1. Corporate Information
Gayatri Projects Limited (“GPL”, “the Company”) is one of the largest infrastructure company executing works in several high growth sectors within the infrastructure space such as Roads, Irrigation, Rail, Airports Development, Power, Mining and Industrial works.
The Company is a public limited Company which is listed on two recognized stock exchanges in India. The registered office of the Company is located at B1, 6-31090, TSR Towers, Rajbhawan Road, Somajiguda, Hyderabad 500 082.
2.1 Of these, 16,96,248 Equity shares of Gayatri Energy Ventures Pvt. Ltd. (GEVPL) have been pledged to Catalyst Trusteeship Limited for the loan availed by the GEVPL and 48,27,482 Equity shares have been pledged to IDBI Trusteeship Limited for the loan availed by the company.
2.2 25,500 Equity shares of Bhandara Thermal Power Corporation Limited have been pledged to IL & FS is yet to be released by the IL & FS as the loan is repaid by the step-down subsidiary company.
2.3 All the Preference Shares held by the Company in Gayatri Hitech Hotels Ltd have been pledged to the consortium of the lenders of the company.
2.4 9% Non-convertible redeemable preference shares of M/s. Gayatri Hitech Hotels Ltd (GHHL) has been converted into 4% Compulsory convertible Cumulative Preference Shares (“CCCPS”). Further 3 bonus shares for every one CCCPS have been issued by GHHL during the year and the Company has sold 1,57,12,204 no. of CCCPS for a consideration of Rs.3,928.05 Lakhs
2.5 All the Equity Shares held by the company in Gayatri Sugars Limited have been pledged to the consortium of the lenders of the Company.
3 (a) Terms / 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.2/-. 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 shareholders.
3 (b) The company has raised an amount of Rs.200 crores by issuing 99,46,785 nos. Equity Shares of Rs.2/- each at a premium of Rs.199.07 through Qualified Institutional Placement.
3 (c) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:
3 (d) Details of shares held by the holding company, the ultimate holding company, their subsidiaries and associates: Nil
3 (e) Details of shares held by each shareholder holding more than 5% shares:
4.1 Equipment Loans
The Equipment loans are secured by hypothecation of specific equipments acquired out of the said loans and all these loans are guaranteed by directors. The rate of interest on these loans varies between 11% to 15%.
4.2 Term loans
The secured term loans are secured by hypothecation of construction equipments not specifically charged to other banks, immovable properties of group companies and personal guarantees of the promoter Directors. The rate of interest various between 11% to 13% with an average yield of 12.04% p.a.
4.3 External Commercial Borrowing:
Details of External Commercial Borrowings
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
(i) Equitable mortgage of immovable property of 600 acres in the name of step down subsidiary company.
(ii) Pledge of unencumbered equity shares of promoters in Gayatri Projects Ltd.
(iii) Personal guarantee of two promoter directors.
4.4 Vehicle Loans:
The Vehicle loans availed 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.
4.5 The unsecured loans from directors represents the dividend amount brought back by the promoter directors in compliance with the terms and conditions stipulated by the Lenders.
4.6 Current Maturities of long term borrowings have been disclosed under the head “Other Current Liabilities” (Refer Note - 20).
4.7 Interest amount of Rs.1,045.58 Lakhs for the month of March, 2018 debited on 31.03.2018 is due as on Balance Sheet date.
Nature of Security and Terms of Repayment
5.1 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.878.72 Lakhs for the month of March, 2018 debited on 31.03.2018 is due as on Balance Sheet date.
6. Other Notes forming part of the Financial Statements
6.1 Leases
Disclosure under Indian Accounting Standard - 17 “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 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 the Statement of Profit and Loss 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:
6.2 Impairment of Non-Financial Assets
In the opinion of the management, there are no impaired assets requiring provision for impairment loss as per the Ind AS 36 on “Impairment of Non Financial Assets”. The recoverable amount of building, plant and machinery and computers has been determined on the basis of ‘Value in use’ method.
6.3 Disclosure pursuant to Indian Accounting Standard (Ind AS) - 19 “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 Indian Accounting Standard - 19 issued by the Institute of Chartered Accountants of India are as under:-
6.4 Segment Reporting
The Company’s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Ind AS - 108. 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.
6.5 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.
6.7 There are no amounts due and outstanding to be credited to Investors Education & Protection Fund as on 31-03-2018 and amounts which are required to be transferred to such funds have been transferred.
6.8 Disclosure pursuant to Indian Accounting Standard - 11 “Construction Contracts”
Income is recognized on fixed price construction contracts in accordance with the percentage completion basis, which necessarily involve technical estimates of the percentage of completion, and costs to completion, of each contract / activity, on the basis of which profits and losses are accounted. Such estimates, made by the Company and certified to the Auditors have been relied upon by them, as these are of technical nature.
6.9 Capital Management
For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so that they can maximize returns for the shareholders and benefits for other stake holders. The aim is to maintain an optimal capital structure and minimize the cost of capital.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with other entities in the industry, the Company monitors its capital using the gearing ratio which is net debt divided by total equity.
6.10 Financial Instruments:
A. Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of the reporting period.
Financial Instruments by category.
Financial Assets and Financial Liabilities are the categories of Financial Instruments.
B. Fair value hierarchy
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or Liability.
6.11 Financial risk management objectives and policies
The Company’s activities expose it to a variety of financial risks like market risk, credit risk and liquidity risks. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
(i) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk, includes loans and borrowings.
a. Interest rate risk
Majority of the Non-current (Long Term) borrowings of the Company bear fixed interest rate, thus interest rate risk is limited for the Company.
b. Foreign Currency Risk:
The Company’s foreign Currency exposure i.e External Commercial Borrowings in US$ is completely hedged and the details are as follows:
c. Equity Price Risks:
Majority of the Company’s investments are made into non-listed equity securities. The Company’s exposure into listed equity investments is very limited and the fair value of listed securities as at 31st March, 2018 was Rs.113.25 Lakhs. Since the exposure into listed equity investments are very limited, the changes of equity securities price would not have a material effect on the profit or loss of the Company.
(ii) Credit risk management
Credit risk refers to the risk of default in its obligation by the counter party resulting in a financial loss. The maximum exposure of the financial assets is contributed by trade receivables, work-in-progress/ unbilled revenue, cash and cash equivalents and receivables from group companies.
Credit risk on trade receivables, work in progress/unbilled revenue is limited as the customers of the company mainly consist of the Government promoted entities, having strong credit worthiness. The company takes into account ageing of accounts receivables and the company’s historical experience of the customers and financial conditions of the customers.
(iii) Liquidity Risk:
Liquidity Risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s management and finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the senior management.
6.12 Pursuant to the introduction of the Goods and Service Tax (GST) w.e.f 1st July, 2017 all indirect taxes have got subsumed into GST. During the year, the company has executed various Construction Contracts/projects of NHAI /other state and central government Departments and in majority of the cases, the work orders for these contracts were issued under the erstwhile previous tax laws. The aforesaid government agencies/depts. are in the process of adopting a uniform billing system/policy for reimbursement of any additional burden on account of GST to the contractors. During the year, one of the government departments namely NHAI has issued a circular vide No NHAI/F&A/GST-2017-18/SM dated 04/10/2017, whereby it had agreed to reimburse the additional GST burden if any on the contracts, the company had filled the requisite documents before the NHAI for reimbursement of GST. The company has recognized impact of GST amount under other Current Assets as receivable.
6.13 The Company has earlier given interest bearing Inter-Corporate Deposits (ICDs) to non-related parties. Though the recovery of these ICDs is delayed during previous years, the company has recovered considerable amounts during the current year and the management is confident of recovering the balance amount in due course. In view of this, no provision for the same is required to be made during the year.
6.14 In the ordinary course of business, the Company has given advances to sub-contractors grouped under other current assets and the recovery of some of these advances got delayed due to reason that the corresponding contract works is yet to commence. In the opinion of the management, the said works for which advances are given have not commenced due to certain extraneous factors and delay is not attributed to sub-contractor default/failure. In view of this, the management is confident to commence the works in near future and recover the advances from the sub-contractors. Therefore, the advances are considered as good and recoverable and hence no provision is made.
6.15 M/s. Sai Maatarani Tollways Limited (erstwhile 100% subsidiary company), is a special Purpose Vehicle (SPV) incorporated for the purpose of execution of the project “Four Laning of Panikoili-Rimuli section of NH-215. An amount of Rs.224.94 crores as on 31.03.2018 is receivable from the said subsidiary company on account of additional cost incurred on the project in respect of EPC works executed by the company which is suitably considered by the said subsidiary company and requested the NHAI for additional financial support and as informed to the company, the proposal for additional financial support is reviewed and considered by the NHAI and hence, in the opinion of the management no provision is required to be provided in the books of accounts in respect of receivables amount and other amounts.
6.16 Disclosure pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of loans and advances in the nature of loans
6.17 Previous year figures are regrouped / reclassified to match with the current year presentation.
6.18 All amounts are rounded off to nearest Lakhs.
|