To the Members
The Board of Directors present the 33rd Board's Report of the Company together with the summary of standalone and consolidated financial Statements for the year ended 31st March, 2022.
Financial Results:
Rs In Lakhs
Review of Operations:
Your Company, Gayatri Projects has achieved revenue of H 3102.34 crores in FY2022 as against H 3900.52 crores in the previous year on a standalone basis. The revenue from operations has declined by 20.46% in FY2022 when compared to the last year due to working capital stress on account of Covid pandemic, countrywide lockdown and delay in receivables from the State Government Departments.
Your Company has incurred losses of H 788.37 crores before exceptional items/taxes for the current financial year as against profit of H 51.22 crores in the previous year. The main reasons for incurring the losses are on account of increase in materials cost, increase in cost of overheads, non-availability of adequate working capital to execute the works on hand, non-awarding of fresh contract works due to lenders reluctant to provide bank guarantee etc., have severely affected the business operations of the company. As a result, the Company has defaulted in repayment of dues to its lenders and devolvement of significant Non-Fund based facilities has happed and most of the lenders have recalled their financial facilities extended to the company. The loans and other facilities sanctioned to the company have been classified by the lenders as Non-Performing Assets (NPA).
During the current financial year, the National highways Authority of India (NHAI) has unilaterally and arbitrarily invoked the bank guarantees given in favour of it in respect of mobilization advances given by NHAI for Varanasi road project. The NHAI has also charged huge interest on the mobilization advance which is contested by the company. In similar manner, Ministry of Road Transport & Highways (MORTH) has charged interest on mobilization advance which has been contested by the company. In order to follow prudence concept of accounting, the said interest amount of H 140.51 crores, which was otherwise recoverable from the NHAI & MORTH has been charged to the profit & loss account as exceptional item in the current financial year. The management of the company, is confident to recover the interest charged by the above clients in future claims.
The Company lenders have also filed petitions/legal suits/complaints before the Debt Recovery Tribunal (DRT)/other forums for recovery of the dues and issued notices under SARFAESI Act. Further, two lenders of the company, one corporate creditor and two operational creditors have filed applications under the Insolvency and Bankruptcy Code, 2016 before the Hon'ble National Company Law Tribunal (NCLT), Hyderabad. The applications filed before the Hon'ble NCLT are not admitted till the date of Board Report. The management of the company is taking appropriate legal and other steps to the notices received from various lenders, petitions filed before the DRT, and applications filed before the Hon'ble NCLT. The management is confident to resolve all these issues at the earliest in the best interest of the company's affairs, business operations, and lender's business interests.
Future Outlook:
Your company has appointed a leading consultant as Corporate Debt Advisors for Debt Restructuring proposal/ amicable debt settlement proposal in the best interest of the company, lenders and stakeholders. The Company is also discussing with various financial investors for raising the equity and your company has received the non-binding expression of interest from one of the investor. Hence, the management of your company is very confident of reviving the company from current financial crisis and resolving the debt default issues at the earliest.
Applications filed under Insolvency and Bankruptcy Code, 2016:
As on date of signing of the Boards Report, two lenders of the company, one corporate creditor and two operational creditors have filed applications under the Insolvency and Bankruptcy Code, 2016 before the Hon'ble National Company Law Tribunal (NCLT), Hyderabad.
The applications filed before the Hon'ble NCLT are not admitted as on the date of this report.
Dividend:
For the financial year 2021-22, the Company has not declared any dividend due to losses in the FY 202122. Therefore, due to continued financial stress in the Company, your Board of Directors does not recommend any dividend for the Financial Year ended March 31, 2022.
Reserves:
There are no profits for transfer to reserves for the FY2021-22.
Management Discussion & Analysis:
Management Discussion and Analysis Report, as required in terms of SEBI (LODR) Regulation, is annexed which forms part of this Report as Annexure -1.
Dividend Distribution Policy:
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ('SEBI Listing Regulations') the Board of Directors of the Company (the 'Board') formulated and adopted the Dividend Distribution Policy ('Policy'). In compliance of the SEBI Listing Regulations, the Policy is annexed as Annexure - 2 and is also available on the Company's website at: https://www.gayatri.co.in/pdf/GPL
Dividend Distribution Policy.pdf
Share Capital:
During the period there were no changes in the share capital of the Company. The Authorised share capital of the company is H 80,00,00,000 divided into 40,00,00,000 equity shares of H 2/- each and the paid- up share capital of the Company is H 37,43,97,370 divided in to 18,71,98,685 Equity shares of H 2/- each.
Material Changes and Commitments affecting the Financial Position of the Company:
In view of the COVID-19 pandemic situation, the operations of the company are affected and there are delays in receivables from various State Governments. Due to this your company is facing severe cash flow mismatch and finding it difficult to pay the lenders dues. As a result of this, the Company has defaulted in repayment of dues to its lenders and devolvement of significant Non-Fund based facilities has happed and most of the lenders have recalled their financial facilities extended to the company. After this, the lenders have initiated forensic audit. The final forensic audit report is awaited as on the date of Board's report. Your Company is putting all efforts to improve the cash flows and regularize the lenders account at the earliest. Your company is confident to overcome the present financial crisis.
National Highways & Infrastructure Development Corporation Ltd has terminated the work of four lining of existing Dimapur - Kohima Road work on 1st June 2021 due to slow progress and invoked performance and mobilization advance bank guarantees amounting to H 46.70 crores. Your Company has invoked the arbitration clause under the agreement and claimed amount of H 202.79 crores as claim under provisions along with interest at SBI PLR+2% and cost. The arbitration tribunal has been formed and the hearings are in progress.
NHAI vide its letter dated 10.06.2021 has declared your company, Gayatri Projects Limited (GPL), as non-performer for the period till the defects are not completely rectified in the Sultanpur to Varanasi PKG- I and II and prohibited the Company from bidding for ongoing/future projects of NHAI till the notified defects are satisfactorily cured. Your Company has rectified most of the defects and has requested NHAI to lift the non-performer tag and NHAI officials have instructed local project officials to verify the rectification works carried out by your company and submit the report. The NHAI is expected to lift the prohibition on bidding soon.
There is no change in the nature of business of the Company during the year under review.
Board Meetings:
The Board of Directors met 9 times in the Financial Year 2021-22 on June 05, 2021, June 14, 2021, August 05, 2021, August 13, 2021, September 22, 2021, October 23, 2021, November 13, 2021, February 14, 2022 and March 15, 2022.
Directors
Reappointment of Director retiring by rotation - In terms of provisions of the Companies Act, 2013, Mr. J. Brij Mohan Reddy (DIN: 00012927), Vice Chairperson and Executive Director of the Company, retires at the ensuing Annual General Meeting and being eligible, seeks reappointment.
The necessary resolution for retiring by rotation for Mr. J. Brij Mohan Reddy forms part of the Notice convening the AGM scheduled to be held on Tuesday, September 27, 2022. The profile and particulars of experience of the above proposed existing director for Board membership, are disclosed in the said Notice.
Directors and Key Managerial Personnel:
During the year, the following changes took place in the Directors and Key Managerial Personnel of the Company:
The Company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations, that he / she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The Company has also received declaration from Independent Directors that they are in compliance with sub-rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
Composition of Audit Committee:
The Company has constituted a Audit Committee as per the requirement of Companies Act, 2013 and SEBI Listing Regulations. The Audit Committee of the Board of Directors is as follows:
The details of Audit Committee meeting and other details are given in corporate governance report. The Board has accepted all the recommendations of the Audit Committee made during the year.
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 salient features of the Policy are:
- It ensures that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully.
- It lays down Relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
- It formulates a criteria for determining qualifications, positive attributes and independence of a Director.
- It contains guidelines for determining that the remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
- To recommend to the Board policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.
During the year under review, basis the amendment in SEBI (LODR) Regulations, 2015, as amended, the amended policy was adopted by the Board on February 14, 2022. The Nomination Remuneration and Evaluation Policy of the company is available at website of the Company at https://www.gayatri.co.in/pdf/ Remuneration Policy 15-02-2022.pdf.
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. Based upon structured questionnaire, which was prepared after taking into consideration various parameters such as attendance and participation in meetings by the directors, corporate governance practices, independence of judgment, safeguarding the interests of the company etc., the evaluation was carried out by the Committee. The Members of the Committee evaluated the individual directors at its meeting held on 14.02.2022.
The Nomination and Remuneration Committee decided that since the performance of the directors has been satisfactory, it was decided to continue with the term of the directors, the Managing Director, the Executive Director and the Independent Directors.
(b) Separate Meeting of Independent Directors:
The Independent directors of the Company at its meeting held on 14.02.2022 (a) reviewed the performance of the Board and non-independent directors (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, on the date of the meeting, attended the meeting.
The Independent Directors reviewed the performance of the board, non-Independent Directors (including Managing Director and Whole time Director) and found it to be satisfactory, opined that term of their appointment be continued.
The Independent Directors after review of the performance of the Chairperson, decided that the Chairman has good experience, knowledge and understanding of the Board's functioning and her performance is satisfactory. The Independent Directors decided that the information flow between the Company's Management and the Board is adequate.
Director's Responsibility Statement:
In pursuance of section 134 (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 Associates and Joint Ventures:
The Company has 2 (Two) subsidiary companies (including step down subsidiary) and 1 (one) associate company as on 31st March, 2022 as per the Companies Act, 2013. During the year under review, the Board of Directors reviewed the affairs of material unlisted subsidiary.
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 prepared in Form AOC-1, are given in Annexure- 3.
In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing Regulations, the audited Financial Statements, including the consolidated financial statements and related information of the Company and financial statements of the subsidiary companies are available on our website www.gayatri.co.in.
The company has adopted the policy for determining 'material' subsidiaries and the same has been placed on the website of the company at https://www. gayatri.co.in/pdf/Policy_For_Determining_Material_ Subsidiaries.pdf
Annual Return:
The Annual Return for financial year 2021-22 as per provisions of the Act and Rules thereto, is available on the Company's website at https://www.gayatri.co.in/ pdf/annual-return/MGT_7_2021-22.pdf
Consolidated Financial Statements:
In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in compliance with the provisions of Section 129(3) and other applicable provisions of the Companies Act, 2013 and Ind AS-110 and other applicable
Accounting Standards, your Directors have presented the consolidated financial statements for the financial year ended March 31, 2022, which forms part of the Annual Report.
Statutory Auditors and Their Report:
At the 29th AGM held on September 28, 2018 the Members approved appointment of M/s. M O S & Associates LLP, Chartered Accountants, (Firm Registration No. 001975S/S200020) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 34th AGM.
In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors.
The Auditor's Report to the members of the Company for the Financial Year ended March 31, 2022 does not contain any qualification(s). The report of the Statutory Auditors forms part of this report. During the year under review, the Statutory Auditors did not report any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act. The emphasis of matter reported by the Statutory Auditors is self-explanatory and do not call for further comments.
Secretarial Audit:
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, 2022 in Form No. MR-3 is annexed to the Directors Report as Annexure - 4 and forms part of this Report. The Secretarial Auditors' Report to the Members of the Company for the Financial Year ended March 31, 2022 does not contain any qualification(s) or adverse observations. The other observations/comments are self-explanatory.
Disclosures:
a) Deposits
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
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 with reference to the financial statements 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.
Risk Management:
The Company has a risk management committee in place. 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 and has been hosted on the website of the Company at https://www.gayatri.co.in/pdf/ Whistle%20Blower%20Policy.pdf.
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 thereunder, the Company has not received any complaint of sexual harassment during the year under review. The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the Act.
Complaints received, disposed and pending during the year:
Corporate Social Responsibility:
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-5 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 https://www.gayatri. co.in/pdf/CorporateSocialResponsibilityPolicy.pdf.
Significant & Material Orders Passed by the Regulators:
There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company's future operations. However, Members' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.
Contracts or Arrangements with Related Parties:
During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm's length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm's length basis. The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act. Also, there were no material related party contracts entered into by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for financial year 2021-22 and hence does not form part of this report.
Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone / consolidated financial statements forming part of this Annual Report.
In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company's website at https://www. gayatri.co.in/pdf/Related%20Party%20Transaction%20 Policy.pdf.
Deposits:
Your Company has not accepted or renewed any deposit from public during the year under review. Further, no amount on account of principal or interest on deposit from public or interest on deposits from public was outstanding as on the date of the balance sheet.
Cost Audit:
In terms of Section 148 of the Act, the Company is required to maintain cost records and have audit of its cost records conducted by a Cost Accountant. Cost records are prepared and maintained by the Company as required under Section 148(1) of the Act.
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 2021-22 and re-appointed for the F.Y 2022-23 by the Board of Directors on the recommendations of the Audit Committee. They have been conducting the Audit of the cost records of the Company for the past several years. In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration of H 1.15 lakhs plus applicable taxes and reimbursement of out- of-pocket expenses payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the Members of the Company. Accordingly, a resolution to this effect forms part of the Notice convening the AGM.
Particulars of Employees:
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure-6.
In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the said Rules forms part of this report.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2022-2023 to National Stock Exchange of India Limited and BSE Limited where the Company's Shares are listed. Annual Custody / Issuer fee is being paid by the Company based on invoices received from the Depositories.
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 -7. Certificate from the practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under aforesaid regulations is attached to Corporate Governance Report.
Business Responsibility Report
As per Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report covering the principle wise performance of the Company on the nine principles as per National Voluntary Guidelines (NVGs) forms a part of the Annual report of the Company, annexed as Annexure -8.
Secretarial Standards
The company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.
Acknowledgement:
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.