To The Members,
The Directors have pleasure in presenting before you the Directors Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016.
FINANCIAL RESULTS (Standalone) : Rs. in Lakhs
Profit Before Interest Depreciation and Taxes
Less: Interest and Finance Charges
Profit before Interest and Deprecation
Profit before Tax
Provision for Tax
Profit after Tax
Profit brought forward
Profit available for appropriation
Proposed Dividend at Rs. 2.00 per share (20%)
Dividend Tax on proposed Dividend
Transfer to General Reserve
Surplus carried to Balance sheet
Review of Operations :
Our revenue from operations on a standalone basis increased to Rs. 1,81,221.25 lakhs from Rs. 1,60,114.16 lakhs in the previous year, at a growth rate of 13.18%. Out of total revenue, 62.54% came from road works, 20.65% from industrial works, 15.42% from irrigation works and 1.39% from other works.
Our operating profits before depreciation and finance cost on standalone basis amounted to Rs. 26,605.83 lakhs (14.68% revenue), as against Rs. 21,196.12 lakhs (13.24% revenue) in the previous year. Direct cost was 83.73% of our revenue for the year ending 31st March, 2016 as compared to 85.02% in the previous year. The profit before tax was Rs. 7,065.43 lakhs (3.90% of revenue) during the year as compared to Rs. 3508.86 lakhs (2.19% of revenue) in the previous year. The net profit after tax was Rs. 5,864.84 lakhs (3.24% of revenue) during the year as against Rs. 2,205.32 lakhs (1.38% of revenue) in the previous year.
Our Company has an outstanding order book of Rs.10,37,572 lakhs as on 31st March 2016 and we have received new orders valued about Rs. 1,39,944 lakhs so far during the current financial year. The total order book including new works is about Rs. 11,77,516 lakhs.
In general the progress of the works being executed by the company is in line with the time lines given by the clients. We have obtained extension of the time wherever required and progress of the work is satisfactory.
Future Outlook :
The International agencies are forecasting huge growth in the Indian construction sector. The Indian construction sector is estimated to grow at an average rate of 8.50% annually. The Union Budget announcement in 2016 has given great boost to the construction sector. Spending in infrastructure sectors, including both current and capital expenditures, is expected to increase significantly by 16 percent. The budget also proposed ‘ 2,21,246 crores total outlay for infrastructure development including the development of smart cities, Rs. 97,000 crores investment in the road sector and approved nearly 10,000 kms of National Highways in 2016-17. The future outlook of Indian construction sector is positive and bright and our company as leading player in construction industry is in advantageous position to get more orders, revenues and profits.
Despite the difficult economic conditions your directors are pleased to recommend a dividend of ‘ 2.00 per equity share (20%) of the face value of Rs. 10/- for the period ended 31st March, 2016.
The dividend, subject to approval at the AGM on 28th day of September, 2016, will be paid to the shareholders; whose names appear on the Register of Members on 22nd September, 2016.
It is proposed to transfer Rs. 500.00 Lakhs to the General Reserves of the Company from the current year profits.
The paid up equity share capital of the company has increased from Rs. 30.22 Crs to Rs. 35.45 Crs pursuant to the allotment of 36,04,000 equity shares to Foreign Institutional Investors (deemed FPI’s) and 16,19,386 equity shares to promoters by way of preferential allotment.
Material Changes and Commitments Affecting the Financial Position of the Company:
There are no material changes and commitments affecting Financial position of the company between the end of the financial year to which these statements relate and the date of this Board’s Report except that the Board has approved Composite Scheme of Arrangement between M/s. Gayatri Projects Limited, M/s. Gayatri Infra Ventures Limited and M/s. Gayatri Domicile Private Limited providing for:
a) Transfer of investments in Sai Maatarini Tollways Limited from Gayatri Projects Limited to Gayatri Domicile Private Limited at book value. The lump-sum consideration of Rs. 180,16,03,000 (One Hundred and Eighty Crores Sixteen Lacs Three Thousand only) will be paid in the form of 1,24,60,000 (One Crore Twenty-Four Lacs Sixty Thousand) equity shares of Rs. 10 each (fully paid) and 16,77,00,300 (Sixteen Crore Seventy-Seven Lacs Three Hundred) redeemable preference shares of Rs. 10 each (fully paid) of Gayatri Domicile Private Limited;
b) Post transfer of investments, merger of Gayatri Infra Ventures Limited with Gayatri Projects Limited;
c) Post merger of Gayatri Infra Ventures Limited with Gayatri Projects Limited, transfer of Infrastructure Road BOT Assets Business from Gayatri Projects Limited to Gayatri Domicile Private Limited
Pursuant to the above company had filed Scheme of Arrangement along with requisite annexure with Stock Exchanges on 05th August, 2016.
There is no change in the nature of business of the Company during the year under review.
The Board of Directors met 8 times in the Financial Year 2015-16 on 30th May, 2015, 16th June, 2015, 11th August,
2015, 14th August, 2015, 03rd September, 2015, 14th November, 2015, 28th November, 2015 and 13th February, 2016.
Directors and Key Managerial Personnel:
During the year under review, the Company has:
1. Re-appointed Mr. J. Brij Mohan Reddy as Executive Director of the Company for a further period of 3 years w.e.f 01.10.2015.
2. Appointed Mr. Umakant. K. Bijapur as a director, Nominee of Bank of Baroda on 03.09.2015 further Mr. Venkateswarlu Kakkera, was appointed as Nominee Director on 13.02.2016 replacing Mr. Umakant K. Bijapur.
3. Appointed Mr. J. N. Karamchetti as Independent Director of the Company on 14.11.2015.
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).
Composition of Audit Committee:
The Audit Committee of the Board of Directors is as follows:
Mr. Ch Hari Vittal Rao - Chairman
Dr. V. L. Moorthy - Member
Mr. G Siva Kumar Reddy - Member
Mr. J.N. Karamchetti - Member
Policy Laid Down by the Nomination and Remuneration Committee for Remuneration of Directors, KMP & other Employees:
The Remuneration policy of the Company is performance driven and is structured to motivate Employees. Recognize their merits and achievements and promote excellence in their performance. The Nomination Remuneration and Evaluation Policy of the company is enclosed at Annexure-I of this report.
Manner in Which Formal Annual Evaluation has been made by the Board of its Own Performance and that of its Committees and Individual Directors:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out evaluation of
(i) its own performance, (ii) the directors individually and
(iii) working of its Committees. The manner in which the evaluation was carried out as detailed below:
(a) Nomination & Remuneration Committee:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has formulated the criteria for evaluation of directors and evaluated every director. A structured questionnaire was prepared after taking into consideration various parameters such as attendance and participation in meetings, monitoring corporate governance practices, independence of judgment, safeguarding the interests of the company etc., and accordingly the evaluation was made. The Members of the Committee evaluated the individual directors at its meeting held on 13.02.2016.
The Nomination and Remuneration Committee decided that since the performance of the directors has been excellent, it is decided to continue with the term of the directors, the Managing Director and the Executive Director.
(b) Separate Meeting of Independent Directors:
The Independent directors of the Company at its meeting held on I3.02.20I6 (a) reviewed the performance of the non-independent directors and Board, (b) reviewed the performance of the Chairperson of the Company and (c) assessed the quality, quantity and timeliness of flow of information between the company management and the Board. All the Independent Directors attended the meeting.
A structured questionnaire was prepared after taking into consideration various parameters such as attendance and participation in meetings, monitoring corporate governance practices, independence of judgment, safeguarding the interests of the company etc., and accordingly, the evaluation was made. The independent directors evaluated the non Independent directors.
The Independent Directors decided that since the performance of the Non-Independent Directors (including Managing Director and Whole time Director) is excellent, the term of their appointment be continued.
The Independent Directors after review of the performance of the Chairman decided that the Chairman has good experience, knowledge and understanding of the Board’s functioning and his performance is excellent. The Independent Directors decided that the information flow between the Company’s Management and the Board is excellent.
(c) Evaluation by Board: The Board has carried out the annual performance evaluation of its own performance, the Directors individually (excluding the director being evaluated) as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, effectiveness in developing Corporate governance structure to fulfill its responsibilities, execution and performance of specific duties etc. The Board decided that the performance of individual directors, its own performance and working of the committees is excellent.
Director’s Responsibility Statement:
In pursuance of section I34 (5) of the Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively
Subsidiaries Companies, Associates and Joint Ventures:
The Company has six subsidiary companies (including step down subsidiaries) as on 31st March, 2016 as per the Companies Act, 2013.
As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies/ Associate Companies/Joint Ventures is prepared in Form AOC-1 are given in Annexure- II.
Further the Company after 31st March, 2016 has acquired 100% shareholding in M/s. Gayatri Domicile Private Limited as a part of proposed restructuring of the Company, pursuant to which M/s. Gayatri Domicile Private Limited is a wholly owned subsidiary of the Company.
The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered Office of the Company and that of the respective subsidiary companies.
The company has adopted the policy for determining ‘material’ subsidiaries and the same has been placed on the website of the company at http://www.gayatri.co.in/ Investors/Corporate Governance/Policies.
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report is annexed as Annexure III.
Consolidated Financial Statements:
The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.
Statutory Auditors and their Report:
The Auditors, M/s. M O S & Associates LLP Chartered Accountants, Hyderabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of one year from the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM. Your Board of Directors have recommended their reappointment based on the recommendation of the Audit Committee to the members for their approval at the forthcoming Annual General Meeting for a term of one year till the conclusion of the next AGM.
The Independent Auditors of M/s Gayatri Infra Ventures Limited (GIVL), a subsidiary of the company, in their audit report on consolidated financial statements have qualified that they are unable to comment upon the consequential effects on the disinvestment of its entire equity stake amounting to Rs. 4,606.09 Lakhs held in Western UP Tollways Limited, a jointly controlled entity of GIVL. The management is in the process of renegotiating the consideration for the sale of investment and also making arrangements for meeting the other conditions stipulated in the sale agreement. Pending the final outcome of the said process, the management is unable to comment upon the consequential effects, if any, of the said matter, on the financial statements of GIVL. The consequential effects, if any, on the disinvestment will be accounted in the year in which the disinvestment process is completed.
As per the provisions of the Section 204(1) of the Companies Act, 2013, the Company has appointed Mr. Y. Koteswara Rao, Practicing Company Secretary to conduct Secretarial Audit of the records and documents of the Company The Secretarial Audit Report for the Financial Year ended 31st March, 2016 in Form No MR-3 is annexed to the Directors Report as Annexure - IV and forms part of this Report. The Secretarial Auditors’ Report to the Members of the Company for the Financial Year ended March 31, 2016 does not contain any qualification(s) or adverse observations
Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013
b) Conservation of energy
The Company’s main line of activity is civil construction which is not power intensive. However the Company is taking all efforts to conserve the usage of power.
(i) Use of alternate sources of energy is not applicable to the Company.
(ii) Capital investment on energy conservation equipment for its main line of activity is not applicable to the Company.
c) R & D Technology absorption
The Company main line of activity is civil construction and hence R &D and technology absorption is not applicable to the Company.
d) Foreign exchange earnings - NIL
e) Foreign exchange outgo
Nature of Payment
Repayment of ECB Loan
Repayment of ECB Interest
Plant & Machinery purchase
Details of Adequacy of Internal Financial Controls:
The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company’s policies and internal financial controls laid down by the Company.
Particulars of Loans, Guarantees or Investments:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Also, pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.
Management Discussion & Analysis:
Management Discussion and Analysis Report is annexed which forms part of this Report as Annexure -V.
Risk Management Policy:
The Company has been addressing various risks impacting the Company and developed risk policy and procedures to inform Board members about the risk assessment and minimization procedures.
Whistle Blower Policy/Vigil Mechanism:
Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 the Company has established a mechanism through which all the stakeholders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle Blower Policy which has been approved by the Board of Directors of the Company has been hosted on the website of the Company at http://www.gayatri.co.in/ Investors/Corporate Governance/Policies.
Disclosure as per Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with Rules there under, the Company has not received any complaint of sexual harassment during the year under review.
Corporate Social Responsibility Policy:
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-VI of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company at http://www.gayatri.co.in/Investors/Corporate Governance/Policies.
Significant & Material Orders Passed by the Regulators:
There are no significant and material orders passed against the Company by the regulators impacting the Company’s operation in the future.
Contracts or Arrangements with Related Parties:
All related party transactions that were entered during the financial year were in the ordinary course of the business of the Company and were on arm’s length basis. There were no materially significant related party transactions entered by the Company during the year with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company. Further the Company has entered materially significant related party transactions with related parties which were on arms length basis as disclosed in AOC-2 annexed as Annexure -VII
The policy on dealing with Related Party Transactions is disseminated on the website of the company at http:// HYPERLINK "http://www.gayatri.co.in/Investors/"www.gayatri.co.in/Investors/ Corporate Governance/ Policies.
Your Company has not accepted or renewed any deposit from public during the year under review.
M/s. N.S.V. KRISHNA RAO & Co. Cost Auditors were appointed as cost auditor to audit the cost records of the Company for the F.Y 2015-16 and re-appointed for the Financial Year 2016-17.
Particulars of Employees:
Details in respect of remuneration paid to employees as required under Section I97 (I2) of the Companies Act,2013, read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section I36 of the Companies Act, 20I3 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company.
The ratio of the remuneration of each Director to the median employee’s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4, are enclosed in Annexure - VIII and forms part of this Report.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to NSE and BSE where the Company’s Shares are listed.
Corporate Governance and Shareholders Information:
Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report as Annexure -IX. Certificate from the practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under aforesaid regulations is attached to this report.
Developments during the year with regard to wholly owned subsidiary M/s. Gayatri Energy Ventures Pvt. Ltd (GEVPL):
a. Launched Power Complex at Krishnapatnam.
GEVPL along with its JV partner Sembcorp Industries launched its 2,640 MW Sembcorp Gayatri Power Complex on 27th February, 2016. Built, at a total project cost of US$3 billion (Rs. 20,000 crore), the power complex is the largest foreign direct investment-driven project on a single site in the thermal energy sector in India to date. The complex houses two 1,320-megawatt supercritical coal-fired power plants - Thermal Powertech Corporation India (TPCIL), first power plant successfully completed and commenced full commercial operation in September 2015, while Sembcorp Gayatri Power Limited (Formerly NCCPPL), second plant is expected to be fully operational in 2016.
b. Call option agreement with its JV partner Sembcorp Utilities.
GEVPL has entered a call option agreement with its JV partner Sembcorp Utilities to increase its stake up to 30% in Thermal Powertech Corporation India Limited, over the next 5 years.
Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders -clients, financial institutions, Banks, Central and State Governments, the Companies’ valued investors and all other business partners for their continued co-operation and excellent support received during the year.
Yours Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.
For and on behalf of the Board
(T. INDIRA SUBBARAMI REDDY) (T.V.SANDEEP KUMAR REDDY)
Chairperson Managing Director
(DIN : 00009906) (DIN : 00005573)
Place : Hyderabad (P. SREEDHAR BABU) ( I.V. LAKSHMI)
Date : 26th August, 20I6 Chief Financial Officer Company Secretary &Compliance Officer