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Notes to Accounts of Gayatri Projects Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Gayatri Projects Limited founded in 1989 is one of India's premier infrastructure company based in Hyderabad executing major civil works including Roads, Canals, Airport Runways, Ports/Harbors, Dams & Reservoirs, Railways etc., across India.

2.1 Leases

Disclosure under Accounting Standard – 19 "Leases", issued by the Institute of Chartered Accountants of India.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease rentals under operating leases are recognized in the statement of profit and loss on a straight-line basis. The Company has taken various residential/godown/office premises (including Furniture and Fittings if any) under lease and license agreements for periods which generally range between 11 months to 3 years. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in Profit and Loss Account under Rent, Rates and Taxes.

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognized for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

The Company has taken vehicles on financial lease from banks / Financial Institutions. The details of contractual payments under the agreement are as follows:

2.2 Contingent Liabilities and Commitments

The details of the Contingent Liabilities and Commitments to the extent not provided are as follows:

a. Contingent Liabilities Rs. in Lakhs

Particulars As at As at 31st March, 2015 31st March, 2014

a) Claims against the company not 5,565.55 5,565.55 acknowledged as debt *

b) Guarantees given by the Banks towards performance & Contractual Commitments

i) issued on behalf of the Company 47,097.06 51,639.03

ii) Issued on behalf of subsidiaries/ group companies 30,442.35 30,630.36

c) Corporate Guarantees given to group companies 8,38,456.00 7,48,110.00

d) Disputed Liability of Income Tax, Sales Tax, 14,617.34 10,603.75 Service Tax and Seigniorage charges

* Some of the contractees /employer have made claims against company for which the company has preferred appeal and in the opinion of the management the award will be in favour of the company. Therefore the said claims have not been provided.

2.3 Impairment of Assets

In the opinion of the management, there are no impaired assets requiring provision for impairment loss as per the accounting standard 28 on Impairment of assets. The recoverable amount of building, plant and machinery and computers has been determined on the basis of 'Value in use' method.

2.4 Joint Venture Losses

IJM-Gayatri Joint Venture

IJM – Gayatri Joint Venture is a joint venture in which IJM Corporation Berhad, Malaysia holds 60% and Gayatri Projects Limited holds 40% share. The Joint venture has executed road works during the period 1998-2006 in Package I, II & III and AP 13 of NHAI, APSH 7 and APSH 8 in the State of Andhra Pradesh.

An excess expenditure of Rs. 134.45 crores is incurred for completion of the IJM Gayatri JV by our company and the same is debited to the JV account. The JV has not accounted the same due to pending claims with the employers and with an intention to account the same as and when the claims are actually realized.

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.

During the previous year, SEBI has referred the above matter to "Financial Reporting and Review Board (FRRB)" for further examination. As per the Directions of the FRRB the company has provided an amount of Rs.45.01 Crores (included in work expenditure) towards its 40% share of loss in the joint venture which was hitherto been the subject matter of qualification in the Auditors Report till previous year.

2.5 Disclosure pursuant to Accounting Standard (AS) – 15(Revised) "Employee's Benefits":

i) The summarized position of Post-employment benefits and long term employee benefits recognized in the statement of Profit & Loss and Balance Sheet as required in accordance with Accounting Standard – 15 (Revised) issued by the Institute of Chartered Accountants of India are as under:-

2.6 Segment Reporting

The Company's operations predominantly consist of construction / project activities. Hence there are no reportable segments under Accounting Standard – 17. During the year under report, the Company's business has been carried out only in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

2.7 Managerial Remuneration:

The excess managerial remuneration paid/payable for the year will be recovered in the subsequent financial year.

2.8 Dues to Micro and Small Enterprises:

On the basis of information available with the Company, there are no dues outstanding for more than 45 days to Small Scale Industrial Undertaking (SSI). The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

2.9 There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 31- 03-2015 and amounts which are required to be transferred to such funds have been transferred.

2.10 Bilateral Restructuring of Debt under Joint Lenders Forum (JLF) Scheme

Due to liquidity constraints on account of stretched working capital cycles, increased cost of inputs, higher interest cost, slowdown in Infrastructure sector etc, which has led to a strain on the resulting cash flows of the Company. Keeping in view of the above the Company has restructured its debt obligations under bilateral restructuring route monitored by the Joint Lenders forum (JLF). The scheme was approved by the lenders on 19.01.2015 and the relevant agreements like MRA, TRA etc., were executed on 23.01.2015. The restructuring is effected from 1st July 2014. Pursuant to this scheme, some of the Long Term and Short Term Loans have been rescheduled along with reduced rate of interest.

2.11 Unsecured Loans from the Directors

As a part of the restructuring package, the promoters contribution amounting to Rs.3300.00 lakhs is brought in by promoter directors. The company is planning to raise the money through equity route and promoters have option to take refund of the unsecured loan from the equity proceeds.

2.13 Long term Loans and Advances

During the previous years,the Company has given advances to its subcontractors for execution of various projects. The recovery of advances is delayed due to slow progress of the works on account of changes in government policy and bifurcation of the State. In view of this, the parties have mutually decided to convert the advance as interest bearing loans carrying an interest equivalent to the bank deposit rate. Such loans during the current year have been grouped under "Long term loans & Advances". The advances will be recovered in future from the bill proceeds.

2.14 Receivables from Related Parties

Other Non Current Assets include an amount of Rs.218.51 crores receivable from Gayatri Hi-tech Hotels Ltd (GHHL), a related party of the Company. The Company has executed the hotel project of the GHHL under EPC scheme and the amount represents the balance receivables. GHHL has expressed its inability to pay dues immediately due to its liquidity constraints and has placed a proposal to convert the outstanding dues into 9% Cumulative Redeemable Preference Shares (CRPS) of Rs.1,000/- each. The Company has agreed in-principal for conversion of outstanding into CRPS and necessary statutory formalities are yet to be completed.

2.15 Advances to sub-contractors include amounts paid as work advances to certain sub-contractors wherein the corresponding contract works are yet to commence. In the opinion of the management, the said contract works have not commenced due to certain extraneous factors beyond the control of such sub-contractor and without any default/failure of performance from their end. The management is confident to commence the works in near future and recover the advances from the sub-contractors.

2.16 Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in respect of certain assets as disclosed in Accounting Policy on Depreciation and Amortization. The net value of Fixed Assets amounting to Rs. 294.28 Lakhs whose lives have expired as at 1st April 2014,of which Rs. 194.25 Lakhs (net of Deferred Tax of Rs. 100.03 lakhs) has been adjusted in the opening balance of Profit and Loss.

2.17 In the opinion of the management and to the best of their knowledge and belief, the value under the head of current assets are approximately of the value stated, if realized in ordinary course of business, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

2.18 The balances under Other Long Term Liabilities, Trade Payables, Trade Receivables, Other Current Liabilities, Long Term Loans and Advances, Short Term Loans and Advances and Other Current Assets are subject to reconciliation and confirmation.

2.19 All amounts are rounded off to nearest thousand.

2.20 Previous year figures have been regrouped wherever considered necessary.


Mar 31, 2014

1. CORPORATE INFORMATION

Gayatri Projects Limited incorporated in 1989 is one of India''s premier infrastructure company based in Hyderabad executing major civil works including Roads, Canals, Airport Runways, Ports/Harbors, Dams & Reservoirs, Railways etc.

1.2 Contingent Liabilities and Commitments

The details of the Contingent Liabilities and Commitments to the extent not provided is as follows:

a. Contingent Liabilities

Rs. in Lakhs

Particulars As at As at 31st March 2014 31st March 2013

a) Claims against the company not acknowledged as debt 5,565.55 —

b) Guarantees given by the Banks towards performance & Contractual Commitments

i) issued on behalf of the Company 51,639.03 48,578.60

ii) Issued on behalf of Subsidiaries / Group Companies 30,630.36 24,034.76

c) Corporate Guarantees given to group companies 7,48,110.00 5,77,060.00

d) Disputed Liability of Income Tax, Sales Tax, Service Tax and Seigniorage charges 10,603.75 8,752.06

1.3 Impairment of Assets

In the opinion of the management, there are no impaired assets requiring provision for impairment loss as per the accounting standard 28 on Impairment of assets. The recoverable amount of building, plant and machinery and computers has been determined on the basis of ''Value in use'' method.

1.4 Joint Venture Loss not considered IJM-Gayatri Joint Venture

IJM - Gayatri Joint Venture is a joint venture in which IJM Corporation Berhad, Malaysia holds 60% and Gayatri Projects Limited holds 40% share. The Joint venture has executed road works during the period 1998-2006 in Package I, II & III and AP 13 of NHAI, APSH 7 and APSH 8 in the State of Andhra Pradesh.

An excess expenditure of Rs. 134.45 crores is incurred for completion of the IJM Gayatri JV by our company and the same is debited to the JV account. The JV has not accounted the same due to pending claims with the employers and with an intention to account the same as and when the claims are actually realised.

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. So far the joint venture has got favorable awards amounting to Rs. 61.99 crores including interest on claims and the remaining claims are under adjudication. Out of the favorable awards, the JV has received orders for release of payments for Rs. 29.01 crores and as against this the JV has received Rs. 18.70 crores which ispassed to the Company. Further in respect of APSH-7 and 8, the honorable High Court of Andhra Pradesh has order to release 50% of the claim amount (about Rs. 3.00 crores) and the release of payment is under process. The management is reasonably confident of recovering substantial amount from these claims. In the unlikely situation of the claims not being received to the extent of expenditure incurred, IJM-Gayatri Joint Venture has to account the net expenditure of Rs. 115.75 crores (Previous Year Rs. 115.75 crores) in its books and the Company has to provide an amount of Rs. 46.30 crores (Previous Year Rs. 46.30 crores) towards its 40% share of loss in the joint venture.

During the year under review, SEBI has referred the above note to the "Financial Reporting and Review Board (FRRB)" for further examination and company has submitted the relevant information/explanation to the competent authorities. The matter is under examination with the FRRB.

1.5 Disclosure pursuant to Accounting Standard (AS) - l5(Revised) "Employee''s Benefits":

i) The summarized position of Post-employment benefits and long term employee benefits recognized in the statement of Profit & Loss and Balance Sheet as required in accordance with Accounting Standard - 15 (Revised) issued by the Institute of Chartered Accountants of India are as under:-

1.6 Segment Reporting

The Company''s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Accounting Standard - 17. During the year under report, the Company''s business has been carried out only in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

1.7 Earnings Per Share (EPS)

Basic and Diluted Earnings per share calculated in accordance with Accounting Standard (AS) 20 "Earning per share".

1.8 Dues to Micro and Small Enterprises:

On the basis of information available with the Company, there are no dues outstanding for more than 45 days to Small Scale Industrial Undertaking (SSI). The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the yearend together with interest paid/payable as required under the said Act have not been given.

1.9 There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 31-03-2014.

1.10 Advances to sub-contractors include amounts paid as work advances to certain sub-contractors wherein the corresponding contract works are yet to commence. In the opinion of the management, the said contract works have not commenced due to certain extraneous factors beyond the control of such sub-contractor and without any default/failure of performance from their end. The management is confident to commence the works in near future and recover the advances from the sub-contractors.

1.11 In the opinion of the management and to the best of their knowledge and belief, the value under the head of current assets are approximately of the value stated, if realized in ordinary course of business, unless stated otherwise. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

1.12 The balances under Other long term liabilities, Trade Payables, Trade Receivables, Other current liabilities, Short term loans and advances and Other current assets are subject to reconciliation and confirmation.

1.13 All amounts are rounded off to nearest thousand.

1.14 Previous year figures have been regrouped wherever considered necessary.


Mar 31, 2013

1. CORPORATE INFORMATION

Gayatri Projects Limited founded in I989 is one of India''s premier infrastructure company based in Hyderabad executing major civil works including Roads, Canals, Airport Runways, Ports/Harbors, Dams & Reservoirs, Railways etc.

2. LEASES

Disclosure under Accounting Standard - I9 "Leases", issued by the Institute of Chartered Accountants of India. The Company has taken various residential/godown/office premises (including Furniture and Fittings if any) under lease and license agreements for periods which generally range between II months to 3 years. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in Profit and Loss Account under Rent, Rates and Taxes.

The Company has taken vehicles on financial lease from banks / Financial Institutions. The details of contractual payments under the agreement are as follows:

3. Impairment of Assets

In the opinion of the management, there are no impaired assets requiring provision for impairment loss as per the accounting standard 28 on Impairment of assets. The recoverable amount of building, plant and machinery and computers has been determined on the basis of ''Value in use'' method.

4. Joint Venture Losses not considered

IJM-Gayatri Joint Venture

IJM - Gayatri Joint Venture is a joint venture in which IJM Corporation Berhad, Malaysia holds 60% and Gayatri Projects Limited holds 40% share. The Joint venture has executed road works during the period I998-2006 in Package I, II & III and AP I3 of NHAI, APSH 7 and APSH 8 in the State of Andhra Pradesh.

An excess expenditure of Rs. I34.45 crores was incurred for completion of the IJM Gayatri JV by the company and debited to the JV account. The JV has not accounted the same due to pending claims with the employers and with an intention to account the same as and when the claims are actually realised.

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. So far the joint venture has got favorable awards amounting to Rs. 6I.99 crores including interest on claims and the remaining claims are under adjudication. Out of the favorable awards, the JV has received orders for release of payments for Rs. 29.0I crores and as against this the JV has received Rs. I8.70 crores during the year which was passed on to the Company. The management is reasonably confident of recovering substantial amount from these claims. In the unlikely situation of the claims not being received to the extent of expenditure incurred, IJM-Gayatri Joint Venture has to account the net expenditure of Rs. II5.75 crores (Previous Year Rs. I34.45 crores) in its books and the Company has to provide an amount of Rs. 46.30 crores (Previous Year Rs. 53.78 crores) towards its 40% share of loss in the joint venture.

5. Disclosure pursuant to Accounting Standard (AS) - l5(Revised) "Employee''s Benefits":

i) The summarized position of Post-employment benefits and long term employee benefits recognized in the statement of Profit & Loss and Balance Sheet as required in accordance with Accounting Standard - I5 (Revised) issued by the Institute of Chartered Accountants of India are as under:-

6. Segment Reporting

The Company''s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Accounting Standard - I7. During the year under report, the Company''s business has been carried out only in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

7. Dues to Micro and Small Enterprises:

On the basis of information available with the Company, there are no dues outstanding for more than 45 days to Small Scale Industrial Undertaking (SSI). The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year ended together with interest paid/payable as required under the said Act have not been given.

8. There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 3Ist March, 20I3.

9. All amounts are rounded off to nearest thousand.


Mar 31, 2012

Note:

1 Cash and Cash Equivalents consist of Cash on hand and balances with Banks that includes Margin Money Deposits for Bank Guarantees of Rs.8076.10 Lakhs (Previous Year Rs.6986.30 Lakhs)

2 The Cash flow statement is prepared in accordance with the indirect method stated in Accounting Standard 3 issued by ICAI on "Cash Flow Statements" and presents Cash flows by Operating, Investing and Financing activities.

3 Figures in brackets represent cash outflows.

4 See accompanying Notes forming part of the Financial Statements.

1. CORPORATE INFORMATION

Gayatri Projects Limited founded in 1989 is one of India's premier infrastructure company based in Hyderabad executing major civil works including Roads, Canals, Airport Runways, Ports/Harbors, Dams & Reservoirs, Railways etc.

2(a) Details of shares issued during the year:

Pursuant to the resolution passed at the Board of Directors meeting held on 21st January, 2011 and in compliance with the provisions under section 8l(l)(a) of the Companies Act, 1956 and SEBI regulations, the Company has issued 1,19,79,242 equity shares of Rs. 10/- each to the existing shareholders for cash at a premium of Rs. 110/- per equity share in the ratio of one right equity share for every one equity share held on the record date i.e 23rd February 2012.

2 (b) Rights, Preferences and restrictions attached to Equity Shares:

The company has only one class of shares referred to as equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors have recommended dividend of Rs. 3.00 per equity share in their meeting held on 30th May 2012, subjected to approval of the shareholders in the ensuing Annual General Meeting (For the year ended 31st March 2011 : Rs. 5.00 per equity share).

2 (c) The company has utilized the net proceeds of the Right issue for the objectives specified in the Letter of Offer including margin requirement for working capital and general capital purpose.

3.1 The Company had issued 308 Zero Coupon Foreign Currency Convertible Bonds (FCCBs) of Japanese Yen (JPY)

10,000,000 each aggregating to JPY 308,00,00,000 redeemable on 1st August 2012 at 120.414% of its principal amount. The bond holders had an option to convert these bonds into equity shares at an initial conversion price of Rs. 378.35 (reset at Rs. 288/-) per share with a fixed rate of exchange on conversion at Rs. 0.3303 per JPY. Out of the total bonds of 308, 37 bonds were converted into equity, 42 bonds were bought back by the company and remaining 229 bonds were outstanding as at the date of Balance Sheet. The bonds will mature on 3rd August 2012 at 120.414% of its principal amount.

The Company has provided an amount of Rs. 6732.60 lakhs towards the foreign exchange transaction loss on the FCCBs as on date and the loss is recognized in the statement of profit and loss for the year 2011-12.

3.2 Nature of Security:

Debentures:

The Company has issued 520 11.50% Secured Redeemable Non-Convertible Debentures (NCDs) of Rs.10,00,000/- each on private placement in the form of Separately Transferable Redeemable Principal Parts (STRPPs) for cash at par aggregating Rs. 5200 Lakhs. The Debentures are secured by the paripassu first charge on the fixed assets of a group company and redeemable in the 3rd, 4th and 5th year in the ratio of 30:30:40 and the earliest date of redemption being 1st December 2013.

Equipment Loans:

The Equipment loans are secured by hypothecation of specific equipments acquired out of the said loans with rate of interest varying from 14.75% to 15.25% per annum.

Vehicle Loans:

The Vehicle loans availed are secured by hypothecation of specific vehicles purchased out of the said with rate of interest varying from 11.16% to 13.48% per annum.

Other Term Loans:

The other secured term loans are secured by hypothecation of construction equipments not specifically charged to other banks with rate of interest varying from 13.00% to 15.50% per annum.

All the above term loans and non convertible debentures are guaranteed by Directors.

3.3 Current maturities of long term borrowings have been disclosed under the head "Other Current Liabilities" (Refer Note- 11).

4.1 Nature of security and terms of repayment:

Equipment Loans (Secured)

- The equipments loans are secured by hypothecation of specific equipments acquired out of the said loans.

- The equipment loans are repayable in monthly installments.

- The equipment loans are guaranteed by Directors.

- There are no defaults in repayment of loans and interest on the Balance Sheet date.

- The applicable rate of interest is 14.10% per annum.

Term Loans (Secured)

The Secured Loans availed are secured by Hypothecation of Unencumbered fixed assets and project specific stock and receivables. The applicable rate of interest is 14.10% per annum.

Working Capital Loans (Secured)

The working capital facilities from the consortium of Banks are secured by:

- Hypothecation against first charge on stocks, book debts and other current assets of the Company both present and future ranking paripassu with consortium banks.

- Hypothecation against first charge on all unencumbered fixed assets of the Company both present and future ranking paripassu with consortium banks.

- Equitable mortgage of properties belonging to promoters, directors, group companies.

- Personal guarantee of promoter directors, group companies/firms and relatives.

- There are no defaults in repayment of loans and interest on the Balance Sheet date.

Ther rate of interest for these facilities range from 12.75% to 15.25% per annum and repayable on demand. Term Loans (Un-secured)

- The other term loans are repayable in monthly installments.

- There are no defaults in repayment of loans and interest on the Balance Sheet date.

- The rate of interest for these loans range from 12.10% to 13.75% per annum

ii) Intangible Assets - Nil

iii) Capital Work in progress

- Capital Work in progress represents Machinery purchased for Rs. II 66.94 Lakhs and yet to be installed.

Note :

- Of these, 12,00,000 Equity shares of Gayatri Infra Ventures Limited have been pledged to IL & FS for the term loan availed by Gayatri Infra Ventures Limited

- Of these, 50,000 Equity shares of Gayatri Energy Ventures Pvt. Ltd. have been pledged to PTC India Limited for the loan availed by Thermal Powertech Corporation India Limited.

- Of these, 13,00,000 Equity shares of Gayatri Energy Ventures Pvt. Ltd. have been pledged to IFCI Limited for the loan availed by Gayatri Energy Venture Pvt. Ltd.

- Of these, 36,995 Equity shares of HKR Roadways Limited have been pledged to IL&FS Trust Company Limited for the loan availed by HKR Roadways Limited.

- Of these, 16,660 Equity shares of Indore Dewas Tollways Limited have been pledged to SBI Capital Security Trustee Company Limited for the Loan availed by Indore Dewas Tollways Limited.

- Of these, 11,58,251 Equity shares of Gayatri Sugars Limited have been pledged to Yes Bank Limited for the loan availed by Gayatri Sugars Limited.

* The principal amount is repayable on demand and there is no repayment schedule.

INVENTORIES

Raw Materials, Construction materials, stores and spares are valued at weighted average cost. Expenditure incurred during the work in progress of contracts up to the stage of completion is carried forward as work-in-progress. Cost includes direct materials, work expenditure, labour cost and appropriate overheads.

* Margin Money Deposits with carrying amount of Rs. 8076.09 Lakhs (Previous year: Rs. 6986.30 Lakhs) are earmarked against Bank Guarantees /LCs taken by the company (or subsidiaries of the company)

* Rs.10.00 Lakhs paid to Statutory Auditors towards Rights Issue certification fee is charged to Rights Issue expenses.

** The exchange translation loss includes (a) exchange difference arising on buy back of 42 FCCB bonds amounting to Rs. 1190.99 lakhs and (b) the currency translation loss of Rs. 6732.60 lakhs (including current year loss of Rs. 3528.89 lakhs) as on 31st March 2012 on the outstanding 229 FCCB bonds of JPY 10,000,000 each.

5. LEASES

Disclosure under Accounting Standard - 19 "Leases", issued by the Institute of Chartered Accountants of India. The Company has taken various residential/ godown/office premises (including Furniture and Fittings if any) under lease and license agreements for periods which generally range between 11 months to 3 years. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in Profit and Loss Account under Rent, Rates and Taxes.

6. Contingent Liabilities and Commitments

The details of the Contingent Liabilities and Commitments to the extent not provided as follows:

Rs.in Lakhs

Particulars As at As at 31st March, 2012 31st March, 2011

Contingent Liabilities

a) Claims against the company not acknowledged as debt

b) Guarantees given by the Banks towards performance & Contractual Commitments

i) issued on behalf of the Company 62,309.96 64,248.69

ii) Issued on behalf of Subsidiaries / Group Companies 16,105.52 27,462.24

c) Other money for which the company is contingently - - liable

d) Disputed Liability of Sales Tax, Service Tax and 1,547.12 1,547.12 Seignior age charges

Commitments

Corporate Guarantees given to group companies 5,64,166.00 5,71,166.00

7. Impairment of Assets

In the opinion of the management, there are no impaired assets requiring provision for impairment loss as per the accounting standard 28 on Impairment of assets. The recoverable amount of building, plant and machinery and computers has been determined on the basis of 'Value in use' method.

8. Joint Venture Loss not considered IJM-Gayatri Joint Venture

The IJM - Gayatri Joint Venture is a joint venture in which IJM Corporation Berhad, Malaysia holds 60% and Gayatri Projects Limited holds 40% share. The Joint venture has executed road works in Package I, II & III and AP 13 of NHAI, APSH 7 and APSH 8 in the State of Andhra Pradesh. The joint venture incurred excess of expenditure over income amounting to Rs 134.45 crores due to several contractual failures on part of the employer.

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 authorities. The joint venture has got favorable awards amounting to Rs.4587.36 lakhs at the arbitration stage and further the JV has got favorable orders amounting to Rs.419.18 Lakhs from the District Court. There is a substantial progress in the proceedings of the claims and the management is reasonably confident of recovery of these claims.

The management has also obtained independent legal opinion from eminent counsel in this regard who have opined on the recoverability of the claims. In view of this, the share of the losses of GPL (40%) in the joint venture is not provided in the books of the Company. 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.

9. Disclosure pursuant to Accounting Standard (AS) - 15(Revised) "Employee's Benefits":

i) The summarized position of Post-employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard - 15 (Revised) issued by the Institute of Chartered Accountants of India are as under:-

10. Segment Reporting

The Company's operations predominantly consist of providing infrastructure facilities.. Hence there are no reportable segments under Accounting Standard - 17. During the year under report, the Company's business has been carried out only in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956

11. There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 31-03-2012.

Since the principal business of the Company is in construction activities, quantitative data as required by Part II Para ii, 4c, 4d of Schedule VI to the Companies Act, 1956 is not furnished.

12. The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

13. Amounts in the financial statements are presented in Rs. lakhs, except for per share data and as otherwise stated.

14. All amounts are rounded off to nearest thousand.

 
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