Gayatri Highways Ltd Directors Report.

To

The Members,

Your Directors have immense pleasure in presenting the 13th Annual Report and the Audited Financial Statements for the Financial Year ended 31st March 2019.

FINANCIAL SUMMARY:

A) STANDALONE

The standalone financial results of your company for the year ended 31st March 2019 are as follows:

Particulars For the year ended 31.03.2019 (Rs.) For the year ended 31.03.2018 (Rs.)
1) INCOME
Revenue from operations 15,04,23,716 7,69,27,595
Other income 10,57,50,563 11,26,11,970
TOTAL 25,61,74,279 18,95,39,565
2) EXPENDITURE
Operations & Maintenance Expenses 10,89,50,777 1,68,92,429
Employee Benefits Expense - 20,40,577
Finance Costs 34,42,67,073 50,28,17,758
Depreciation & Amortization expense 1,04,036 -
Other Expenses 41,51,530 2,10,67,145
TOTAL 45,74,73,416 54,28,17,909
3) Loss before tax from continuing operations (20,12,99,137) (35,32,78,344)
Current Tax - -
4) Loss for the year (20,12,99,137) (35,32,78,344)
Earnings (Loss) per Share – Basic & Diluted (0.84) (1.47)

B) CONSOLIDATED

The consolidated financial results of your company for the year ended 31st March 2019 are as follows:

Particulars For the year ended 31.03.2019 (Rs.) For the year ended 31.03.2018 (Rs.)
1) INCOME
Revenue from operations 129,82,54,168 86,10,96,475
Other income 9,01,77,242 9,93,47,586
Construction income - 193,00,29,848
TOTAL 138,84,31,410 289,04,73,909
2) EXPENDITURE
Construction Expenses - 192,99,15,369
Operations & Maintenance Expenses 16,17,60,462 5,68,64,909
Employee Benefits Expense 2,61,94,965 2,33,51,166
Finance Costs 343,55,58,302 246,70,02,653
Depreciation & Amortization expense 18,16,44,201 12,34,75,055
Other Expenses 18,23,26,936 13,55,48,292
TOTAL 398,74,84,866 473,61,57,444
3) Loss before tax from continuing operations (259,90,53,456) (184,56,83,535)
- Current Tax - -
4) Loss for the year (259,90,53,456) (184,56,83,535)
Other comprehensive income-
Re-measurement of the defined benefit plans (1,40,216) 7,10,821
Share of profits/ (losses) in the Jointly controlled entities (27,50,11,310) 18,84,27,095
5) Total comprehensive loss for the year (287,42,04,982) (165,65,45,619)
Earnings (Loss) per Share – Basic & Diluted (11.99) (6.91)

STATE OF COMPANYS AFFAIR :

During the year, the Company achieved revenue of Rs. 25.62 Crs and net loss of Rs. 20.13 Crs on a Standalone basis and the Consolidated revenue was Rs. 138.84 Crs and net loss after non controlling interests was Rs. 287.42 Crs. Further the Company is exploring new opportunities.

THE YEAR IN RETROSPECT

During the year under review, the Equity Shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited with effect from 28th June, 2018 and are open for trading.

FUTURE OUTLOOK

The Government of India is taking every possible initiative to boost the infrastructure sector. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from the Government. The present Projects and the opportunities in the Indian infrastructure sector provides good visibility towards a sustainable and profitable growth going forward.

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads and urban infrastructure development.

The traction that the countrys infrastructure development has seen in the last few years will, to our minds, continue in the future. Retail (CPI) inflation, projected by the RBI to remain below 4% up to end-2019, should facilitate a soft monetary policy in FY20. Additionally, the decisive market interventions of the central bank, the recent recapitalization of public sector banks and the ongoing resolution of chronic stressed asset cases through IBC give us reason for a broadly positive outlook.

Your company is steadfast in adopting modern technologies for better execution and improving the margins going forward.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business in your Company during the year under review.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure-I.

BOARD MEETINGS

During the year ended 31st March, 2019, six Board Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The dates on which the Board meetings were held are 7th April, 2018, 20th June, 2018, 23rd July, 2018, 13th August, 2018, 9th November, 2018 and 13th February, 2019.

Attendance of Directors at the meetings:

The details of the attendance of the Directors at the Board meetings held during the year ended 31st March, 2019.

Name of the Director Number of Board Meetings
Held Attended
Mr. P. Purnachander Rao* 4 4
Mr. M.V. Narasimha Rao 6 6
Mr. G. Jagannadha Rao 6 5
Ms. P. Laxmi 6 6

* Mr. P. Purnachander Rao resigned as the Director of the Company with effect from 5th October, 2018.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies and applied them consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT

Pursuant to the Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report is NOT APPLICABLE.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. M.V. Narasimha Rao was regularized as a Director in the category of Independent Director of the Company in the 12th AGM held on 28th September, 2018.

Mr. G. Jagannadha Rao was regularized as a Director in the category of Independent Director of the Company in the 12th AGM held on 28th September, 2018.

Ms. P. Laxmi was regularized as a Director in the category of Independent (woman) Director of the Company in the 12th AGM held on 28th September, 2018.

Mr. P. Purnachander Rao was resigned as the Director of the Company with effect from 5thOctober, 2018.

RETIREMENT BY ROTATION

Directors are not required to retire by rotation.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Nomination and Remuneration (N&R) Committee discusses and decides the appointment of the Board of Directors and Key Managerial Personnel and their remuneration. The committee was constituted on 7th February, 2018.

The Committee is headed by Mr. G. Jagannadha Rao as a Chairman and Mr. M.V. Narasimha Rao and Ms. P. Laxmi as members of the Committee.

During the financial year ended 31st March, 2019, one meeting washeld by the Nomination and Remuneration Committee on 7th April,2018.

The Nomination, Remuneration & Evaluation Policy is enclosed as an Annexure-II.

AUDITORS REPORT

There are no qualifications in the Auditors Report.

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.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The company has not entered into any Contract or arrangements with the Related Parties as on 31st March, 2019. Accordingly, Form AOC-2 is not applicable to your Company.

TRANSFER OF AMOUNT TO RESERVES

The Company has not made any profits for the Financial Year ended 31st March, 2019. Therefore it has not transferred any amount to reserves.

DIVIDEND

The Board of Directors does not recommend any dividend on the Equity Shares or Preference Shares for the financial year ended 31st March, 2019.

MATERIAL CHANGES AND COMMITMENTS

During the year under review, the Equity Shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited with effect from 28th June, 2018 and are open for trading.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY: Not Applicable

i) the steps taken or impact on conservation of energy;

ii) the steps taken by the company for utilising alternate sources of energy;

iii) the capital investment on energy conservation equipments;

B. TECHNOLOGY ABSORPTION: Not Applicable

i) the efforts made towards technology absorption;

ii) the benefits derived like product improvement, cost reduction, product development or import substitution;

iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

iv) the expenditure incurred on Research and Development.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Not Applicable

Total Foreign Exchange Earned: Nil

Total Foreign Exchange Outgo: Nil

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has implemented a standard operating procedure for all accounting and financial matters to reduce accounting and financial risk to minimal levels and to ensure that the financial statements are free of material misstatements.

The Company has implemented a risk management policy and has constituted a Corporate Risk Management Committee to comply the provisions of the Companies Act, 2013.

The Committee is headed by: Mr. G. Jagannadha Rao as a Chairman and Ms. P. Laxmi and Mr. M.V. Narasimha Rao, as members of the Committee.

The Committee meetings will be held as and when required by the Company.

POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR

The Company has constituted Corporate Social Responsibility Committee to comply the provisions of the Section 135 of the Companies Act, 2013.

The Corporate Social Responsibility committee was constituted as follows:

Mr. M.V. Narasimha Rao – Chairman
Mr. G. Jagannadha Rao – Member
Ms. P. Laxmi – Member

The Committee meetings are held as and when required by the Company.

Since there are no profits in the Company for the preceding 3 years, the company has not spent any amount towards Corporate Social Responsibility.

The Corporate Social responsibility policy of the Company is annexed herewith as Annexure-III.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Indian Accounting Standards Ind AS – 110, Ind AS – 28 and Ind AS 31 issued by the Institute of Chartered Accountants of India and specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014; your Directors have pleasure in attaching the Consolidated Financial Statements for the financial year ended 31st March 2019, which forms part of the Annual Report and accounts.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.gayatrihighways.com and a copy of separate audited financial statements of its subsidiaries will be provided to shareholders upon their request.

SUBSIDIARY COMPANIES, JOINTLY CONTROLLED ENTITIES AND ASSOCIATE COMPANIES

During the Financial Year ended 31st March 2019, your Company has four subsidiaries, one associate Company and three joint venture companies.

We would like to inform you that our wholly owned subsidiary M/s. Sai Maatarini Tollways Limited has terminated its Concession agreement with National Highways Authority of India (NHAI) due to the Force Majeure (Political event).

The Concession agreement was made to construct four-laning road of Panikoili-Rimuli section of NH-215 from Km 0.00 to Km 163.00 (Design length 166.173 km) in the state of Odisha under NHDP phase-III as BOT (Toll) on DBFOT pattern.

The names of companies which have become the Companys Subsidiaries, joint ventures or associate companies during the year are as follows:

Subsidiaries:

Indore Dewas Tollways Limited

Sai Maatarini Tollways Limited

Gayatri Jhansi Roadways Limited

Gayatri Lalitpur Roadways Limited

Associates:

Balaji Highway Holdings Private Limited

Jointly Controlled Entities:

Hyderabad Expressways Limited

Cyberabad Expressways Limited

HKR Roadways Limited

A statement containing salient features of the financial statements of subsidiaries/ associate companies/ joint ventures in Form AOC - 1 is enclosed herewith as Annexure-IV.

During the Financial Year, no company is ceased to be the Companys Subsidiary, joint venture or associate company.

PERFORMANCE AND CONTRIBUTION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As per Rule 8 of Companys (Accounts) Rules, 2014 a Report on the financial performance of subsidiaries, associates and joint venture companies along with their contribution to the overall performance of the Company during the Financial Year ended 31st March, 2019 is enclosed as Annexure-V.

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

STATUTORY AUDITORS

M/s G.S. Sai Babu & Associates, Chartered Accountants, bearing ICAI Regd. No. 014207S, were appointed as statutory auditors of the Company to hold office from the conclusion of 11th Annual General Meeting till the conclusion of the 16th Annual General Meeting.

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has ensured that appropriate policies and procedures are adopted for ensuring orderly and efficient conduct of the business, including adherence to Companys policies, the safeguarding of its assets, prevention and detection of fraud and error, the accuracy and completeness of accounting records, and the timely preparation of reliable financial information. The Company has Internal Financial Controls with reference to the Financial Statements commensurate with the size of the operations of the Company and adequate and operating efficiently.

SHARE CAPITAL

The Paid-up Share Capital of the Company as on 31st March, 2019 is Rs. 2,156,306,800 divided into 239,651,900 Equity Shares of Rs.2/- each fully paid up and 167,700,300 9% Non convertible Cumulative Redeemable Preference shares (NCRPS) of Rs. 10/- each.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this Report and provides details of the overall industry structure, developments, performance and state of affairs of the Companys various businesses viz., infrastructure BOT, Annuity projects and their adequacy, Risk Management Systems and other material developments during the financial year. The Management Discussion and Analysis Report for the financial year under review, as stipulated under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, is enclosed as Annexure-VI.

CEO AND CFO CERTIFICATION

The annual certification given by the Chief Executive Officer and Chief Financial Officer of the Company is published in this Annual Report.

SECRETARIAL AUDITORS REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed DVM & Associates LLP, Practicing Company Secretaries as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2019.

The Secretarial Audit Report issued by DVM & Associates LLP, Practicing Company Secretaries in Form MR-3 is enclosedas Annexure-VII.

The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks.

BOARDS RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARKS OR DISCLAIMER MADE

There are no qualifications, reservations or adverse remarks made by the statutory auditors in their report or by the Practicing Company Secretary in the Secretarial Audit Report for the year.

During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.

INTERNAL AUDITORS

The Board of Directors of the Company has appointed Mr. Raju Poojari, Chartered Accountant (Rep. by Shalang Advisory Services (OPC) Pvt. Ltd.,) as an Internal Auditor in the Board meeting held on 20thJune, 2018 with effect from 1st April, 2018 to conduct Internal Audit of the Company.

MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OF THE COMPANIES ACT, 2013

The provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 is not applicable to the Company.

AUDIT COMMITTEE
The Audit Committee consists of the following Directors:
Mr. M.V. Narasimha Rao - Chairman
Mr. G. Jagannadha Rao - Member
Ms. P. Laxmi - Member

During the financial year ended 31st March, 2019, 4 meetings were held by the Audit Committee on 20th June, 2018, 13th August, 2018, 9th November, 2018 and 13th February, 2019.

There has been no such incidence where the Board has not accepted the recommendation of the Audit Committee during the year under review.

CORPORATE GOVERNANCE REPORT

A separate report on Corporate Governance is enclosed as Annexure-VIII as a part of the Annual Report along with the certificate from the Practicing Company Secretary on its compliance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanism for the Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of vigil mechanism is available on the Companys website.

The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company are covered under the Whistle Blower Policy.

MEETING OF INDEPENDENT DIRECTORS

In accordance with the provisions of schedule IV (Code for Independent Directors) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, a meeting of the Independent Directors of the Company was held in the financial year on 13th February, 2019, without the attendance of Non-Independence Directors and members of the management.

DISCLOSURE AS PER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The provisions of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 is not applicable to the Company.

ENVIRONMENT, HEALTH AND SAFETY

The Company considers it is essential to protect the Earth and limited natural resources as well as the health and well being of every person.

The Company strives to achieve safety, health and environmental excellence in all aspects of its business activities. Acting responsibly with a focus on safety, health and the environment is a part of the Companys DNA.

INDIAN ACCOUNTING STANDARDS (IND AS)

The Company has adopted Indian Accounting Standards (Ind AS) with effect from the Financial Year 2016-17 pursuant to Ministry of Corporate Affairs notification of the Companies (Indian Accounting Standards) Rules, 2015.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Your Company lays emphasis on competence and commitment of its human capital recognizing its pivotal role for organizational growth.During the year, the Company maintained a record of peaceful employee relations.

Your Directors wish to place on record their appreciation for the commitment shown by the employees throughout the year.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited with effect from 28th June,2018 and are open for trading.

ACKNOWLEDGEMENTS

We express our sincere appreciation and thank our valued Shareholders, Customers, Bankers, Business Partners/ Associates, Financial Institutions, Insurance Companies, Central and State Government Departments for their continued support and encouragement to the Company.

We are pleased to record our appreciation of the sincere and dedicated services of the employees and workmen at all levels.

For and on behalf of the Board
Place: Hyderabad M.V. NARASIMHA RAO G. JAGANNADHA RAO
Date: 13th August, 2019 DIRECTOR DIRECTOR
DIN: 06761474 DIN:01059819