii) the directors individually and (iii) working of its Committees. Themanner in which the evaluation was carried out as detailed below:
(a) Nomination & Remuneration Committee:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Nomination and Remuneration Committee hasformulated the criteria for evaluation of directors and evaluated every director. Astructured questionnaire was prepared after taking into consideration various parameterssuch as attendance and participation in meetings monitoring corporate governancepractices independence of judgment safeguarding the interests of the company etc. andaccordingly the evaluation was made. The Members of the Committee evaluated the individualdirectors at its meeting held on 14.02.2020.
The Nomination and Remuneration Committee decided that since the performance of thedirectors has been excellent it is decided to continue with the term of the directorsthe Managing Director and the Executive Director.
(b) Separate Meeting of Independent Directors:
The Independent directors of the Company at its meeting held on 14.02.2020 (a) reviewedthe performance of the non-independent directors and Board (b) reviewed the performanceof the Chairperson of the Company and (c) assessed the quality quantity and timeliness offlow of information between the company management and the Board. All the IndependentDirectors attended the meeting.
A structured questionnaire was prepared after taking into consideration variousparameters such as attendance and participation in meetings monitoring corporategovernance practices independence of judgment safeguarding the interests of the companyetc. and accordingly the evaluation was made. The independent directors evaluated thenon-Independent directors.
The Independent Directors decided that since the performance of the Non-IndependentDirectors (including Managing Director and Whole time Director) is excellent the term oftheir appointment be continued.
The Independent Directors after review of the performance of the Chairman decided thatthe Chairperson has good experience knowledge and understanding of the Board'sfunctioning and her performance is excellent. The Independent Directors decided that theinformation flow between the Company's Management and the Board is excellent.
(c) Evaluation by Board: The Board has carried out the annual performanceevaluation of Independent Directors individually. A structured questionnaire was preparedafter taking into consideration various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees effectiveness in developingCorporate governance structure to fulfil its responsibilities execution and performanceof specific duties etc. The Board decided that the performance of Independent directorsis excellent.
Director's Responsibility Statement:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively
Subsidiaries Associates and Joint Ventures:
The Company has 2 (Two) subsidiary companies (including step down subsidiary) and 1(one) associate company as on 31st March 2020 as per the Companies Act 2013.During the year under review the Board of Directors reviewed the affairs of materialunlisted subsidiary.
As per the provisions of Section 129 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a separate statement containing the salient features of thefinancial statements of the subsidiary Companies/ Associate Companies/Joint Ventures isprepared in Form AOC-1 are given in Annexure- II.
The Company will make available the Annual Accounts of the subsidiary companies andconsolidated financial statements of the company on the website of the company as persection 136 of the Companies Act 2013 and SEBI (LODR) 2015 as amended. The annualaccounts of the subsidiary companies will also be made available for inspection throughonline made to members who requests for same.
The company has adopted the policy for determining material' subsidiaries and thesame has been placed on the website of the company at https://www.gayatri.co.in/corporate-governance.html
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 an extract ofannual return in MGT 9 as a part of this Annual Report is annexed as Annexure-III.
Consolidated Financial Statements:
In compliance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and in compliance with the provisions of Section 129(3)and other applicable provisions of the Companies Act 2013 and Ind AS-110 and otherapplicable Accounting Standards your Directors have pleasure in attaching theconsolidated financial statements for the financial year ended March 31 2020 which formspart of the Annual Report.
Statutory Auditors and Their Report:
At the 29th AGM held on September 28 2018 the Members approved appointmentof M/s. M O S & Associates LLP Chartered Accountants (Firm Registration No.001975S/S200020) as Statutory Auditors of the Company to hold office for a period of fiveyears from the conclusion of that AGM till the conclusion of the 34th AGM.
The Auditor's Report to the members of the Company for the Financial Year ended March31 2020 does not contain any qualification(s).
As per the provisions of the Section 204(1) of the Companies Act 2013 the Company hasappointed Mr. Y. Koteswara Rao Practicing Company Secretary to conduct Secretarial Auditof the records and documents of the Company The Secretarial Audit Report for theFinancial Year ended 31st March 2020 in Form No. MR-3 is annexed to theDirectors Report as Annexure - IV and forms part of this Report. The SecretarialAuditors' Report to the Members of the Company for the Financial Year ended March 31 2020does not contain any qualification(s) or adverse observations.
Company has not accepted any deposits covered under Chapter V of the Companies Act2013
b) Conservation of energy
The Company's main line of activity is civil construction which is not power intensive.
However the Company is taking all efforts to conserve the usage of power.
(i) Use of alternate sources of energy is not applicable to the Company.
(ii) Capital investment on energy conservation equipment for its main line of activityis not applicable to the Company.
c) R & D Technology absorption
The Company main line of activity is civil construction and hence R &D andtechnology absorption is not applicable to the Company.
d) Foreign Exchange Earnings - NIL
e) Foreign Exchange Outgo
|Nature of Payment ||Amount in Rs Lakhs |
|1 Foreign Travel ||2.14 |
|2 Repayment of ECB Interest ||68.19 |
|3 Consultancy & Technical Fees ||2425.94 |
|4 Purchase of Plant & Machinery ||293.41 |
|5 Purchase of Spares & Materials ||1885.27 |
Details of Adequacy of Internal Financial Controls:
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies andinternal financial controls laid down by the Company.
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. Alsopursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the particulars of Loans/Advances given to Subsidiaries have beendisclosed in the notes to the Financial Statements.
Management Discussion & Analysis:
Management Discussion and Analysis Report is annexed which forms part of this Report as
Risk Management Policy:
The Company has been addressing various risks impacting the Company and developed riskpolicy and procedures to inform Board members about the risk assessment and minimizationprocedures.
Whistle Blower Policy/Vigil Mechanism:
Pursuant to Section 177 of the Companies Act 2013 and the Rules framed there under andpursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompany has established a mechanism through which all the stakeholders can report thesuspected frauds and genuine grievances to the appropriate authority. The Whistle BlowerPolicy which has been approved by the Board of Directors of the Company has been hosted onthe website of the Company at https:// www.gayatri.co.in/corporate-governance.html.
Disclosure as per Section 22 of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder theCompany has not received any complaint of sexual harassment during the year under review.
Complaints received disposed and pending during the year:
|Number of complaints filed during the financial year ||Nil |
|Number of complaints disposed of during the financial year ||Nil |
|Number of complaints pending as on end of the financial year ||Nil |
Corporate Social Responsibility Policy:
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure-VI of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The policy is available on thewebsite of the Company at https://www.gayatri.co.in/ corporate-governance.html.
Significant & Material Orders Passed by the Regulators:
There are no significant and material orders passed against the Company by theregulators impacting the Company's operation in the future.
Contracts or Arrangements with Related Parties:
All related party transactions that were entered during the financial year were in theordinary course of the business of the Company and were on arm's length basis. There wereno materially significant related party transactions entered by the Company during theyear with Promoters Directors Key Managerial Personnel or other persons which may have apotential conflict with the interest of the Company. Disclosure in from AOC-2 is annexedas
The policy on dealing with Related Party
Transactions is disseminated on the website of the company athttps://www.gayatri.co.in/corporate-governance.html.
Your Company has not accepted or renewed any deposit from public during the year underreview. Further no amount on account of principal or interest on deposits from public wasoutstanding as one the date of the balance sheet.
M/s. N.S.V. KRISHNA RAO & Co. Cost Auditors were appointed as cost auditor to auditthe cost records of the Company for the F.Y 2019-20 and reappointed for the F.Y 2020-21.
Particulars of Employees:
Details in respect of remuneration paid to employees as required under Section 197 (12)of the Companies Act 2013 read with Rule 5(2) & (3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended forms part of thisreport.
The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are enclosed in Annexure VIII and forms part of this Report.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 toNational Stock Exchange of India Limited and BSE Limited where the Company's Shares arelisted.
Corporate Governance and Shareholders Information:
Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A report on Corporate Governance is included as a part ofthis Annual Report as Annexure -IX. Certificate from the practicing CompanySecretary confirming the compliance with the conditions of Corporate
Governance as stipulated under aforesaid regulations is attached to this report.
Business Responsibility Report
As per Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Business Responsibility Report covering the principle wiseperformance of the Company on the nine principles as per National Voluntary Guidelines(NVGs) forms a part of the Annual report of the Company annexed as Annexure -X.
The company has in place proper systems to ensure compliance with the provisions of theapplicable secretarial standards issued by The Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively.
Your Directors would like to acknowledge and place on record their sincere appreciationto all stakeholders clients financial institutions Banks Central and StateGovernments the Companies' valued investors and all other business partners for theircontinued cooperation and excellent support received during the year.
Yours Directors recognize and appreciate the efforts and hard work of all the employeesof the Company and their continued contribution to its progress.
| || ||For and on behalf of the Board |
| ||Sd/- ||Sd/- |
| ||T. INDIRA REDDY ||T.V.SANDEEP KUMAR REDDY |
| ||Chairperson ||Managing Director |
| ||DIN:00009906 ||DIN:00005573 |
| ||Sd/- ||Sd/- |
| ||P. SREEDHAR BABU ||CHETAN KUMAR SHARMA |
| ||Chief Financial Officer ||Company Secretary & Compliance Officer |
|Place: Hyderabad. || || |
|Date: 30.06.2020 || || |