To the Members
The Directors have pleasure in presenting before you the Boards Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2018.
|Financial Results (Standalone) || ||Rs. in Lakhs |
|Particulars ||2017-18 ||2016-17 |
|Revenue from Operations ||291231.24 ||211535.05 |
|Other Income ||892.40 ||3058.34 |
|Total Income ||292123.64 ||214593.39 |
|Profit Before Interest Depreciation Exceptional Items and Taxes ||47658.91 ||35400.05 |
|Less: Financial Cost ||23937.09 ||20138.18 |
|Profit before Depreciation ||23721.82 ||15261.87 |
|Exceptional Items and Taxes || || |
|Less: Depreciation and Amortisation Expenses ||5467.06 ||4315.54 |
|Profit before Exceptional Items and Taxes ||18254.76 ||10946.33 |
|Less: Exceptional Items (Net) ||- ||(1538.65) |
|Profit Before Tax ||18254.76 ||9407.68 |
|Provision for Tax ||(554.59) ||2365.16 |
|Profit After Tax ||18809.35 ||7042.52 |
|Other Comprehensive income/ (losses) for the Year ||325.81 ||17.11 |
|Total comprehensive income for the year ||19135.16 ||7059.63 |
|Paid up Capital ||3743.97 ||3545.04 |
Review of Operations
The Operational Revenue during the year under review has increased to ` 291231.24 Lakhsas against from ` 211535.05 Lakhs in the previous year registering year on year growth of37.67%.The growth in revenue is driven by the strong order book of the company.
The Company EBITDA margins during the year have increased to 16% as compared to 14% inthe previous year mainly on account of better monitoring and systems introduced by thecompany. The Companys PBT margins improved to 6.27% in FY 2018 from 3% in previousyear due to cost control measures introduced by the company. The PAT margins improved to6.46% in FY 2018 from 3.33% in the previous year on account of the reversal of excessincome tax provision made in the previous year.
The companys order book continues to grow at healthy rate and stood at 13250crores as on 31st March 2018. The composition of works in order book are Roads: 60.02%Irrigation:26.48% Industrial: 11.77% and Others 1.73%.
There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of the financial year 2018 and the date ofthis report.
The Indian economy has recovered following the aftermath of demonetization with globalrating agencies upgrading their ratings for the country. During the year the Goods andServices Tax (GST) was rolled out to replace different rates of taxes across the country.GST subsumed several different taxes and unified the Indian market. In spite of theinitial hiccups the system is now much more stable. The Indian economy is showing signsof revival and International Monetary Fund (IMF) reaffirmed that India will be the fastestgrowing major economy in 2018 with a growth rate of 7.4 per cent that rises to 7.8 percent in 2019 with medium-term prospects remaining positive.
The Government of India taking every possible initiative to boost the infrastructuresector mainly highways renewable energy and urban transport. In the Union Budget 2018Government has given massive push to the infrastructure sector by allocating ` 5.97 lakhcrores for this sector.
Yours Company as a leading construction company with experienced staff and machinery isin advantageous position to benefit from the Government investment in infra sector. YourCompany is committed to continue to work towards improving the order book and profits.Your Company is also exploring to venture into new areas within the infrastructure sectorfor better margins and less competition.
The present order book of the company is at ` 1250.10 crores as at 31st March 2018 andthe company is planning to improve the same to higher level during the year.
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 2018.
During the period under review the Company has issued and allotted 9946785 equityshares at a price of ` 201.07 (including a premium of ` 199.07) by way of QualifiedInstitutional Placement (QIP) in accordance with the SEBI (ICDR)
Regulations 2009 as amended from time to time. Pursuant to the aforesaid QIP thepaid-up share capital of the company has increased from ` 354503800 divided in to177251900 Equity shares of ` 2/- each to ` 374397370 divided in to 187198685Equity shares of ` 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 Boards Report. There is no change in the nature of business of theCompany during the year under review.
The Board of Directors met 6 times in the Financial Year 201718 on 18th April2017 29th May 2017 14th August 2017 17th November 2017 06th December 2017 and 07thFebruary 2018.
Directors and Key Managerial Personnel
During the year under review Shri. Birendra Kumar General Manager & Zonal HeadBengaluru Zone Bank of Baroda was appointed as Nominee Director replacing Shri.Venkateswarlu Kakkera in accordance with Master Restructuring Agreement entered with theJoint Lenders Forum (JLF)
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 meet with the criteria of their Independence laid down in Section 149(6).
Composition of Audit Committee
The Audit Committee of the Board of Directors is as follows:
|Mr. Ch. Hari Vittal Rao ||Chairman |
|Dr. V. L. Moorthy ||Member |
|Mr. G. Siva Kumar Reddy ||Member |
|Mr. J.N. Karamchetti ||Member |
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 Nomination Remuneration and Evaluation Policy of the company isenclosed at Annexure-I of this report.
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 ofthe Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Nomination and Remuneration Committee has formulated the criteriafor evaluation of directors and evaluated every director. A structured questionnaire wasprepared after taking into consideration various parameters such as attendance andparticipation in meetings monitoring corporate governance practices independence ofjudgment safeguarding the interests of the company etc. and accordingly the evaluationwas made. The Members of the Committee evaluated the individual directors at its meetingheld on 07.02.2018.
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 theCompany at its meeting held on 07.02.2018
(a) reviewed the performance of the non-independent directors and Board (b) reviewedthe performance of the Chairperson of the Company and (c) assessed the quality quantityand timeliness of flow of information between the company management and the Board. Allthe Independent Directors attended the meeting. A structured questionnaire was preparedafter taking into consideration various parameters such as attendance and participation inmeetings monitoring corporate governance practices independence of judgmentsafeguarding the interests of the company etc. and accordingly the evaluation was made.The independent directors evaluated the non-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 Chairman has good experience knowledge and understanding of the Boardsfunctioning and her performance is excellent. The Independent Directors decided that theinformation flow between the Companys Management and the Board is excellent.
(c) Evaluation by Board: The Board has carried out the annual performanceevaluation of its own performance the Directors individually (excluding the directorbeing evaluated) as well as the evaluation of the working of its Committees. A structuredquestionnaire was prepared after taking into consideration various aspects of theBoards functioning such as adequacy of the composition of the Board and itsCommittees effectiveness in developing Corporate governance structure to fulfil itsresponsibilities execution and performance of specific duties etc. The Board decided thatthe performance of individual directors its own performance and working of the committeesis excellent.
Directors 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 accountingstandards had been followed along with proper explanation relating to material departures;(b) the directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit 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) thedirectors had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively. (f) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively
Subsidiaries Companies Associates and Joint Ventures:
The Company has two subsidiary companies (including step down subsidiaries) as on 31stMarch 2018 as per the Companies Act 2013.
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 and therelated information to any member of the Company who may be interested in obtaining thesame. The annual accounts of the subsidiary companies will also be kept open forinspection by any member at the Registered Office of the Company and that of therespective subsidiary companies.
The company has adopted the policy for determining material subsidiariesand the same has been placed on the website of the company athttp://www.gayatri.co.in/Investors/Corporate Governance/Policies.
Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 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 2018 which formspart of the Annual Report.
Statutory Auditors and Their Report
The Auditors M/s. M O S & Associates LLP Chartered Accountants Hyderabad retireat the ensuing Annual General Meeting and being eligible; offer themselves forreappointment for a period of one year from the conclusion of this Annual General Meeting[AGM] till the conclusion of next AGM. Your Board of Directors have recommended theirreappointment based on the recommendation of the Audit Committee to the members for theirapproval at the forthcoming Annual general meeting for a term of one year till theconclusion of the next AGM.
The Auditors Report to the members of the Company for the Financial Year endedMarch 31 2018 does not contain any qualification(s) or adverse observations.
As per the provisions of the Section 204(1) of the Companies Act 2013 the Company hasappointed Mr. Y. Koteswara Rao Practising Company Secretary to conduct Secretarial Auditof the records and documents of the Company. The Secretarial Audit Report for theFinancial Year ended 31st March 2018 in Form No MR-3 is annexed to the Directors Reportas Annexure - IV and forms part of this Report. The Secretarial AuditorsReport to the Members of the Company for the Financial Year ended March 31 2018 does notcontain 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 Companys main line of activity is civil construction which is not powerintensive. 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
|Sr No Nature of Payment ||Amount in ` Lakhs |
|1 Foreign Travel ||9.91 |
|2 Repayment of ECB Loan ||3162.40 |
|3 Repayment of ECB Interest ||700.96 |
|4 Consultancy & Technical Fees ||1863.26 |
|5 Purchase of Plant & Machinery ||2189.87 |
|6 Purchase of Spares & Materials ||772.32 |
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 Companys 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 which forms part of this annual report hasbeen provided separately.
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 http://www.gayatri.co.in/Investors/Corporate Governance/Policies.
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.
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-V 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 http:// www.gayatri.co.in/Investors/CorporateGovernance/Policies.
Significant & Material Orders Passed by the Regulators
There are no significant and material orders passed against the Company by theregulators impacting the Companys 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 arms length basis. Therewere no materially significant related party transactions entered by the Company duringthe year with Promoters Directors Key Managerial Personnel or other persons which mayhave a potential confiict with the interest of the Company. Further the Company hasentered materially significant related party transactions with related parties which wereon arms length basis as disclosed in AOC-2 annexed as Annexure -VI
The policy on dealing with Related Party Transactions is disseminated on the website ofthe company at http://www. gayatri.co.in/Investors/ Corporate Governance/Policies.
Your Company has not accepted or renewed any deposit from public during the year underreview.
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 2017-18 and re-appointed for the F.Y. 2018-19.
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. In terms of Section 136 of the Companies Act 2013 the same is open for inspectionat the Registered Office of the Company. Copies of this statement may be obtained by themembers by writing to the Company Secretary at the Registered Office of the Company.
The ratio of the remuneration of each Director to the median employeesremuneration and other details in terms of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are enclosed in Annexure VII and forms part of this Report.
Listing with Stock Exchanges
The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 toNSE and BSE where the Companys Shares are listed.
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. Certificate from the practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under aforesaidregulations 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.
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 fortheir continued co-operation 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 || |
|T. Indira Subbarami Reddy ||T.V. Sandeep Kumar Reddy |
|Chairperson ||Managing Director |
|DIN:00009906 ||DIN:00005573 |
|P. Sreedhar Babu ||CS I. V. Lakshmi |
|Chief Financial Officer ||Company Secretary & Compliance Officer |
|Place: Hyderabad. || |
|Date: 14th August 2018 || |