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Notes to Accounts of Gayatri Projects Ltd.

Mar 31, 2016

ii) Secured Indian Rupee Term Loan from Banks of Rs. 6923.00 Lakhs (31st March, 2015: Rs.7311.00 Lakhs ) of Gayatri Jhansi Roadway Limited (GJRL) is secured by way of (a) Second mortgage and charge of all the borrower’s immovable properties, present and future, (b) Second charge by way of hypothecation of all the movables, including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future, Operating cash flows, book debts and receivables and any other revenues of whatsoever nature and wherever arising, present and future, all intangibles, including but not limited to goodwill, uncalled capital, present and future, (c) Assignment or creation of security interest in all Insurance Contracts/Insurance proceeds, (d) Escrow Account, Debt Service Reserve, other reserves and any other bank accounts of the borrower wherever maintained, (e) pledge of all the shares (equity and preference) held by the sponsors representing 51% of the paid up share capital. The facilities carry annual interest rate ranging from 11.50% to 12.85%(31st March 2015: 11.50% to 12.85% )

iii) Secured Indian Rupee Term Loan from Banks of Rs.11541.00 Lakhs (31st March, 2015: Rs.12288.00 Lakhs ) of Gayatri Lalitpur Roadways Limited (GLRL) is secured by way of (a) first mortgage and charge of all the borrower’s immovable properties, present and future, (b) first charge by way of hypothecation of all the movables, including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future, operating cash flows, book debts and receivables and any other revenues of whatsoever nature and wherever arising, present and future, all intangibles, including but not limited to goodwill, uncalled capital, present and future, (c) Assignment or creation of security interest in all Insurance Contracts/Insurance proceeds, (d) Escrow Account, Debt Service Reserve, other reserves and any other bank accounts of the borrower wherever maintained (e) pledge of all the shares (equity and preference) held by the sponsors representing 51% of the paid up share capital. The facilities carry an annual interest rate of 11.25% (31st March 2015: 11.25%).

iv) Secured Indian Rupee Term Loan from Banks of Rs.7986.00 Lakhs (31st March, 2015: Rs.8487.00 Lakhs ) of GLRL is secured by way of (a) Second mortgage and charge of all the borrower’s immovable properties, present and future, (b) second charge by way of hypothecation of all the movables, including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future, Operating cash flows, book debts and receivables and any other revenues of whatsoever nature and wherever arising, present and future, all intangibles, including but not limited to goodwill, uncalled capital, present and future, (c) assignment or creation of security interest in all Insurance Contracts/Insurance proceeds,

(d) Escrow Account, Debt Service Reserve, other reserves and any other bank accounts of the borrower wherever maintained (e) Pledge of all the shares (equity and preference) held by the sponsors representing 51% of the paid up share capital. The facilities carry an annual interest rate ranging from 11.50% to 12.85% (31 March 2015: 11.50% to 12.85%).

v) Unsecured Rupee Term Loans of Rs.2724.00 Lakhs (31st March 2015: Rs. 3224.00 Lakhs ) of GJRL and GLRL from its shareholder’s represents zero interest subordinate loan repayable after the repayment of other secured loans from banks and financial institutions.

vi) Secured Rupee Term Loans from Banks of Rs.11667.00 Lakhs (31st March 2015: Rs.13472.00 Lakhs ) of Cyberabad Expressways Limited (CEL) is secured by way of pari passu first charge on (a) all monies including annuity

receivable from Hyderabad Growth Corridor Limited (HGCL) to the credit of the escrow Account, b) All rights, title, interest, benefits, claims and demands of the company under project agreements subject to the provisions of the concession agreement, (c) Assignment of rights, title and interest to or in favor of the lenders pursuant to and in accordance with the substitution agreement as per the provisions of the financing documents of the project. The facilities carry an annual interest rate of 11.50% (31st March 2015: 11.50%).

vii) Secured Rupee Term Loans from Banks of Rs. 8999.00 Lakhs (31st March 2015: Rs.9771.00 Lakhs ) of Hyderabad Expressways Limited (HEL) is secured by way of pari passu first charge on (a) all monies including annuity receivable from HGCL to the credit of the escrow Account, (b) all rights, title, interest, benefits, claims and demands of the company under project agreements subject to the provisions of the concession agreement, (c) Assignment of rights, title and interest to or in favor of the lenders pursuant to and in accordance with the substitution agreement as per the provisions of the financing documents of the project. The facilities carry an annual interest rate of 11.50% (31st March 2015: 11.50%).

viii) Secured Rupee Term Loans from Banks of ‘ Nil (31st March 2015: Rs.19488.00 Lakhs ) of Western UP Tollways Limited (WUPTL) is secured by way of (a) first mortgage and charge in a form satisfactory to all company’s immovable properties, present and future expect project assets, (b) first charge by way of hypothecation of all the company’s movables, including movable plant and machinery, present and future except the project assets, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, (c) a first charge on operating cash flows, book debts and receivables and any other revenues of whatsoever nature and wherever arising present or future, (d) subject to provisions of provisions on concession agreement, first charge on the escrow account, debt service reserve, MMR and other reserves, (e) a first pledge of 100% of paid up capital till three years of commencement of commercial operations and thereafter minimum 51% of total paidup capital of the company held by the promoters during the tenure of the loan. The facilities carry an annual interest rate of Nil (31st March 2015: 11.50% to 14.00%).

ix) Unsecured Rupee Term Loan of Rs. Nil (31st March 2015: Rs. 2468.00 Lakhs ) of WUPTL from related parties carrying interest at the annual rate of Nil (31st March 2015: 12%).

1. Project Loans of Indore - Dewas Tollways Ltd (IDTL):

Secured Rupee Term Loan-I of Rs.34964.00 Lakhs (31st March, 2015: Rs.34964.00 Lakhs ), Secured Rupee Term Loan-

II of Rs.2556.00 Lakhs (31st March, 2015: Nil) and FITL of Rs. 6740.00 Lakhs (31st March, 2015: Rs. 2515.00 Lakhs ) from Banks of Indore Dewas Tollways Limited (IDTL) is secured by way of (a) all monies including Toll collected on the Project Highway to the credit of the Escrow Account as per the provisions of the Concession Agreement, (b) all the Borrower’s Properties and Assets excluding the Project Assets as defined in the Concession Agreement, (c) all Tangible Assets of the Company not limited to Goodwill, undertaking and uncalled capital of the company, (d) pledge of shares aggregating to 51% of the paid-up equity capital of the Borrower, (e) all rights, title, interest, benefits, claims and demands of IDTL under project documents subject to the provisions of the Concession Agreement,

(f) assignment of rights in favor of the lenders in accordance with the substitution agreement in respect of financing by the senior lenders under the financing documents for the project, (g) assignment or creation of security interest in all Insurance Contracts/Insurance proceeds. The Bankers have approved the restructuring package with the cutoff date being 1st July, 2014 with a Moratorium of 33 months for Interest and principal Obligations. The facilities carry an annual interest rate of 11% p.a.

2. Project Loans of Indore - Sai Maatarani Tollways Ltd (SMTL):

i) Secured Rupee Term Loan from Banks / Financial Institutions of Rs. 87937.00 Lakhs (31st March, 2015: Rs. 61239.00 Lakhs ) of Sai Maatarani Tollways Limited (SMTL) is secured by way of (a)first mortgage and charge on all the borrower’s immovable properties, present and future, if any, save and except the Project Assets, (b) a first charge by way of hypothecation on all the Borrower’s tangible moveable assets, including but not limited to all current/ non-current assets, moveable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles, all other movable assets, both present and future, save and except the Project Assets, (c) a first charge on all the Borrower’s bank accounts including but not limited to the Escrow Account/its Subaccounts, (d) a first charge on all intangibles of the Borrower including but not limited to goodwill, rights, undertakings, uncalled capital and intellectual property rights, both present and future, (e) an assignment by way of security of the right, title, interests, benefits, claims and demands of the Borrower in, to and under the Project Documents, (f) pledge of equity shares held by the Sponsor constituting 51% of the total paid up and voting equity share capital of the Borrower until the Final Settlement Date. The applicable interest rate on Term Loans shall be floating at - (a) Spread @ 2% p.a. above the Base Rate of the Lead Bank viz. IDBI Bank Ltd.; or (b) Spread @ 2% p.a. above the IIFCL benchmark rate, whichever is higher. The term loan shall be repayable in 48 unequal quarterly installments commencing from 1st January, 2018.

ii) Secured Rupee Term Loan (Subordinate Debt) from Financial Institutions of Rs. 8000.00 Lakhs (31st March, 2015: Rs. 8000.00 Lakhs ) of SMTL is secured by way of mortgage second charge on all the borrower’s immovable properties, present and future, if any, save and except the Project Assets, (b) A second charge by way of hypothecation on all the Borrower’s tangible moveable assets, including but not limited to all current/ noncurrent assets, moveable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles, all other movable assets, both present and future, save and except the Project Assets, (c) A second charge on all the borrower’s bank accounts including but not limited to the Escrow Account/its sub-accounts that may be opened in accordance with any of the Project Agreement, (d) A second charge on all intangibles of the Borrower including but not limited to goodwill, rights, undertakings, uncalled capital and intellectual property rights, both present and future, save and except the Project Assets (provided that all amounts received on account of any of these shall be deposited in the Escrow Account and that the charges on the same shall be subject to the extent permissible as per the priority specified in the Clause 31 of the Concession Agreement and Clause 4 of the Escrow Agreement). Further, a charge on uncalled capital, as set in above, shall be subject however to the provisions of Clauses 5.3 and 7.1 (k) and Clause 31 of the Concession Agreement, (e) an assignment by way of security of the right, title, interests, benefits, claims and demands of the Borrower in, to and under the Project Documents, (f) An irrevocable and unconditional corporate guarantee from the Sponsor. The applicable interest rate on Subordinate Loan shall be floating at Spread, i.e. 2% p.a. above the Interest rate applicable to IDBI Bank Ltd. as per the Common Loan Agreement. The subordinate loan is repayable in 18 quarterly installments commencing from 1st January, 2023.

3. External Commercial Borrowing of the Company:

Details of External Commercial Borrowing: The Company availed Foreign Currency Loan of USD $ 24.42 million from an Indian Scheduled Bank to meet a part of funds requirement towards redemption of outstanding FCCBs. The ECB loan is repayable in 24 quarterly installments commencing from October 2013 with rate of interest at 3 months USD LIBOR 500bps.

Nature of Security : (a) Equitable mortgage of immovable property of 600 acres in the name of step down subsidiary company, (b) Pledge of 76,37,738 equity shares of GPL held by promoters, (c) Personal guarantees of the two promoter directors.

4. Secured Vehicle Loans of the Company availed from the Financial Institutions are secured by hypothecation of specific vehicles purchased out of the said loans. The vehicle loans carry interest rate between 11% to 15% p.a.

5. The promoters of the Company have brought back the dividend amount of Rs. 152.10 Lakhs as unsecured loan in compliance of the lenders stipulation for distribution of dividend to shareholders.

* Additional Concession Fee payable to NHAI by Indore Dewas Tollways Limited :

In order to more appropriately present the Financials statements of the company, the total premium amount of Rs. 1,18,119.88 Lakhs as per the Concession Agreement, has been capitalized as "Intangible Assets” and amortized over a period of service concession Agreement as per the method prescribed in Part A to the Schedule II to the Companies Act, 2013 and corresponding Obligation for committed premium has been recognized as liabilities.

The Contractual Obligation to pay premium (Additional Concession Fees) to National Highways Authority of India over the Concession period has been recognized upfront on an undiscounted basis when the project gets completed as per the Concession Agreement and is a part of the "Intangible Asset " and corresponding Obligation for committed premium is recognized as liabilities.

Additional Concession fee has to be paid to National Highways Authority of India as per clause 26.2.1 of the Concession Agreement dated 17th May, 2010. National Highways Authority of India has granted deferment of Additional concession fees payable to them vide their sanction letter dated 11th June, 2014 . Interest on the Additional concession fees payable to National Highways Authority of India for the FY 15-16 is not provided in the books of accounts as National Highways Authority of India has deferred the premium payment up to 6 years. The Interest liability on Additional Concession fees has neither accrued nor due until the completion of the 6 years up to which NHAI has deferred the premium. After the completion of the 6th year, NHAI will review the deferment of premium payment based on the cash flows available then. The liability accrues and becomes due as and when there are cash flows sufficient for the payment of premium. At the end of the 6th year based on the cash flow position, National Highways Authority of India will review the deferment proposal and may extend the deferment, if the cash flows are not sufficient to meet the debt and O&M obligations.

There is a decline in the Toll collections due to the non maintenance of the adjoining stretches of the project highway i.e., Shivpuri to Dewas & Ghar to Dewas. The development of those streches were stalled due to issues between the National Highways Authority of India and the developer to whom the projects were awarded. Now Shivpuri - Dewas project has been awarded on EPC basis to new developers, which are expected to be completed within a period of 3-4 years from now. Till such time the revenues from the Toll collections seem bleak and no surplus cash flows are being expected after debt obligations, so as to pay the Additional Concession fees to National Highways Authority of India or Interest thereon. In view of the total stress in the Funds flow the management has considered that the liability accrues and becomes due as and when the cash flows are sufficient for the payment as explained above.

Nature of Security and Terms of Repayment

6. Working Capital Facilities (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.

Period and amount of interest due as on balance sheet date:

- Interest amount of Rs. 8.28 crores for the month of March, 2016 charged on 31.03.2016 is due on balance sheet date.

7. Unsecured loans from related parties

The unsecured loans received from related parties are repayable on demand along with interest rate at 16% p.a.

8. 7,47,49,590 Equity Shares of NCC Infrastructure Holdings Ltd held by the Gayatri Energy Pvt Ltd are pledged in favor of IFCI Limited as collateral security for the debentures issued by the Subsidiary Company.

9. 23,65,99,300 Equity Shares of TPCIL are pledged in favor of Rural Electrification Corporation Ltd as collateral security for the loan availed by TPCIL.

10. In pursuance of Exit Agreement entered between Gayatri Energy Venture Pvt. Ltd (GEVPL) and Jinbhuvish Power Generation Private Limited (JPGPL), 2,74,49,989 Equity Shares of JPGPL held by the GEVPL are pledged in favor of JPGPL.

11. The company has made provision for the diminution in the market value of quoted investments in the books as envisaged in the Companies (Accounting Standard) Rules, prescribed by the Central Government.

12. Other Notes forming part of the Consolidated Financial Statements:

13. All amounts in the financial statements are presented in Rs. in Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped / rearranged wherever considered necessary to conform to the figures presented in the current year.

14. Basis of preparation of consolidated financial statements:

Gayatri Projects Limited ("the company") has presented consolidated Financial statements by consolidating its own financial statements with those of its Subsidiaries, Associates and Joint Ventures in accordance with Accounting Standard- 21(Consolidated Financial statements), Accounting Standard-23 (Accounting for Investments in Associates in consolidated Financial statements) and Accounting Standard - 27 (Financial reporting of Interests in joint ventures) notified in section 211 (3C) of the Companies Act, 1956.

The Financial statements of each of those Subsidiaries, Associates and Joint Ventures are prepared in accordance with the generally accepted accounting principles & accounting policies of Parent Company. The effects of intercompany transactions between consolidated companies/entities are eliminated in consolidation.

15. 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.

16. Observations and Qualifications made by the Independent Auditors of the Subsidiary Companies:

As per the approval of Board and Shareholders of the Company, Gayatri Hi-tech Hotels Ltd (GHHL), a related party of the Company, has allotted 2,35,00,000 - 9% Cumulative Redeemable Preference Shares (CRPS) of Rs. 10/- each at a premium of Rs.90/- per share against receivables from GHHL.

17. As per an expert opinion, during the year the Company has claimed deduction u/s 80IA of the Income Tax Act, 1961 in respect of income earned on infrastructure projects.

18 In pursuance of share purchase agreement entered between the Company and AMP Capital Finance Mauritius Limited (AMP) to purchase shares of Gayatri Infra Ventures Limited held by AMP an amount of Rs. 200.0ILakhs has been paid as an advance towards purchase of shares.

19. (a) During the year, the Company has issued 16,19,386 Equity Share of Rs. 10/- each at a premium of Rs. 193.78 per

equity share by way of preferential allotment to promoters against unsecured loans of Rs.33.00 crores received during the previous year, in terms of the Master Restructuring Agreement entered with the Company’s Lenders.

(b) The company has further issued 36,04,000 Equity Shares of Rs.10 each at a premium of Rs. 193.20 on preferential allotment / private placement.

20. Some of the Contract Advances given by the Company in earlier years and which are long pending for recovery due to reasons beyond the control of both the parties have been converted to interest bearing loans and grouped under "Long term Loans & Advances". The management of the Company has already initiated steps to recover the same and is confident that these advances / loans will be recovered and hence no provision has been made in the financials.

21. 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.

22. During the previous financial years one of the Subsidiary Company had given an Amount of Rs.100 crores to NCCLtd for the purpose of acquisition of equity shares of NCC Infrastructure Holdings Limited (NCCIHL). As per the amended agreement dated on 14 November, 2014 the shares will be allotted to Gayatri Energy Ventures Private Limited in 3 tranches on or before 31st March, 2017.

23 During the previous financial years, one of the Subsidiary Company Gayatri Energy Ventures Pvt. Ltd. (GEVPL) had made various investments in Jinbhuvish Power Generation Private Limited (JPGPL) by way of acquisition of shares, share application money, advance for purchase of equity shares total amounting to Rs.54.91 crores. During the previous financial years the GEVPL had entered into an Exit Agreement dated 25th May 2013 with JPGPL, which was duly amended by various letter agreements from time to time and as per the latest letter agreement dated 3I st October 2015, the GEVPL shall exit from JPGPL by 31st October 2016.

24. In the opinion of the management and to the best of their knowledge and belief, the value of the assets reported under Long Term Loans and Advances and 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.

25. There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 31-03 2016 and amounts which are required to be transferred to such funds have been transferred.

26. One of the Subsidiary Company Gayatri Infraventures Limited (GIVL) has entered into a definitive sale agreement dated 19 January 2016 with Cube Highways and Infrastructure PTE Limited for divestment of its entire equity stake amounting to Rs.4,606.09 Lakhs held in Western UP Tollway Limited, a jointly controlled entity. On the basis of assessment of the status of compliances with certainmandatory conditions stipulated in the agreement and pending finalization of the sale consideration, the financial statements of the jointly controlled entity have been accordingly consolidated in the financial statement of the GIVL group as at and for the year ended 31st March 2016 and duly disclosed as a discontinuing operations in accordance with the provisions of Indian GAAP The details of the assets, liabilities, income and expenditure pertaining to the aforesaid jointly controlled entity, duly consolidated, considered for consolidation in the financial statements of GIVL group as at and for the year ended 31st March 2016 are as follows:


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.


Mar 31, 2011

1. Contingent Liabilities not provided for

(Rs.in Lacs)

S.No Particulars 2010-11 2009-10

1 Guarantees given by Banks towards performance & contractual commitments

a) Issued on behalf of Company 64,248.69 44,509.66

b) Issued on behalf of Subsidiaries /Group Companies 27,462.24 8,232.51

2 Corporate guarantees given to Group companies 5,71,166.00 33,566.00

3 Disputed Liability of Sales Tax, Service Tax and Seigniorage Charges 1,547.12 1,530.42

4 Estimated amounts of contracts remaining to be executed on capital account and not provided for — —

2. Issued and Subscribed Share Capital

i) During the year, 25 Foreign Currency Convertible Bonds (FCCB) holders opted for conversion and as a result the Company has allotted 2,86,718 equity shares of Rs 10/- each at a premium of Rs 278/-, being the minimum SEBI floor price prescribed in the offering circular of FCCB's.

ii) During the year 2009-10, the Company had issued and allotted 10,00,000 warrants to the Promoters of the Company on a preferential basis at a price of Rs.142.52 per warrant convertible into 1 equity share of Rs.10/ - each at a premium of Rs.132.52 per warrant which shall be convertible within a period of 18 months from the date of allotment i.e. before 13/03/2011, which is in accordance with the SEBI (Disclosure and Investor Protection) Guidelines, 2000, ("SEBI DIP Guidelines"). On October 29, 2010, the promoters converted 597,521 Warrants into Equity Shares as per the pricing formula prescribed in the SEBI DIP Guidelines for preferential issues. The remaining warrants 402,479 of the aforesaid 1,000,000 warrants remained unexercised as the promoters are not allowed to convert beyond 5% during one financial year as per SEBI(SAST) Regulations, 1997. Hence the remaining warrants were forfeited by the company on March 14, 2011 and the amount paid by the promoters towards the warrants of Rs. 143.40 Lacs was transferred to Capital Reserve Account.

3. Loan Funds: Secured Loans:

a) Debentures

i) The Company has issued during the year 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 Lacs. The Debentures are secured by the pari passu 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.

ii) Debentures Redemption Reserve: Rs.1300.00 lacs has been credited as Debenture Redemption Reserve during the year and is carried as part of the Reserves & Surplus in the Balance Sheet.

b) Term Loan from Banks

Term Loans availed from banks and others are secured by hypothecation of specific assets, comprising of plant and machinery and construction equipment, acquired out of the said loans and personal guarantees of Directors.

c) Working Capital Facilities

Fund based and non-fund based working capital facilities from the consortium of Banks are secured by:

i) Hypothecation against first charge on stocks, books debts and other current assets of the Company both present and future ranking pari passu with consortium banks.

ii) Hypothecation against first charge on all unencumbered fixed assets of the Company both present and future ranking pari passu with consortium banks.

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

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

d) Equipment & Vehicle Loans from Others

Equipments and Vehicle loans availed are secured by hypothecation of specific equipments and vehicles acquired out of the said loans.

Unsecured Loans:

e) Foreign Currency Convertible Bonds (FCCBs):

i) The company had issued 308 Zero Coupon Foreign Currency Convertible Bonds (FCCBs) (considered as a non-monetary liability) 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 from and including 12th September 2007 to and including 27th July 2012 at an initial conversion price of Rs.378.35 per share with a fixed rate of exchange on conversion at Rs.0.3303 per JPY. As per the terms of the issue, the conversion price of the Bonds is subject to price reset and the revised reset price of the Bonds during the year 2010-11, is Rs.288/- per share which is in terms with the offering circular.

ii) Out of the total bonds, 12 bonds are already converted into equity shares in the earlier year and in the current year 25 bonds were converted into equity shares leaving balance of 271 bonds as at the date of Balance Sheet. If all the outstanding bonds are converted into equity shares at the revised reset price, then the share capital of the company will increase by around 31.08 lacs equity shares of Rs.10/- each.

iii) The Bonds may be redeemed in whole but not in parts, at the option of the issuer at any time on or after 3rd August, 2010 and on or prior to 3rd August 2012 subject to fulfillment of certain conditions. Unless previously redeemed, purchased, converted or cancelled, the bonds will mature on 3rd August 2012 at 120.414% of its principal amount.

iv) The Company continues to classify the outstanding liability (towards FCCB convertible into shares at the option of the holders), as a non-monetary liability as in its view the current fall in the market price of the company's share price is a temporary aberration.

4. Investments:

i) Gayatri Sugars Ltd

Market value of the investment in Gayatri Sugars Limited as at 31st March 2011 is Rs. 87.64 Lacs which is lesser than the carrying amount in the Balance Sheet by Rs. 205.46 Lacs. In the opinion of the Management, the diminution in the value of investment is purely temporary in nature hence provision for the same is not provided for in the books.

ii) Gayatri Energy Ventures Private Limited (GEVL)

During the year, the Company has invested Rs 26,800.00 Lacs (2680 Lacs equity shares of Rs.10/- each at a premium of Rs.990/- per share) in Gayatri Energy Ventures Private Limited (GEVL), a wholly owned subsidiary of the Company. GEVL is setting up power projects through its subsidiaries and associates.

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 Losses not considered

a) 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. There is substantial progress in the proceedings in the arbitration 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.

b) Other Joint ventures

Profit / (Loss) of all other joint ventures, other than the above, are recognized in the book of accounts.

10. Related party transactions as per Accounting Standard 18 Details of related parties:

Subsidiary Companies

Gayatri Energy Ventures Pvt.Ltd

Gayatri Infra Ventures Ltd

Bhandara Thermal Power Corporation Ltd

HKR Roadways Limited

Step-down Subsidiaries Companies

Gayatri Lalitpur Roadways Ltd

Gayatri-Jhansi Roadways Ltd

Thermal Powertech Corporation India Ltd

Associated Companies

Hyderabad Expressways Limited

Cyberabad Expressways Limited

Western UP Tollway Limited

Balaji Highways Holding Limited

(Considered as Subsidiary as per AS-21 for consolidation)

Indore Dewas Tollways Limited

(Considered as Subsidiary as per AS-21 for consolidation)

Entities in which KMP are interested

Deep Corporation Pvt. Ltd

Indira Constructions Pvt. Ltd

Gayatri Tissue & Papers Ltd

Gayatri Sugars Ltd

Gayatri Hi-Tech Hotels Ltd

Gayatri Housing Ventures Pvt. Ltd

Gayatri Hotels & Theaters Pvt. Ltd

Amaravathi Thermal Power Pvt.Ltd.

Gayatri Bio-Organics Limited

TSR Foundation

Dr.T.Subbarami Reddy (HUF)

Balaji Charitable Trust

Key Management Personnel (KMP)

Mr. T.V.Sandeep Kumar Reddy

Mr. J.Brij Mohan Reddy

Mrs.T.Indira Reddy

Joint Ventures

Gayatri RNS Joint Venture

IJM Gayatri Joint Ventures

Gayatri Ranjit Joint Venture

RNS Gayatri Joint Venture

Gayatri - GDC Joint Venture

Gayatri – BCBPPL Joint Venture

Jaiprakash Gayatri JV

Gayatri ECI Joint Venture

Gayatri – Ratna Joint Venture

MEIL-GAYATRI-ZVS-ITT Consortium

Simplex Gayatri Consortium

Gayatri-JMC Joint Venture

Viswanath - Gayatri Joint Venture

12. 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.

13. 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.

15. Consolidated Financial Statements

As per the listing agreement entered with the Stock Exchanges, accounting standards notified by Government and provisions of Sec 212 of the Companies Act, 1956, audited financial statements of the Subsidiaries, Associate Companies and Joint ventures for the year 2010-11 were consolidated and annexed.

17. 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.

18. The unpaid dividend includes Rs. 2.29 Lacs (Previous year – Rs 1.52 Lacs), which will be transferred to the Investor Education & Protection Fund, if it remains unpaid or unclaimed as per the provisions of the Companies Act, 1956.

22. 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.

24. Prior Period Adjustment includes share of losses of the company of earlier years in Gayatri-ECI Joint Venture of Rs.1240.47 Lacs

25. Figures of previous year have been regrouped/ rearranged/ reclassified wherever necessary to confirm to the current year presentation.

26. All amounts are rounded off to nearest thousand.

27. Schedule 1 to 19 form an integral part of accounts


Mar 31, 2010

1. Contingent Liabilities not provided for

Rs.in Lacs

S.No Particulars 2009-10 2008-09

1 Guarantees given by Banks towards performance & contractual commitments :

a) Issued on behalf of Company 44509.66 41248.84

b) Guarantees given to Subsidiaries/Group Companies 8232.51 31.38

2 Corporate guarantees given to Group companies 33566.00 16696.00

3 Disputed Liability of Sales Tax, Service Tax and Seigniorage Charges 1530.42 1643.99

4 Estimated amounts of contracts remains to be executed on - - capital account and not provided for.

2. a) Share Capital:

During the year, the Company has allotted 10,00,000 equity shares of Rs10/- each at a premium of Rs175/- on preferential basis to M/s Reliance Capital Trustee Co. Ltd - Reliance Infrastructure Fund.

b) Share Warrants:

During the year the Company has allotted 10,00,000 Share warrants on a preferential basis to the promoters of the Company at a price of Rs. 142.52 per warrant with a right to apply and be allotted Equity Shares of the Company of Rs. 10/- each at a premium of Rs. 132.52 per share within a period not exceeding 18 months from the date of allotment. The Company is in receipt of Rs. 356.30 Lacs as 25% advance against the said share warrants allotted. The promoter has a right to exercise to subscribe for the warrants on or before 13th March 2011.

3. Loan Funds: Secured Loans:

a) Term Loan:

Term Loans availed from banks and others are secured by hypothecation of specific assets, comprising plant and machinery, and construction equipment, acquired out of the said loans and personal guarantees of Directors.

b) Working Capital Facilities:

Fund based and non-fund based working capital facilities from the consortium of Banks are secured by:

i) Hypothecation against first charge on stocks, books debts and other current assets of the Company both present and future ranking pari pasu with consortium banks.

ii) Hypothecation against first charge on all unencumbered fixed assets of the Company both present and future ranking pari passu with consortium banks.

iii) Equitable mortgage of properties belonging to Promoters, Directors, group companies.

iv) Personal guarantee of promoter Directors, group companies/firms and relatives.

c) Vehicle Loans:

Vehicle loans availed are secured by hypothecation of vehicles acquired out of the said loans.

Unsecured Loans:

FCCB BONDS:

The Company has issued 308 FCCB Bonds of JPY 10000000 each aggregating to JPY 308,00,00,000 due in the year 2012 equivalent to Rs.10173.24 Lacs. The bonds are listed in the Singapore Stock Exchange. Out of the above, 12 Bonds of value of JPY 120 million were converted in the year 2007-08 leaving a balance of 296 Bonds of JPY 10000000 each equivalent to Rs.9776.88 Lacs. During the year under review the company has not received any request for conversion of the Bonds.

4. Investments:

i) Gayatri Sugars Ltd

Market value of the investment in Gayatri Sugars Limited as at 31st March 2010 is Rs. 123.98 Lacs which is lesser than the carrying amount in the Balance Sheet by Rs. 169.12 Lacs. In the opinion of the Management, the diminution in the value of investment is purely temporary in nature hence provision for the same is not provided for in the books.

ii) Gayatri Energy Ventures Private Limited (GEVL)

GEVL is a wholly owned subsidiary of the company and it is establishing mega coal based power project at Krishnapatnam, Andhra Pradesh State in collaboration with the Sembcorp Industries Ltd, Singapore. During the current year the Company has invested Rs. 3034.17 Lacs in GEVL. The investment to the extent of shares allotted is shown in the Investment schedule and the balance in the Loan and Advances schedule.

Investment in Equity Shares of GEVL have been pledged in favour of PTC India Limited for a loan of Rs.100.00 crores sanctioned to Thermal Powertech Corporation of India Ltd (a wholly owned subsidiary of GEVL)

5. 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.

6. Joint Venture Losses not considered

a) 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. There is substantial progress in the proceedings in the arbitration and the management is reasonably confident of recovery of these claims. During the year under review in the matter of dispute out of the work of the “Warangal-Khammam- Tallada Road work”, the committee of Arbitrators has awarded a claim of Rs. 12.42 Crores in favour of joint venture.

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.

b) Gayatri - ECI JV

Gayatri-ECI J V, a joint venture between ECI Engineering & Construction Company Limited and Gayatri Projects Limited with a sharing ratio of 50:50. The joint venture is executing road projects in Assam, namely AS-10,AS-11 and AS-27 awarded by NHAI.

The joint venture due to extraneous and law and order problems in the State could not progress the work as planned and hence incurred losses of Rs. 2963 Lacs till year 2008-09. However due to changed strategy of the company and over all improvement of the law and order situation, the progress of the work has improved substantially and the joint venture has posted a profit of Rs. 481.73 Lacs during the year 2009-10 and to that extent the accumulated losses have been recovered. Since now the substantial portion of the project work has started, the losses incurred in the earlier years can be recovered from these profits. Hence, the losses in the joint venture are not considered by the parent company.

c) Other Joint ventures

Profit / (Loss) of all other joint ventures, other than the above, are recognized in the books.

7. Employees 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:-

8. Segment Reporting:

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

9. Leases:

Disclosure under Accounting Standard – 19 "Leases", issued by the Institute of chartered Accountants of India. The Company has taken various residential/godowns/offices 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.

10. Consolidated Financial Statements:

As per the listing agreement entered with the Stock Exchanges, accounting standards notified by Government and provisions of Sec 212 of the Companies Act, 1956, Audited financial statements of the Subsidiaries, Associate Companies and Joint ventures for the year 2009-10 were consolidated and annexed.

The Company has applied for approval from Central Government under section 212(8) of the Companies Act, 1956 for not attaching the annual reports of subsidiary companies.

The Companys interest in Subsidiaries, Associates and Jointly Controlled Entities as on March 31, 2010 and its proportionate share in the Assets, Liabilities, Income and Expenditure of the entities consolidated as on that date are given below:

11. Dues to Micro and Small Enterprises:

On the basis of information available with the Company, there are no dues outstanding for more than 30 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.

12. The unpaid dividend includes Rs. 1.52 Lacs (Previous years – Rs. 0.86 Lacs) to be transferred to the Investor Education & Protection Fund.

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

14. Figures of previous year have been regrouped/ rearranged/ reclassified wherever necessary to confirm to the current year presentation.

15. All amounts are rounded off to nearest thousand.

16. Schedule 1 to 18 form an integral part of accounts