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Directors Report of Gayatri Projects Ltd.

Mar 31, 2015

To

The Members,

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS (Standalone) : Rs. in Lakhs

Particulars 2014-15 2013-14

Turnover 1,60,114.16 1,81,501.85

Profit Before Interest Depreciation and Taxes 21,196.12 27,217.96

Less: Interest and Finance Charges 14,867.18 15,972.69

Profit before Interest and Depreciation 6,328.94 11,245.27

Less: Depreciation 2,820.08 2,997.75

Profit before Tax 3,508.86 8,247.52

Provision for Tax 1,303.54 3,486.79

Profit after Tax 2,205.32 4,760.73

Profit brought forward 26,730.03 23,176.58

Profit available for appropriation 28,935.35 27,937.31

Appropriations:

Proposed Dividend at Rs1.00 per share (10%) 302.27 604.54

Dividend Tax on proposed Dividend 51.37 102.74

Transfer to General Reserve 500.00 500.00

Surplus carried to Balance Sheet 27,887.46 26,730.03

REVIEW OF OPERATIONS :

During the year 2014-15, the growth in operating income and profitability of construction companies remained muted which implies that execution is yet to pick up in a meaningful manner. This can be partly attributed to stretched financial position of many construction companies which has constrained resources for speeding up execution. The improvement in liquidity profile and credit metrics of construction companies will take some more time and will be subject to improvement in working condition.

The construction/infrastructure sector is likely to get major boost from the Government's focus on development of infrastructure in India. With the political stability, sharper focus on infrastructure development and improvement in economy, new projects announcements by both the public and private sector are likely to pickup in FY16. The Budget 2015 has taken a pro-growth stance and it does appear that the government is keen to expedite the growth process by directly contributing to investment. In the Budget the government announced increase in investment in infrastructure by Rs.70,000 crores for 2015-16 and the allocation in the roads sector has been increased by Rs.14,000 crores and that in railways by Rs.10,000 crores. Therefore that the recovery in the construction sector is certain but expected to be gradual linked to policy measures of the government.

During the year under review the company turnover has been declined to Rs.1601.14 crores from Rs.1812.53 crores in the previous year. The turnover is declined during the year 2014-15 mainly due to slow progress of the road projects in the north-east sector and held up irrigation projects in the Telangana State for technical/political reasons and land acquisitions issues. The EBITDA margins have decreased to 13.20% as compared to 15.00% in the previous year and PAT margin have decreased to 1.37% as against 2.62% in the previous year. The decrease in profit margins is due to fixed overheads such as financial cost, work expenses and other expenses vis-a-vis lower level of revenue.

Future Outlook :

The Company outstanding order book as on 31st March 2015 is of Rs.6,200 crores and so far during the current year company has short listed as lowest bidder for new road orders valued about Rs. 4,875 crores. The total order book including new works is about Rs. 11,075 crores. The strong order book coupled with the future tenders the company planning to bid will give major boost to the company in terms of revenue and profitability in the coming time.

DIVIDEND:

Despite the Difficult economic conditions your directors are pleased to recommend a dividend of Rs.1.00 per equity share (10%) of the face value of Rs.10/- for the period ended 31st March, 2015.

The dividend, subject to approval at the AGM on 28th day of September, 2015, will be paid to the shareholders; whose names appear on the Register of Members on 22nd September, 2015.

It is proposed to transfer Rs.500.00 Lakhs to the General Reserves of the Company from the current year profits.

SHARE CAPITAL

The paid up Equity Share Capital of the Company has been increased from Rs. 30.22 Crs to Rs. 33.83 Crs pursuant to allotment of 36,04,000 equity shares of the company to Foreign Institutional Investors (deemed FPI) by way of Preferential Issue.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments affecting Financial position of the company between the end of the financial year to which these statements relate and the date this Board's Report.

There is no change in the nature of business of the Company during the year under review.

BOARD MEETINGS:

The Board of Directors met 8 times in the Financial Year 2014–15 on 05th Day of May 2014, 29th Day of May 2014, 26th Day of July 2014, 14th of August 2014, 03rd of September 2014, 07th of November 2014, 30th December 2014, 14th of February 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL :

During the year under review, the Company has re-appointed Mr. T. V. Sandeep Kumar Reddy as Managing Director of the Company for a further period of five years w.e.f 01.10.2014 and Shri. V. L. Moorthy, Shri. G. Siva kumar Reddy and Shri. CH. Hari Vittal Rao as Independent Directors for a term of 5 years (Second term) by way of special resolution as per the provisions of Section 149 of the Companies Act, 2013.

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the 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

POLICY LAID DOWN BY THE NOMINATION AND REMUNERATION COMMITTEE FOR REMUNERATION OF DIRECTORS, KMP & OTHER EMPLOYEES:

The Remuneration policy of the Company is performance driven and is structured to motivate Employees. recognize their merits and achievements and promote excellence in their performance. The Nomination, Remuneration and Evaluation Policy of the company is enclosed at Annexure-I of this report.

Manner in Which Formal Annual Evaluation has been made by the Board of its Own Performance and that of its Committees and Individual Directors:

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Board has carried out evaluation of (i) its own performance, (ii) the directors individually and (iii) working of its Committees. The manner in which the evaluation was carried out as detailed below:

(a) Nomination & Remuneration Committee: Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the Listing agreement, the Nomination and Remuneration Committee at its meeting held on 14.02.2015 formulated the criteria for evaluation of directors and evaluated every director. A structured questionnaire was prepared after taking into consideration various parameters such as attendance and participation in meetings, monitoring corporate governance practices, independence of judgment, safeguarding the interests of the company etc., and accordingly the evaluation was made. The Members of the Committee evaluated the individual directors.

The Nomination and Remuneration Committee decided that since the performance of the directors has been excellent, it is decided to continue with the term of the directors, the Managing Director and the Executive Director.

(b) Separate Meeting of Independent Directors: The Independent directors of the Company at its meeting held on 14.02.2015 (a) reviewed the performance of the non-independent directors and Board, (b) reviewed the performance of the Chairperson of the Company and (c) assessed the quality, quantity and timeliness of flow of information between the company management and the Board. All the Independent Directors except Dr. V.L. Moorthy as on 14.02.2015 attended the meeting.

A structured questionnaire was prepared after taking into consideration various parameters such as attendance and participation in meetings, monitoring corporate governance practices, independence of judgment, safeguarding the interests of the company etc., and accordingly, the evaluation was made. The Members of the Committee evaluated the non-Independent directors.

The Independent Directors decided that since the performance of the Non-Independent Directors (including Managing Director and Whole time Director) is excellent, the term of their appointment be continued.

The Independent Directors after review of the performance of the Chairperson decided that the Chairperson has good experience, knowledge and understanding of the Board's functioning and his performance is excellent. The Independent Directors decided that the information flow between the Company's Management and the Board is excellent.

(c) Evaluation by Board: The Board has carried out the annual performance evaluation of its own performance, the Directors individually (excluding the director being evaluated) as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, effectiveness in developing Corporate governance structure to fulfill its responsibilities, execution and performance of specific duties etc. The Board decided that the performance of individual directors, its own performance and working of the committees is excellent.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

SUBSIDIARIES COMPANIES, ASSOCIATES AND JOINT VENTURES:

The Company has six subsidiary companies (including step down subsidiaries) as on 31st March, 2015 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 the financial statements of the subsidiary Companies/ Associate Companies/Joint Ventures is prepared in Form AOC-1 are given in Annexure- II.

The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept opened for inspection by any member at the Registered office of the Company and that of the respective subsidiary companies.

The company has adopted the policy for determining 'material' subsidiaries and the same has been placed on the website of the company at http://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 the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report in- Annexure III.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

STATUTORY AUDITORS AND THEIR REPORT:

The Auditors, M/s. M O S & Associates LLP, Chartered Accountants, Hyderabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment 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 their reappointment based on the recommendation of the Audit Committee to the members for their approval at the forthcoming Annual general meeting for a term of one year till the conclusion of the next AGM.

The Auditors Report to the members of the Company on the financial statements for the Financial Statements for the financial Year ended 31st March 2015 forming part of this report does not contain any Qualifications(s) or adverse observations.

SECRETARIAL AUDIT:

As per the provisions of the Section 204(1) of the Companies Act, 2013, the Company has appointed Mr. Y. Koteswara Rao, Practising Company Secretary to conduct Secretarial Audit of the records and documents of the Company The Secretarial Audit Report for the Financial Year ended 31st March, 2015 in Form No MR-3 is annexed to the Directors Report - Annexure - IV and forms part of this Report. The Secretarial Auditors' Report to the Members of the Company for the Financial Year ended March 31, 2015 does not contain any qualification(s) or adverse observations

DISCLOSURES:

a) Deposits

Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013

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 activity is not applicable to the Company.

c) R & D Technology absorption

The Company main line of activity is civil construction and hence R &D and technology absorption is not applicable to the Company.

d) Foreign exchange earnings - NIL

e) Foreign exchange outgo

Sr No Nature of Payment Amount in Rs. Lacs

1 Foreign Travel 15.38

2 Repayment of ECB Loan 577.55

3 Repayment of ECB Interest 1599.81

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company's policies and internal financial controls laid down by the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Also, pursuant to Clause 32 of the Listing Agreement, the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

MANAGEMENT DISCUSSION & ANALYSIS:

Management Discussion and Analysis Report is annexed which forms part of this Report as Annexure – V.

RISK MANAGEMENT POLICY:

The Company has been addressing various risks impacting the Company and developed risk policy and procedures to inform Board members about the risk assessment and minimization procedures.

WHISTLE BLOWER POLICY/VIGIL MECHANISM:

Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant to the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Company has established a mechanism through which all the stakeholders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle Blower Policy which has been approved by the Board of Directors of the Company has been hosted on the 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 (PREVENTION, PROHIBITION 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, the Company 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 Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-VI of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.The policy is available on the website of the Company at http://www.gayatri.co.in/Investors/Corporate Governance/Policies.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered during the financial year were in the ordinary course of the business of the Company and were on arm's length basis. There were no materially significant related party transactions entered by the Company during the year with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company. The policy on dealing with Related Party Transactions are disseminated on the website of the company at http://www.gayatri.co.in/Investors/ Corporate Governance/Policies.

FIXED DEPOSITS

Your Company has not accepted or renewed any deposit from public during the year under review.

COST AUDIT:

M/s N.S.V. KRISHNA RAO & Co. Cost Auditors were appointed as cost auditor to audit the cost records of the Company for the F. Y 2014-15 and re-appointed for the Financial Year 2015-16.

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 (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company

The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with 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 2015-2016 to NSE and BSE where the Company's Shares are listed.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report (Annexure -VIII). Certificate from the Practicing Company Secretary of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

ACKNOWLEDGEMENT:

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders – clients, financial institutions, Banks, Central and State Governments, the Companies' valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Yours Directors recognize and appreciate the efforts and hard work of all the employees of 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

Place : Hyderabad (P. SREEDHAR BABU) (I.V. LAKSHMI)

Date : 3rd September, 2015 Chief Financial Officer Company Secretary & Compliance Officer


Mar 31, 2014

The Members

We have great pleasure in presenting the 25th Annual Report together with the Audited Statements of Accounts for the Financial Year ended March 31,2014.

FINANCIAL RESULTS

The financial performance of your Company on both a stand-alone and a consolidated basis for the year ended March 31, 2014 is summarized below:

Rs.in Lakhs Standalone Consolidated

PARTICULARS 2013-14 2012-13 2013-14 2012-13

Gross Income 1,81,501.85 2,02,467.84 1,59,996.27 1,97,988.28

Profit before interest, depreciation and tax 27,217.96 26,852.70 33,680.49 41,369.90

Less : Interest and financial charges 15,972.69 13,522.98 26,862.37 27,045.47

Profit before depreciation 11,245.27 13,329.72 6,818.12 14,324.43

Less : Depreciation 2,997.75 3,128.64 11,108.91 11,173.16

Profit before tax 8,247.52 10,201.08 (4,290.79) 3,151.27

Provision for tax 3,486.79 3,892.17 (3,464.64) (3,843.15)

Profit after tax 4,760.73 6,308.91 (7,755.43) (691.88)

Less : Minority Interest - 1,258.78 1,646.49

Profit after Prior Period Adjustments 4,760.73 6,308.91 (6,496.65) 954.61

Profit brought forward 23,176.58 18,921.59 12,097.85 13,187.08

Other Adjustments - - (0.85) 9.72

Profit available for appropriation 27,937.31 25,230.50 5,600.36 14,151.77

Appropriations:

Dividend & Dividend Tax 707.28 1,053.92 707.28 1,053.92

Transfer to Debenture Redemption Reserve - - - -

Transfer to General Reserve 500.00 1,000.00 500.00 1,000.00

Balance carried forward 26,730.03 23,176.58 4,393.08 12,097.85

Paid-up capital 3,022.70 3,022.70 3,022.70 3,022.70

Reserves and Surplus 63,573.62 59,520.17 60,716.21 63,757.01

OPERATIONS REVIEW

Your Company has an comfortable order book of Rs. 7273.45 Crores as on 31st March 2014 but translation of the order book into revenues is remains a challenge due to delays in obtaining statutory clearances, land acquisition, indecision making by authorities and delay in settlement of disputes and claims. The finance cost of the company is gone-up due stretched working capital cycles and additional loans borrowed. The input cost of raw materials has gone-up due to delays in the projects execution. The above factors have pulled down the profit margins of the company. Despite the unfavorable economic conditions, the company has achieved a turnover of Rs. 1812.53 Crores in FY 2014, which is lower by 10% as compared to previous year. The PAT margins are reduced to 2.62% in FY 2014 from 3.12% in FY 2013 mainly due higher interest cost and material cost

Your Directors are pleased to inform that during the year under report, the Company has secured orders of Rs. 443.71 crores including the following major contracts.

- Construction of Railway Formation for Tata Steel Ltd., Kalinganagar - Rs. 275.86 Crores

- Modernization of Yeluru Irrigation and Drainage System - Rs. 103.79 Crores

- Construction of Kudri Barrage Project - Rs. 43.28 Crores

The Company has promoted 8 Road Projects out of which 6 road projects are completed and annuity/tolls are being collected and 2 are under execution. The Company has promoted 2 coal based thermal power projects of 1320 MW each, out of which one project is likely to achieve COD in the current financial year and the other one in coming financial year.

FUTURE OUTLOOK

Construction is one of the core sectors of IndiaRs.s economy and the revival of this sector is crucial for over all development of the economy. The newly formed stable government at the center will boost the economy with a greater emphasis on the progress of the reform of infrastructure and investment. The new central government has set the target of developing 1000 km of expressways, developing 8,737 km of roads, including 3,846 km of national highways, in the North East , four-laning 20, 000 km of national highways and widening 20,000 km of national highways to two lanes. In the policy front the Central Government has permitted 100% FDI under the automatic route for all road development projects. In short term the execution challenges are expected to persist and the revenue growth rates continue to remain muted. In long run the construction sector will have positive outlook. Your company having execution capabilities, trained manpower, healthy order book and other resources is in more advantageous position than peers.

Thermal Powertech Corporation India Ltd (TPCL), is the first coal based thermal power project of 1320 MW promoted by the company which is expected to start commercial operation during FY 2015 and the second power project of 1320 MW is under implementation. The company promoted BOT road projects are started giving revenue and the revenue are likely to improve in future with the accelerated growth of economy.On the whole the profits and cash flows of the company is expected to improve in near future.

DIVIDEND

Directors are pleased to recommend a dividend of Rs. 2.00 per equity share (20%) of the face value of Rs. 10/- for the period ended 31st March, 2014.

The dividend, subject to approval at the AGM on 29thday of September, 2014, will be paid to the shareholders, whose names appear on the Register of Members on 23rd September, 2014.

RESERVES

It is proposed to transfer Rs.500.00 Lakhs to the General Reserves of the Company from the current year profits. TRANSFER OF UNPAID/ UNCLAIMED REFUND AMOUNT OF IPO TO IEPF

Pursuant to provisions of Section 205(A)(5) of the Companies Act 1956, the amount of refund of IPO, which remain unpaid/ unclaimed for the period of seven years has been transferred by the Company to the Investor Education Provident Fund(IEPF), established by the Central Government, pursuant to Section 205(C) of the said Act.

SUBSIDIARY COMPANIES

Your Company has seven subsidiary companies (including step down subsidiaries) as on 31st March, 2014 as per the Companies Act, 1956.

The company''s step down subsidiary, M/s. Thermal Powertech Corporation India Limited''s status has been changed to non- subsidiary (Associate) due to change in subsidiary definition as per the Companies Act, 2013 which is effective from 01.04.2014.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

DIRECTORS

Shri. G. Siva Kumar Reddy and Dr. VL. Moorthy, Directors retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate on Corporate Governance are annexed to this report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management discussions and analysis report is given separately and forms part of this Annual Report.

LISTING AT STOCK EXCHANGES

The Equity shares of the Company are listed in "BSE" (BOMBAY STOCK EXCHANGE LIMITED) and "NSE" (NATIONAL STOCK EXCHANGE INDIA LIMITED) and Non Convertible Debentures issued on Private placement are continued to be listed on The Bombay Stock Exchange Ltd.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures ;

ii) The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the financial year ended on that date.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

AUDITORS

The Auditors M/s. MOS & Associates, Chartered Accountants will retire at the conclusion of the ensuing Annual General Meeting. They have signified their willingness to accept re-appointment and have further confirmed their eligibility under Section 141 of the Companies Act, 2013.

STATUTORY INFORMATION

Particulars of Employees

Details in respect of remuneration to employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended are not furnished since no employee of the Company, except Executive Directors falls within the remuneration limits provided under the said section and rules.

Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo

Information relating to Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 is not applicable for the company. The particular of expenditure and earnings in Foreign Currency is furnished in Notes to Accounts.

AUDITORS'' REPORT

Management Observation on Auditors Observations:

Joint Venture Losses:

The response of the Directors to the comments of the Auditors in their report on Financial Statements is as under:

The IJM-Gayatri Joint Venture losses are not considered in the books of your company in view of the various claims made on the employer for their contractual failures by the joint ventures and the losses which are primarily attributed to such failures are likely to be decided in favor of the joint venture. The JV has raised claims in excess of Rs.300 Crores on the National Highways Authority of India and Andhra Pradesh State Government, which are pending for consideration before the appropriate legal forum.

Present Status of Claims:

a) The amount of claims awarded in favor of the joint venture is Rs.64.82 crores ( including interest of Rs.34.46 Crores) out of which Rs.18.78 crores payment received.

b) The amount of claims which are under adjudication are Rs.274.19 crores.

The management is confident to recovering substantial amount of claims. The management is of theopinion that the excess expenditure is expected to flow back through future cash flows on settlement of the claims by the employer. In the unlikely situation of not awarding the entire amount of claims, GPL has to provide an amount of Rs.46.30 crores towards its share of 40% in the IJM-Gayatri Joint Venture.

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established.

CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors was formed to recommend (a) the policy on Corporate SocialResponsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors.

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the employees of all cadres for their dedicated services to the Company, and expects continued support, higher level of productivity for achieving the targets set for the future.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers , Banks and Financial Institutions, Government at Centre and State and Shareholders. Your Board would like to place on record, its sincere appreciation all the sub contractors, consultants, clients and employees for having played a very significant part in the Company''s operations till date.

For and on behalf of the Board

Place: Hyderabad T. INDIRA SUBBARAMI REDDY T. V. SANDEEP KUMAR REDDY

Date: 29th May 2014. Chairperson Managing Director


Mar 31, 2012

The Members,We have great pleasure in presenting the 23nd Annual Report together with the Audited Statements of Accounts for the Financial Year ended March 31, 2012. For your Company this has been a truly remarkable year and your company has achieved many milestones and initiated new ventures.

FINANCIAL RESULTS

The financial performance of your Company on both a stand-alone and a consolidated basis for the year ended March 31, 2012 is summarized below:

Rs. in Lakhs

PARTICULARS Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Gross Income 180523.75 1,44,619.33 2,20,593.74 1,21,606.52

Profit before interest, depre ciation and tax 20,327.05 17,626.84 31,822.41 22,804.79

Less : Interest and financial charges 10,437.38 7,418.49 22,072.24 11,730.14

Profit before depreciation 9,889.67 10,208.35 9,749.90 11,074.65

Less : Depreciation 2,905.68 2,273.28 8,208.89 6,232.23

Profit before tax 6,983.99 7,935.07 1,541.01 4,842.42

Provision for tax 2,386.87 2,935.06 2,355.13 3,085.14

Profit after tax 4,597.12 5,000.01 (814.12) 1,757.28

Less : Minority Interest - - 1,371.15 1,475.22

Profit after Prior Period Adjustments 4,597.12 5,000.01 557.03 3,232.50

Profit brought forward 16,060.16 13,869.88 14,400.94 13,978.17

Other Adjustments - - (34.83) -

Profit available for appropriation 20,657.28 18,869.89 14,923.14 17,210.67

Appropriations:

Dividend & Dividend Tax 835.69 709.73 835.69 709.73

Transfer to Debenture Redemption Reserve - 1,300.00 - 1,300.00

Transfer to General Reserve 900.00 800.00 900.00 800.00

Balance carried forward 18,921.59 16,060.16 13,187.08 14,400.94

Paid-up capital 2,396.82 1,198.90 2,396.82 1,198.90

Reserves and Surplus 49,225.36 32,596.98 57,988.84 45,435.38

REVIEW OF OPERATIONS:

The financial year 2011-12 was a challenging year and almost all Country's including India are facing the fear of slowdown in the growth. The uncertainty about demand conditions, and increasing in interest rates, slowdown decision making in various crucial areas and weakling of rupee are contributing for subdued growth rate and also less favorable condition for investment. In this challenging year, your Company has performed reasonably well and grew its revenue by 25%. The EBIDTA margins have registered at 17.26% as against 13.45% in the previous year. The company has make provision of Rs.79.23 crores for the foreign exchange translation loss on the FCCB Bonds and an account of this PAT margins have decreased to 2.55%.

Your Directors are pleased to inform that all projects under taken by the Company are progressing as per schedule except few works where there has been a delay in handing over of the site by the client. In all such cases, your company has got extension of time from the employer.

The Order Book position of your company is strong at Rs.7,809.99 crores as on 31st March, 2012 with a revenue visibility over next four years. The sector wise breakup is as under:

Sl. No. Particulars Orders on Hand % Rs. in Crores

1 Irrigation Division 3457.29 44.27

2 Roads Division 1978.97 25.34

3 Power Transmission 248.26 3.18

4 Industrial Works 2125.47 27.21

TOTAL 7809.99 100.00

FUTURE OUTLOOK

Despite the continued unfavorable macroeconomic environment, Construction Sector is expected to show some improvement compared to last year as evidenced by the recent increase in the output of steel and cement. The projected GDP growth of construction industry is 6.5 percent as against 5.3 percent in previous year. The biggest driver for construction is the infrastructure sector. Investments in the Twelfth Plan are expected to be roughly double the investments in the Eleventh Plan. For the Twelfth Plan, the estimated investment in infrastructure is expected to increase to Rs.

40,992.4 billion. This huge investment in infrastructure, coupled with recovery in the residential segment of the real estate market, is expected to drive the construction industry in the next few years. It can be said that for the next six years (20II-I2 to 20I6-I7) the demand for the construction industry will be quite significant. In value terms, the expected size of this industry by 20I6-I7 will be quite significant. As an existing leading player and experienced infrastructure developer, your Company will have direct advantage in the challenging scenario.

DIVIDEND

Directors are pleased to recommend a dividend of Rs.3/- per equity share of the face value of Rs. 10/- for the period ended 31a March 2012.

The dividend, subject to approval at the AGM on 20th of September, 2012, will be paid to the shareholders whose names appear on the Register of Members with reference to the book closure from Friday 14th September, 2012 to Thursday 20th September, 2012 (inclusive of both dates).

RESERVES

It is proposed to transfer Rs.900Lakhs to the General Reserves of the Company from the current year's profits.

SUBSIDIARY COMPANIES

During the year under review your company has incorporated M/s. Sai Maharini Toll ways Limited has wholly owned subsidiary of the company.

With effect from I3th of March, 2012, HKR Roadways Limited is not a subsidiary of our Company pursuant to acquisition of shares by other shareholders in HKR Road Ways Limited.

With effect from November 29, 2011, Bhandara Thermal Power Corporation Limited has become a step down subsidiary of your Company pursuant to Gayatri Energy Ventures Private Limited having acquired 98.99% of the equity share capital thereof.

Your Company has seven subsidiary companies (including step down subsidiaries) as on 31st March 2012 as per the Companies Act, 1956.

CONSOLIDATION OF ACCOUNTS

In accordance with the Accounting Standard -21 on Consolidated Financial Statements read with Accounting Standard - 23 & 27 on Accounting for Investments in Associates in Consolidated Financial Statements and Financial Reporting of Interests in Joint Ventures, Consolidated Financial Statements are prepared considering the combined profits net of losses of all the subsidiaries, joint ventures and after eliminating intra group transactions, unrealized profits and balances.

Your Directors have pleasure in attaching the Consolidated Financial Statements presented by your Company which form part of the Annual Report and Accounts.

DIRECTORS

Smt. T. Indira Subbarami Reddy and Sri Ch. Hari Vittal Rao, Directors retire at the ensuing AGM and being eligible offer themselves for reappointment.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate on Corporate Governance are annexed to this report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management discussions and analysis report is given separately and forms part of this Annual Report.

LISTING AT STOCK EXCHANGES

The Equity shares of the Company are listed in "BSE"(BOMBAY STOCK EXCHANGE LIMITED) and "NSE" (NATIONAL STOCK EXCHANGE OF INDIA LIMITED), Non Convertible Debentures issued on Private placement are continued to be listed on The Bombay Stock Exchange Limited and Foreign Currency Convertible Bonds (FCCB's) are listed on the Singapore Stock Exchange Limited.

RIGHTS ISSUE

During the year under review your company has raised Rs. 143.86 Crores through the Rights issue, by issue of 11979242 equity shares of Rs.10/- each at a premium of Rs. 110/- to the existing shareholders on right basis. The aforesaid shares allotted under rights issue start traded on the Bombay Stock Exchange and National Stock Exchange w.e.f 29th of March, 2012.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures ;

ii) the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the financial year ended on that date.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The Directors have prepared the annual accounts of the Company on a 'going concern' basis.

AUDITORS

The Auditors M/s. C.B. Mouli& Associates, Chartered Accountants, Secunderabad will retire at the conclusion of the ensuing Annual General Meeting. They have signified their willingness to accept re-appointment and have further confirmed their eligibility under Section 224 (I-B) of the Companies Act, 1956.

STATUTORY INFORMATION

Particulars of Employees

Details in respect of remuneration to employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended are not furnished since no employee of the Company, except Executive Directors falls within the remuneration limits provided under the said section and rules.

Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo

Information relating to Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 is not applicable for the company. The particular of expenditure and earnings in Foreign Currency is furnished in Notes to Accounts.

AUDITORS' REPORT

Management Observation on Auditors Observations:

Joint Venture Losses:

The response of the Directors to the comments of the Auditors in their report on Financial Statements is as under:

The IJM-Gayatri Joint Venture losses are not considered in the books of your company because of the various claims made on the employer for their contractual failures by the joint ventures and the losses which are primarily attributed to such failures are likely to be decided in favor of the joint venture. The management is of the firm opinion that the excess expenditure is expected to flow back through future cash flows on settlement of the claims by the employer. There is substantial progress in the proceedings in the arbitration and the management is reasonably confident of recovery of these claims in near future. In the unlikely situation of not awarding the entire amount of claims, GPL has to provide an amount of Rs 53.78 crores towards its share of 40% in the IJM-Gayatri Joint Venture.

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the employees of all cadres for their dedicated services to the Company, and expects continued support, higher level of productivity for achieving the targets set for the future.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the confidence reposed and continued support extended by its customers, suppliers , Banks and Financial Institutions, Government at centre and state and shareholders. Your Board would like to place on record, its sincere appreciation all the sub contractors, consultants, clients and employees for having played a very significant part in the Company's operations till date.

For and on behalf of the Board

Place : Hyderabad T. INDIRA SUBBARAMI REDDY T. V. SANDEEP KUMAR REDDY

Date : 30th May, 2012. Chairperson Managing Director

 
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