GAYATRI PROJECTS Notes to Accounts

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:


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