(ii) Rights, preferences and restrictions attached to equity shares:
The Company has one class of equity shares having a par value of ' 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend. 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 number of equity shares held by the shareholders.
(iii) Rights, preferences and restrictions attached to preference shares:
a) 25,000,000 - 6% Cumulative redeemable preference shares of ' 10 each are due for redemption on or before 30 September,2023.
b) Variation in terms of 9,536,813 - 6% Cumulative redeemable preference shares of ' 10 each which were due for redemption on April 1, 2017 are as under:
i) Waiver of arrears of preference dividend till 1st April 2017.
ii) Period of redemption extended from April 1, 2017 to April 1, 2029 with an early redemption right to the Company before the extended period of 12 years by giving 30 days notice.
These terms were approved by Preference shareholders vide resolution dated 30 March, 2017.
c) Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares of Rs, 10 each which were due for redemption on 1 April, 2015, are as under:
i) Waiver of arrears of preference dividend till 1 April, 2015.
ii) Changing the nomenclature to 6% cumulative redeemable preference shares of Rs, 10 each w.e.f. 1 April, 2015.
iii) Period of redemption extended from 1 April, 2015 to 1 April, 2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.
These terms were approved by preference shareholders vide resolution dated 20 March, 2015.
v) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:
a) Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011
b) 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011
vii) Arrears of fixed cumulative dividends on preference shares :
Dividend on 6% cumulative redeemable preference shares- Rs, 436.86 lakhs (31 March, 2016 Rs, 762.18 lakhs).
Details of security for the short - term borrowings :
(i) First charge on all chargeable current assets of the Company (viz.) sugar, molasses, bagasse, stores and spares, extra neutral alcohol, rectified spirit and receivables on pari-passu basis with other members of the consortium lenders.
(ii) Second charge on the Company's present and future fixed assets (both moveable and immovable) of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Kamareddy District and sugar unit located at Maggi village, Kamareddy District of Telangana State on pari-passu basis with the other members of the Consortium, SDF and NCD holders.
(iii) First pari pasu charge on pledge of 79 lakh shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy, on pari-passu basis with other members of the consortium lenders.
(iv) Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy.
*The The Company had made the provision towards preference dividend (6% Cumulative redeemable preference shares) of Rs, 57.22 lakhs and dividend distribution tax thereon of Rs, 8.03 lakhs during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and was in the process of obtaining consent for not remitting the same. Subsequently, the Company has remitted the amount to the preference shareholder.
Note : Margin money deposits amounting to Rs, 1.51 lakhs (As at 31 March, 2016 : Rs, Nil) which have a maturity of more than twelve months from the balance sheet date have been classified under other noncurrent assets [Refer Note. 14].
During the year, the Company has specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November, 2016 to 30 December, 2016. The denomination wise SBNs and other notes as per the notification is given below : in '
1.Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
Based on the information available with the Company, there are no dues / interest outstanding to micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at 31 March, 2017 (As at 31 March, 2016 : Nil)
2. The cane development incentive will be paid by the company to encourage farmers to harvest the sugar crop and supply sugarcane to the Company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.
Note 27 Employee benefit plans
(a) Defined contribution plans
The Company makes provident fund to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs, 87.00 lakhs (31 March, 2016: Rs, 81.93 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
(b) Defined benefit plans
The Company offers the following employee benefit schemes to its employees:
i. Gratuity (Unfunded)
ii. Compensated Absences
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Note 3. Related party disclosures
(i) Names of the related parties and their relationship:
Description of relationship Names of related parties
Promoter / Shareholder Dr. T Subbarami Reddy
Key Management Personnel (KMP) Smt. T. Indira Subbarami Reddy - Director
Sri. T.V. Sandeep Kumar Reddy -Vice Chairman Smt. T. Sarita Reddy- Executive Director Mr. V.R. Prasad - Chief Financial Officer Ms. Munmun Baid - Company Secretary
Enterprises in which KMP / Relatives of KMP Gayatri Projects Limited
can exercise significant influence. TSR Holdings Private Limited
Deep Corporation Private Limited Gayatri Fin-Holdings Private Limited Gayatri Hi-tech Hotels Limited Gayatri Capital Limited Gayatri Leasefin Private Limited T. Gayatri Engg. Co. Private Ltd T. Rajeev Reddy Real Estates Developers Pvt. Ltd. T. Anirudh Reddy Builders & Developers Pvt. Ltd. Maheswari Hotels & Theatres Private Limited Maheswari Film Productions Private Limited Indira Publications Private Limited Parameshwari Land Holdings Private Limited Gayatri Property Ventures Private Limited Gayatri Urban Ventures Private Limited Sandeep Housing Developers Private Limited Gayatri Realty Ventures Private Limited Indira Realty Holdings Private Limited Maheswari Townships Private Limited Sarita Land Holdings Private Limited Gayatri Contech Private Limited Indira Constructions Private Limited Gayatri Hotel Ventures Private Limited Gayatri Hotels and Theatres Private Limited Gayatri Tissue & Papers Limited Gayatri Bio Organics Limited Indira Energy Holdings Private Limited Trust under Common Management TSR Foundation
Note: Related parties have been identified by the Management.
Note 4. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.
Note 5."The Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company's writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 2016 ('the Order') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. During the year, the Company filed a Special Leave Petition (SLP) in the Hon'ble Supreme Court which dismissed the SLP vide order dated September 27, 2016 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @15 paisa per unit. The Hon'ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT."
The Company has treated the estimated duty amount aggregating Rs, 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavorable verdict in this matter, the Management based on the Supreme Court's interim orders and considering the inherent uncertainty in predicting the final outcome of the above litigation estimates the impact of the potential liability to be Rs, 170.39 lakhs.
In view of the above, the auditors have made a qualification in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.
Note 6. Over the last few years, the Company has been incurring losses and as at March 31, 2017 the accumulated losses amounting to Rs, 12,804.58 lakhs (Previous year Rs, 13,884.97 lakhs) have completely eroded the net worth and, its current liabilities exceeded the current assets as on that date. The Sugar Companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost.
Owing to the complete erosion of the net-worth of the Company, the Board of Directors, in their meeting held on August 14, 2015 decided to make a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial and Financial Reconstruction (BIFR) which in their hearing held on October 19, 2016 declared the Company as a Sick Industrial Company under section 3 (1) (0) of SICA, 1985. The BIFR appointed IDBI as the Operating Agency (OA) and the Company was required to submit the Draft Rehabilitation Proposal to the OA within a period of 8 weeks and the next date of hearing by the BIFR was fixed on December 27, 2016. Consequent to the repeal of SICA w.e.f. December 1, 2016, the case filed by the Company under the BIFR stands abated and the Company has an option to file a revised petition within 180 days before the NCLT. Based on the discussions with several lenders/Banks, the Company has decided not to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, before the NCLT.
The financial results have been prepared on a going concern basis, based on a Comfort letter provided by the promoters for continued support to the Company to meet its financial obligations, in order to enable the Company to continue its operations in the foreseeable future.
Note 7. Exceptional item
(a) Exceptional item for the quarter and year ended March 31, 2017 represents liability no longer required and written back of Rs, 150.47 lakhs relating to non-fulfillment of contractual obligations/damages.
(b) Exceptional item for the year ended March 31, 2016 - The Telangana State Electricity Regulatory Commission (TSERC) passed the final order on September 18, 2015 for upward revision of tariff in favor of the Company in respect of energy exported in the earlier years. On receipt of the TSERC order, the Company recognized the differential revenue of Rs, 227.40 lakhs, which amount was also received.
Note 8. In the earlier years the Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring ('CDR') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense ('ROR') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme.
During the quarter and year ended March 31, 2017, the Company has allotted 69,50,500 Secured Unlisted Non-Convertible Debentures (NCD) of Rs, 10/- each at a coupon rate of 4% to the Banks.
Note 9. The tenure of appointment of the Executive Director (designated as a Managing Director w.e.f August 29, 2016) ended on April 30, 2016. The Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 20, 2016, approved the appointment and payment of remuneration for a period of three years with effect from May 1, 2016 on the same terms of earlier appointment. The said appointment and payment/provision of remuneration was approved by the shareholders in the Annual General Meeting held on September 26, 2016. The Company has sought the necessary approval from Central Government, whose response is pending.
Note 10. Financial Reporting Process : The Management conducted an assessment of the effectiveness of the internal control over financial reporting using the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on this assessment, Management defied deficiencies in the internal control over financial reporting, that constitute material weaknesses, in respect of certain reconciliations between various accounting systems and the period - end adjustments.
The Company uses various subsystems, the output from which, is being used for accounting in the financial package maintained by the Company. Consequent to certain deficiencies in IT General and Application controls in the software platforms used for financial reporting, there were differences in balances between sub-systems / sub- ledgers with the general ledger, which have been manually reconciled by the Company. Whilst necessary adjustment entries were passed in the books of account for the year ended 31st March 2017, and these material weakness did not affect on the financial statements, except assessment of estimating the liability on a disputed matter. The management of the view that the Electricity Duty applicable on Captive consumption is a contingent in nature and no provision is required to be made.
Note 11. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.
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