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Directors Report of GMR Infrastructure Ltd.

Mar 31, 2016

Dear Shareholders,

The Board of Directors present the 20th Annual Report together with the audited financial statements of the Company for the Financial Year (FY) ended March 31,2016.

Financial Results and state of the Company''s affairs

Your Company, as a holding company, operates in Airports, Energy, Transportation and Urban Infrastructure business sectors through various subsidiaries, associates and jointly controlled entities. The Company has Engineering, Procurement and Construction (EPC) business as a separate operating division to cater to the requirements of implementing the projects undertaken by the subsidiaries and others, including Railway projects.

Analysis of the Company''s audited consolidated and standalone financial results are given below:

(Rs. in Crore)

Particulars Consolidated Standalone March 31, 2016 March 31,2015 March 31,2016 March 31, 2015

Revenue from operations 13,357.66 11,087.68 799.10 649.74

Revenue share paid / payable to concessionaire grantors (2,412.29) (2,064.86) - -

Operating and administrative expenditure (6,700.73) (6,468.18) (210.91) (200.03)

Other Income 454.27 327.46 15.07 19.48

Finance Costs (4,057.69) (3,571.86) (514.88) (537.29)

Depreciation and amortisation expenses (2,266.16) (1,812.53) (15.77) (20.03)

(Loss)/Profit before exceptional items, tax expenses, minority interest and (1,624.94) (2,502.29) 72.61 (88.13) share of (loss)/ profit of associates

Exceptional Items:

Profit on sale of subsidiaries/jointly controlled entities 2.31 34.44 - -

Loss on impairment of assets in subsidiaries (164.30) (115.74) - -

Reimbursement of expenses pertaining to earlier years received by a subsidiary 51.42 - - -

Loss on account of provision towards claims recoverable - (130.99) - -

Breakage cost of interest rate swap - (91.83) - -

Prcyvision for diminution in value of investments /advances in subsidiaries / associates (39.22) - (1,576.93) (262.40)

(Loss)/Profit before tax expenses, minority interest and share of (loss)/ profit (1,774.73) (2,806.41)(1,504.32) (350.53) of associates

Tax expenses (224.21) (152.81) (14.58) (2.12)

(Loss)/Profit before minority interest and share of (loss)/ profit of associates (1,998.94) (2,959.22)(1,518.90) (352.65)

Share of (loss/profit from associates (5.52) (12.98) - -

Minority interest - share of profit/(loss) (156.54) 238.91 - -

Net (Loss)/Profit after tax, minority interest and share of loss from associates (2,161.00) (2,733.29)(1,518.90) (352.65)

Net (deficit) / surplus in the statement of profit and loss - Balance as per last (4,006.89) (1,183.56) 62.81 429.37 financial statements

Transfer from debenture redemption reserve 34.38 46.25 34.38 46.25

Surplus / (Deficit) available for appropriation (6,133.51) (3,870.60)(1,421.71) 122.97

Appropriations (63.78) (136.29) (38.50) 60.16

Net deficit in the statement of profit or loss (6,197.29) (4,006.89)(1,460.21) 62.81

Earnings per equity share (Rs.) - Basic and diluted (per equity share of Rs. 1 each) (3.82) (6.46) (2.68) (0.83)

Consolidated financial results

Improved operating performance in Airport and Energy sectors and commissioning of GMR Chhattisgarh Energy Limited (GCHEPL) and GMR Rajahmundry Energy Limited (GREL) power plants resulted in consolidated revenue increasing from Rs. 11,087.68 Crore in the previous year to Rs. 13,357.66 Crore in the current year. Airport, Energy, Highways, EPC and other segments contributed Rs. 6,540.58 Crore (48.97%), Rs. 5,522.55 Crore (41.34%), Rs. 761.41 Crore (5.70%), Rs. 179.13 Crore (1.34%) and Rs. 354.04 Crore (2.65%) respectively to the consolidated revenue from operations.

Increase in operational cost, finance cost and depreciation charge was mainly on account of commissioning of GCHEPL and GREL power plants and operating GMR Vemagiri Power Generation Limited (GVPGL), GMR Warora Energy Limited (GWEL) and GMR Kamalanga Energy Limited (GKEL) power plants at higher capacity.

Inspite of the challenging economic conditions and difficult business environment, your Company was successful in raising additional funds of Rs. 1,401.83 Crore through rights issue and USD 30.00 Crore through issuance of Foreign Currency Convertible Bonds ("FCCB"). GCHEPL and GREL power plants were commissioned during the year.

Standalone financial results

During the year ended March 31, 2016, the revenue from operations of the Company on standalone basis has increased by 22.99% from Rs. 649.74 Crore to Rs. 799.10 Crore on account of increase in interest income of the Company.

During the year ended March 31,2016, based on an internal assessment, the Company has made a provision of Rs. 1,576.93 Crore towards diminution in value of its investment in GMR Highways Limited (GMRHL), GMR Renewable Energy Limited (GREED and GMR Energy Limited (GEL), primarily on account of their accumulated losses and diminution in value of investments/advances in their subsidiaries. The same has been disclosed as an exceptional item in the financial statements.

Dividend /Appropriation to Reserves

Your Directors have not recommended any dividend on equity shares for the FY 2015-16. Preference dividend aggregating to Rs. 50,605 for the FY 2015-16 at the rate of 0.001% per annum on 1,13,66,704 Compulsorily Convertible Preference Shares (CCPS) of face value of Rs. 1,000/- each has been provided in the books.

Reserves

The net movement in the major reserves of the Company on standalone basis for FY 2015-16 and the previous year are as follows:

(Rs. in Crore)

Particulars March 31,2016 March 31, 2015

General Reserve 40.62 40.62

Securities Premium Account 9,971.55 7,658.71

Surplus in Statement of Profit and Loss (1,460.21) 62.81

Debenture Redemption Reserve 125.44 121.33

Capital Reserve 141.75 -

Foreign currency monetary translation difference account (0.89) -

8,818.26 7,883.47

Management Discussion and Analysis Report (MDA)

MDA Report for the year under review, as stipulated in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI LODR"), is presented in a separate section forming part of the Annual Report.

The brief overview of the major developments of each of the Subsidiaries'' business is presented below. Further, MDA, forming part of this Report, also brings out review of the business operations of various subsidiaries and jointly controlled entities.

Airport Sector

Your Company''s airport business comprises of 3 operating airports viz., Delhi and Hyderabad International Airports in India and Mactan Cebu International Airport in Philippines. These Indian airports are owned by your Company''s subsidiary GMR Airports Limited (GAL) while the 40% stake in GMR Megawide Cebu Airport Corporation (GMCAC) is held through GMR infrastructure (Singapore) Pte. Limited, also your Company''s subsidiary.

Your Company''s aviation business comprises of GMR Aviation Private Limited, a 100% subsidiary of the Company which is operating in the general aviation space.

An overview of these assets during the year is briefly given below:

Delhi International Airport Private Limited (DIAL)

DIAL is a Joint Venture (JV) between GAL (64%), Airports Authority of India (AAI) (26%) and Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi. Malaysia Airports (Mauritius) Private Limited originally owned 10% stake in the Joint Venture which has been purchased by GAL in May 2015.

Highlights Of FY 2015-16:

DIAL surpassed the 48 million passenger mark in FY 2015-16, witnessing a growth of 18% in traffic over previous year. Strong growth in domestic cargo segment propelled DIAL to retain its number one position in cargo traffic in india with a 4% overall growth in FY 2015-16 over the previous year. Due to delay in determination of tariff for the second control period, the tariffs of the first control period have continued.

The non-aeronautical revenues grew by 19% over last year led by growth in commercial non-aero sales and Land S Space rentals.

Air Asia India Ltd, Air Canada, Shandong Airlines, Bhutan Airlines and Air Asia X commenced their operations from IGIA. New destinations like Domodedvo - Moscow, San Francisco, Toronto and Kunming were added, which were earlier unserved from Delhi Airport.

Existing solar power plant capacity of 2.14 MW at IGIA increased to 7.84 MW with commissioning of additional 5.70 MW capacity in FY 2015-16. The additional capacity is expected to generate 8.5 million units of electricity per annum leading to savings of Rs. 3.0 to Rs. 3.5 Crore per annum.

Strong focus on developing organizational culture based on operational excellence and customer focused initiatives helped DIAL to retain the world number 1 airport rank in the 25-40 million passengers per annum (mppa) category by achieving a score of 4.96 on a scale of 5, in 2015.

Key Awards and Accolades received in FY 2015-16:

Number 1 airport as per Airports Council International (ACI) Airport Service Quality (ASQ) ranking for 2015 in the 25 to 40 mn passenger category, second year in a row.

ACI Director General''s Roll of Excellence 2015 for being ranked in top 5 airports in its category in the last five years.

''Best Airport Staff in India and Central Asia'' in 2016 SKYTRAX World Airport Awards for second year in a row.

''International Safety Award'' in Distinction Category from British Safety Council with an overall score of 60 (on 60 Point scale) for the year 2016.

''Golden Peacock Award for Sustainability'' in the Aviation Sector for 2015.

India''s smartest airport buildings at the Times of India-Honeywel Smart Building Awards, 2015.

Best Emerging Airport-Asiaat the Asian Freight, Logistics and Supply Chain (AFLAS) Awards.

CII Business Excellence Star Awards: Leaders in Operations Management S Leaders in Customer Management 2015.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a JV between GAL (63%), AAI (13%), Government of Telangana (13%) and MAHB (Mauritius) Private Limited (11%) and has entered into a long-term agreement to operate, manage and develop the Rajiv Gandhi international Airport (RGIA), Hyderabad.

Highlights Of FY 2015-16:

GHIAL continued to record strong traffic growth in its 8th year of operation. Passenger traffic touched 12.5 million, registering a growth of 19% year on year (Y-o-Y). Similarly, Cargo also registered impressive growth to reach 113,000 MT, a growth of 10% Y-o-Y. ATM (Air Traffic Movement) also had a strong growth of 12% Y-o-Y ending the year with 106,303. The year also showed remarkable progress towards GHIAL''s Mission of being the Gateway of Choice and Preferred Logistics Hub for South and Central India region, marked by additions to the airline count on both passenger (1 international and 2 domestic) and cargo (1 domestic) fronts and additional frequencies from the existing airlines.

Towards ensuring a well-rounded and enjoyable experience to its passengers, the airport enhanced its retail and shopping experience by modifying the layout to unidirectional flow, which has yielded additional number of new stores and retail outlets at the passenger terminal. The Airport charges for GHIAL (User Development Fee (UDF) and Passenger Service Fee - Facilitation Component (PSF)) were successfully restored vide the Interim Order from the Hyderabad High Court which has enhanced the cash flow and the same was implemented with effect from November 05, 2015. GHIAL also signed an escrow account with Air India for collection of UDF and PSF, which is a mechanism that has aided GHIAL in securing the dues and strengthening the cash flows.

To enhance the passenger experience, GHIAL has operationalized an end- to-end E-Boarding process for domestic passengers, becoming the only airport in India to implement the same. It has improved the efficiency at each security check point and has started the journey of Indian Aviation along the path of "Digital India'' as envisaged by the Hon. Prime Minister.

Adding another green milestone to GMR''s clean energy journey, GHIAL has commissioned a 5 MW Solar Power Plant for its captive consumption to meet the airport''s peak power demand. The airport also completely refurbished Hajj Terminal which enhanced the passengers'' and meeters'' S greeters'' facilities. Despite challenges, GHIAL has always maintained its focus on service quality and passenger delight and this continued dedication saw the airport win accolades from passengers and industry associations for its excellence in service delivery with ACI ranking RGIA among the top 3 in the world for ASQ for the 7th year in a row.

Awards and Accolades received in FY 2015-16:

World''s Third Best Airport 2015 in ASQ Rating by ACI, in 5-15 mn passenger category.

Best Regional Airport in India and Central Asia at the Skytrax World Airport Awards, a web based survey voted directly by passengers.

Emerging Cargo Airport of the Year, Region - India awarded by STAT Times International Award for the second time in a row.

ACI Asia-Pacific Silver Recognition for Human Resources Excellence.

Cll Award for "Excellent Energy Efficient Unit" for a second time in a row.

Golden Peacock Environment Management Award for 2015.

Best Landscape - Garden Festival 2016 (sixth time in a row).

Airport Cities

As more and more aviation-oriented businesses are being drawn to airport cities and transportation corridors radiating from them, a new urban form is emerging, the Aerotropolis, stretching upto 20 miles (30 kilometers) outward from some airports. This concept, developed by Dr. John Kasarda, has been adopted by GMR Group at its airports in Hyderabad and Delhi and GMR Group is working towards developing an ecosystem around the airports.

Both Delhi and Hyderabad have completed the master plan for their landside developments and are engaged in the development of physical infrastructure and discussions with potential tenants.

During the course of the year, DIAL witnessed 3 of its hotel assets coming on line. Delhi airport has also undertaken works to beautify the Aerocity area and the work is expected to be completed in 2016.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC, a JV between GMR group (40%) and Megawide Corporation (60%), in April 2014, entered into a concession agreement with Mactan Cebu international Airport Authority for development and operation of Mactan Cebu International Airport (Cebu airport) for a period of 25 years. GMCAC took operational responsibility of the airport in November 2014 and has now been operating the airport for 20 months.

Highlights Of FY 2015-16:

GMCAC has laid great emphasis on boosting traffic at Cebu airport, both domestic and international.

In a bid to boost international tourism, GMCAC has been working with the tourism body of Cebu and Philippines, as well as with travel agents to boost tourist traffic from China, Japan and Australia. As a result, GMCAC has seen international traffic grow by 18.5% while the domestic traffic has also grown at 9.6%. In terms of international connectivity, GMCAC has also seen 3 new routes being added, viz., Cebu - Dubai, Cebu - Los Angeles and Cebu- Taipei.

On the operational front, GMCAC has brought about a significant transformation in the existing terminal facilities by:

a) Introduction of common security checks for passengers boarding Domestic and International flights. This resulted in doubling of the capacity of security x-ray lanes.

b) Installed New Flight Information Display Systems.

c) Introduced new check-in systems and increased the number of check- in counters.

d) Developed a new meeters'' and greeters'' area.

e) Introduced enhanced FSB and retail operations including launch of a completely overhauled Duty Free area.

GMCAC is also steadily working towards development of the new terminal. To mitigate the delay in handover of land which was under occupation of Philippines air force, GMCAC has started work on the land parcels made available to it in June 2015. The structural works for the new terminal building are underway and we are confident of completing the terminal within the timelines specified in the concession agreement.

Awards and Accolades received in FY 2015-16:

Asia-Pacific Transport Deal of the Year.

Best Project Finance deal award by Triple A Asia Infrastructure awards.

GMR Male International Airport Private Limited (GMIAL)

GMR Group along with its partner Malaysia Airports are engaged in arbitration with Government of Maldives (GoM) and Maldives Airport Company Ltd. (MACL) after the latter repudiated the agreement in December 2012. In order to expedite the progress of the arbitration, both GMR Group and GoM have agreed to bifurcate the arbitration in 2 phases; first phase was to focus on questions of liability; while the second phase was to quantify the amount recoverable. In June 2014, the tribunal had ruled that the concession agreement was valid and binding and GoM had illegally terminated the concession agreement and is therefore liable to GMR/GMIAL for compensation. After subsequent hearings, the tribunal has ruled in February 2016 that the debt owed by GMIAL to Axis Bank will form part of the compensation payable by GoM to GMIAL. The hearing to determine the quantum of damages payable by Government of Maldives to GMIAL is scheduled in the month of August 2016.

GMR Aviation Private Limited (GAPL)

GAPL operates and owns one of the youngest fleets in the country and addresses the growing need for charter services. The operations are managed by professionals with robust processes and systems to ensure highest levels of efficiency and safety. In order to boost revenues and rationalize overhead costs, GAPL has entered into a 2 year management contract with Jet Set Go - a general aviation fleet aggregator. As per the agreement, Jet Set Go will take responsibility for operations and marketing of the aircrafts.

Energy Sector

The Energy Sector companies are operating around 4,600 MWsof Coal, Gas, Liquid fuel and Renewable power plants in India and around 2,200 MWs of power projects are under various stages of construction and development, besides a pipeline of other projects. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements (PPA).

Following are the major highlights of the Energy Sector:

A. Operational Assets:

I. Generation:

1. GMR Warora Energy Limited (Formerly EMCO Energy Limited) (GWEL) - 600 MW:

The Plant consists of 2 x 300 MW coal fired Units with all associated auxiliaries and Balance of Plant Systems.

GWEL has a Coal supply Agreement with South Eastern Coalfields Limited (SECL) for a total Annual Contracted Quantity (ACQ) of 2.6 Million Tonnes per annum.

Tamil Nadu Generation and Distribution Corporation Limited (TAGENDCO) PPA was fully operationalized during the year, which was earlier pending due to non availability of transmission corridor and long-term open access.

During the year, the Plant has achieved availability of 94.80% and Gross Plant Load Factor (PLF) of 75.95%.

More than 90% ash utilization was achieved during the year.

Weir construction for water availability by Maharashtra industrial Development Corporation (MIDC) is under way and expected to be made ready in FY 2016-17.

2. GMR Kamalanga Energy Limited (GKEL) - 1,050 MW:

GKEL in which GMR Energy Limited has 86% stake, with IF S IDFC holding the balance stake, has developed 1,050 MW (3x 350) coal fired power plant at Kamalanga Village, Odisha.

The plant is supplying power to Haryana through PTC India Limited, to Odisha through GRIDCO Limited and to Bihar through Bihar State Power Holding Company Limited.

85% of the capacity is tied-up in long term PPAs.

GKEL has received Letter of Assurances from Mahanadi Coalfields Limited (MCL) for 1,050 MW, of which 500 MW is for firm linkage and 550 MW is for tapering linkage.GKEL has signed Fuel Supply Agreement (FSA) for firm linkage for 500 MW and tapering linkage for 200 MW with MCL and is getting coal supply accordingly. GKEL has also signed FSA with Eastern Coalfields Limited (ECL) for 350 MW tapering linkage and coal supply corresponding to tapering linkage for 204 MW had started earlier.

During this year, Ministry of Coal has allowed continuation / extension of MoU coal (earlier tapering linkage) to GKEL beyond March 2016 till June 2016. Further, from December 2015 onwards, supplies from ECL have been transferred to MCL leadingto a cost savings ofRs. SOCrore per year.

During this period, GKEL achieved availability of 91.5% and PLF of 67.6%.

GKEL received favourable order from CERC on GRIDCO tariff, on the basis of which GKEL has raised supplementary bills of Rs. 233.82 Crore to GRIDCO for the period upto November 2015 and has also raised regular bills aggregating to Rs. 204.33 Crore for the period from December 2015 to March 2016.

GKEL received favourable order from CERC on Change in Law petition against Haryana Discoms, with claim of Rs. 115.94 Crore of arrears from FY 2014 to FY 2016 period.

GKEL successfully completed refinancing of the project debt under Flexible Structuring Scheme along with the new facility of Rs. 400 Crore against the regulatory receivables. Working capital limit was also enhanced with sanction ofRs. 745 Crore.

3. GMR Chhattisgarh Energy Limited (GCHEPL) - 1,370 MW:

GCHEPL, a wholly owned subsidiary of GEL, has developed 1,370 MW (2 x 685 MW) pulverized coal- fired super critical technology based power project in Raikheda Village, Tilda Block, Raipur District, in the State of Chhattisgarh. GCHEPL has received all the necessary statutory and environmental clearances. The project has achieved COD of Unit -1 and Unit - 2 on June 01, 2015 and March 31, 2016 respectively and started commercial operation of Unit -1 from November 01,2015. The project participated in the coal block auction last year, bid and won two coal blocks, namely Talabira and Ganeshpur.

The Railway track for movement of rake to site has been completed and siding operations have commenced. Ganeshpur coal block (located in Latehar District, Jharkhand and earlier allotted to Tata Steel Limited and Adhunik Thermal Energy) has a reserve of about 92 MT and is expected to start its production by FY 18 and reach its peak production capacity by FY 21.

Talabira coal block (located in Odisha and earlier allotted to HINDALCO) has a reserve of about 8.5 MT. This is an operating coal block and GCHEPL started production from August 2015 onwards and GCHEPL has been receiving coal for its operations.

GCHEPL is actively pursuing to tie-up the entire capacity through various upcoming medium and long-term power procurement tenders.

4. GMR Vemagiri Power Generation Limited (GVPGL) - 370 MW:

GVPGL, a wholly owned subsidiary of GEL operates a 370 MW natural gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh. During the FY 2016, the plant commenced operations on roster basis beginning August 2015, under e-bid RLNG scheme. In line with the scheme, the plant secured gas corresponding to 30% PLF for period June 2015 to September 2015,50% PLF for the period October 2015 to March 2016 and 30% PLF for the period April 2016 to September 2016. GVPGL operated at an average PLF of 17.88% during the year.

To benefit from the softened LNG prices world-wide, GVPGL is striving continuously to import LNG on short term basis to obtain higher PLF.

5. GMR Rajahmundry Energy Limited (GREL) - 768 MW:

GREL, a wholly owned subsidiary of GEL is engaged in setting up of 768 MW (2 x 384 MW) combined cycle gas based power project.

GREL achieved COD on October 22,2015 and secured gas for operations through e-bid RLNG scheme at 50% PLF for the period October 2015 to March 2016 and 30% PLF for the period April 2016 to September 2016. The plant began commercial operations for the first time starting November 16, 2015 based on the roster decided by AP- Transco. GREL operated at an average PLF of 20.12% during the year.

To benefit with the softened LNG prices world-wide, GREL is striving continuously to import LNG on short term basis and looking forward to tie up power by entering into the PPA opportunities available.

Further, the lenders have invoked Strategic Debt Restructuring (SDR) for GREL resulting in conversion of outstanding debt amounting to Rs. 1,413.99 Crore (Rs. 1,308.57 Crore of debt and Rs. 105.42 Crore of Interest accrued thereon) into equity in order to acquire 55% shareholding in GREL. Post the restructuring, the total outstanding debt of GREL would be Rs. 2,366 Crore.

6. Barge mounted Power Plant of GMR Energy Limited (GEL), Kakinada:

GEL operates 220 MW combined cycle barge mounted power plant at Kakinada, Andhra Pradesh. There was no generation of power by the barge mounted power plant during the year ended March 31,2016 on account of non- availability of gas.

Plant is kept under preservation since March 2013. Preservation methods were adopted based on Original Equipment Manufacturers'' (OEM) procedures.

Efforts are being made to arrange gas from domestic sources and LNG market.

7. GMR Power Corporation Limited (GPCL), Chennai:

GPCL, in which GEL holds 51% stake, operates a 200 MW diesel powered power plant and was selling power to Tamil Nadu Generation and Distribution Corporation Limited (TAGENDCO). There was no generation of power during the year and currently the plant is kept under preservation.

TAGENDCO had extended the PPA from February 15, 2014 to February 14,2015 with fresh tariff and new terms and conditions. GPCL requested TAGENDCO for extension of PPA from February 15, 2015 and is awaiting clearance for supplying power.

8. GMR Gujarat Solar Power Private Limited (GGSPPL), Charanka Village, Gujarat:

GGSPPL, a wholly owned subsidiary of GEL, operates 25 MW Solar power project at Charanka village, Patan district, Gujarat. GGSPPL has entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for supply of entire power generation. GGSPPL has achieved commercial operation on March 04, 2012 and received certificate of commissioning from M/s. Gujarat Energy Development Agency ("GEDA"). Indu Projects Limited has been awarded the contract for operation and maintenance of the plant for a period of 5 years. Plant has achieved a Gross DC PLF of 19.36% for FY 2015-16 and recorded revenue of Rs. 63.18 Crore for the FY. Significantly during the year, GGSPPL also received the following ISO Certifications from DNV GL of Norway (1) ISO 9001:2008 (Quality Management System), ISO 14001:2004 (Environmental Management System) and OHSAS 18001:2007 (Occupational Health and Safety Management System).

9. GMR Rajam Solar Power Private Limited (GRSPPL), Rajam:

GRSPPL, a wholly owned subsidiary of GEL commissioned a 1 MW Solar power project in Rajam, Andhra Pradesh in February 2016. The Company has signed a 25 year PPA with both GMR Institute of Technology (700KW) and GMR Varalakshmi Care Hospital (300KW) for the sale of power generated.

II Transmission:

1. Aravali Transmission Service Company Limited (ATSCL):

ATSCL, a wholly owned subsidiary of GEL, successfully implemented the project with 96 km line including 400 kV S/C Hindaun-Alwar transmission line and 2 * 315 MVA 400/220 kV Grid Substation at Alwar and other associated works in the State of Rajasthan with a total project cost of Rs. 146.20 Crore. This is the second public private partnership (PPP) project of its kind in Rajasthan, which is being executed on Build Own Operate Maintain (BOOM) basis for a concession period of 25 years from the date of Project Award.

The 400 kV Hindaun-Alwar transmission line was successfully charged on July 25, 2014. Grid Substation was charged on July 31,2014.

COD was achieved on July 17, 2014 in line with the provisions of Transmission Service Agreement (TSA).

Rajasthan Electricity Regulatory Commission (RERC) gave an unfavorable order in case of the Tariff Revision Petition filed before RERC seeking compensation in terms of either TSA period extension (to compensate ATSCL on account of delayed grant of transmission license, escalation in project cost due to change in law and COD consideration) or upfront loss compensation.

Company has approached Appellate Tribunal for Electricity (APTEL) seeking relief against the order of RERC.

The asset has performed at more than the target availability of 98%.

2. Maru Transmission Service Company Limited (MTSCL):

MTSCL, a wholly owned subsidiary of GEL, successfully implemented the project with 269 km line including 400 kV S/C Bikaner-Deedwana Transmission Line, 400 kV S/C Ajmer-Deedwana Transmission Line, 220 kV D/C Sujangarh-Deedwana Transmission Line and 2x315 MVA 400/220 kV Grid sub-station at Deedwana and other associated works in the State of Rajasthan with a total project cost of Rs. 251.90 Crore. This is the first PPP project of its kind in Rajasthan, which is being executed on BOOM basis for a concession period of 25 years from the date of Project Award.

COD was declared by Order of the RERC from December 16, 2013.

Arrears have been received from Discoms as per the relief granted by RERC to pay all unpaid revenue from December 16, 2013.

RERC gave an unfavorable order in case of the Tariff Revision Petition filed before RERC seeking compensation in terms of either TSA period extension (to compensate MTSCL on account of delayed grant of transmission license, escalation in project cost due to change in law) or upfront loss compensation.

Company has approached APTEL seeking relief against the order of RERC.

The asset has performed at more than the target availability of 98%.

Stake sale in the Transmission projects:

GEL has entered into definitive agreements with Adani Transmission Limited agreeing to transfer its interest in aforesaid ATSCL and MTSCL. The transaction shall be concluded subject to fulfillment of necessary conditions precedent.

B. Projects:

1. GMR Bajoli Holi Hydropower Private Limited (GBHHPL) (180 MW):

GBHHPL, a wholly owned subsidiary of GEL, is implementing 180 MW hydro power plant on the river Ravi at Chamba District, Himachal Pradesh.

GBHHPL achieved financial closure on April 25, 2013 and tied-up the debt requirement of Rs. 1,380 Crore and the necessary loan agreements were executed. All clearances required for undertaking construction are in place and complete land as required for the project is in GBHHPL''s possession.

All the contracts for execution of civil works and Electro Mechanical works were awarded and civil works are going on with the completion of infrastructure works.

GBHHPL had also executed the Connectivity Agreement with HP Power Transmission Corporation Limited and Long Term Access Agreement with Power Grid Corporation of India Limited (PGCIL) for evacuating power outside Himachal Pradesh.

The construction works of the project are in full swing and River Diversion work is completed on schedule on October 01, 2015. Overall progress of 32% has been achieved till end of FY 2015-16.

2. GMR Upper Karnali Hydro Power Public Limited (GUKPL) - (900 MW):

GUKPL, a subsidiary of GEL, is developing 900 MW Upper Karnali Hydroelectric project (HEP) located on river Karnali in Dailekh, Surkhet and Achham Districts of Nepal. During the year under review, post execution of Project Development Agreement (PDA), several key activities as per PDA compliance, Technical appraisal of the Project, Design and tendering works have been completed, despite a series of Force Majeure events like Earthquake, political upheaval etc. The Project land has been identified, joint verification for Government and Forest land has been completed and same is under review by concerned Ministry before seeking cabinet approval. Rehabilitation Action Plan (RAP), as per International Finance Corporation (IFC) Performance Standards and the Safeguard Policies has been prepared and private land acquisition process is currently underway. Similarly Environment and Social Impact Assessment (ESIA) studies as per IFC Performance Standards have also been prepared and are under finalisation with the lenders. The detailed technical appraisal by a seven member Panel of Experts (empanelled with IFC) has been completed and the Panel submitted its final report. The Hydraulic model studies as per the Panel''s advice has also been completed and the technical design of the Project has been finalised. Tender engineering has been completed and the formal tender process is being launched shortly.

For the Transmission Line, detailed survey has been completed and cadastral mapping is in advanced stage of completion. Post execution of the PTA between Government of India (Gol) and Government of Nepal (GoN) and the SAARC energy pact between SAARC nations, Gol is in advanced stage of finalisation of across border policy. Gol and GoN have also agreed to build the cross border

Transmission line (From Lamki in Nepal to Bareilly in UP) on bilateral route, matching with the commissioning schedule of the Upper Karnali HEP. Regarding power sale, a MoU has been executed with M/s NTPC Vidyut Vyapar Nigam Limited (NVVN) for tie-up of the entire saleable capacity of the Project in India and Bangladesh. NVVN is also nominated by Gol as the Nodal agency for sale of Power between India, Nepal, Bangladesh and Bhutan. Post this MoU, discussions are underway with select buyers in India and Bangladesh for tie-up of power on long term route. Joint Development Agreement (JDA) was executed with IFC for both Generation and Transmission projects on December 22, 2014 and as per the JDA, IFC proposes to invest as Co-developer for the Projects with 10% equity under ''Infra Ventures'' route and also assume the role of lead lender and debt arranger. The Project has received Lois in excess of USD 1.1 billion from Multilateral Development Banks (MDBs) across the globe and post this, the first all lenders site visit / lenders meeting was held at Kathmandu on April 05, 2016. The lenders are presently engaged in Project appraisal activities.

3. GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL) - Badrinath - (300 MW):

GBHPL, a subsidiary of GEL, is in the process of developing 300 MW hydroelectric power plant on Alaknanda river in the Chamoli District of Uttarakhand State. The project has received all major statutory clearances like Environmental and Techno economic concurrence from Central Electricity Authority (CEA). The project got registered in The United Nations Framework Convention on Climate Change (UNFCCC)and it is eligible for receiving the Clean Development Mechanism (CDM) benefits.

Implementation Agreement has been executed with the Government of Uttarakhand on May 17, 2013. Financial Closure (FC) process is in the advanced stage. Project has received term loan sanction from Power Finance Corporation Limited. However, FC process has been held-up due to Hon''ble Supreme Court''s stay order on 24 Hydro Electric Projects in Uttarakhand (Order dated May 07, 2014) issued while hearing a civil appeal in the matters of Alaknanda Hydro Power Company Limited and the stay order is in effect till date.

4. Himtal Hydropower Company Private Limited (HHPPL) - (600 MW):

HHPPL, a subsidiary of GEL, is developing 600 MW Upper Marsyangdi-2 Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts of Nepal. During the year under review, significant progress was made in negotiations / finalisation of the PDA with Investment Board Nepal (IBN) and the same is in advanced stage. The land for the entire project has been identified and verified. The final verified land case has been submitted to GoN. MoU for sale of power with Government of Bangladesh has been finalised and is awaiting the execution pending the notification of the cross border policy, which is currently under formulation by Gol.

For the Transmission Line, Detailed Route Survey and Cadastral Map Survey is in advanced stage of completion. JDA was executed with IFC for transmission line project on December 22, 2014 and JDA with IFC is already in place for Himtal (the Generation Company). IFC proposes to invest in the Project as Co-developer with 10% equity under ''Infra Ventures'' route and also act as lead lender and lead arranger for the Project. Post PTA/SAARC Energy pact execution, Gol and GoN have also recently agreed to build the cross border Transmission line on bilateral route, matching with the commissioning schedule of the Upper Marsyangdi-2 Hydro Electric Project.

5. GMR Londa Hydropower Private Limited (GLHPPL) - 225 MW:

GMR Energy Limited owns the 100% stake of GLHPPL which is developing a 225 MW project in East Kameng district in Arunachal Pradesh. The Detailed Project Report ("DPR") has been prepared and has received techno-economic concurrence from the CEA. The Expert Appraisal Committee (EAC) of Ministry of Environment, Forest and Climate Change (MoEF S CC or MoEF) has recommended for Environmental Clearance and accordingly MoEF S CC had issued in-principle clearance to this project. However, formal Environmental Clearance shall be granted by MoEF S CC after obtaining the Forest- stage-l clearance. Defence clearance for setting up the project has been received from Ministry of Defence, Gol.

C. Mining Assets:

1. PT Barasentosa Lestari (PTBSL):

GEL had acquired 100% stake in PTBSL in September 2008 which has coal mine in South Sumatra Province with more than 650 MT Coal Resources in -24,385 Hectares and total mineable reserves of about 280 Million Metric Ton (MMT). Trial coal production and sales have commenced in FY 2015, however the operations were suspended because of the limitations of transportation of coal due to lower water levels in Musi River. The coal production is expected to be gradually ramped up from 1 Million Ton Per Annum (MTPA) to 3 MTPA over a period. The coal is planned to be exported to India to cater to captive demand of power plants owned by the Group and also to trade the coal through in-house coal trading arm.

2. PT Golden Energy Mines Tbk (PT GEMS):

GEL through its overseas subsidiary, GMR Coal Resources Pte. Ltd., had acquired 30% stake in PT GEMS, a group company of Sinarmas Group, Indonesia. PT GEMS, a limited liability company, listed on the Indonesia Stock Exchange. PT GEMS is carrying out mining operations in Indonesia through its subsidiaries which own coal mining concessions in South Kalimantan, Central Kalimantan and Sumatra. PT GEMS is also involved in coal trading through its subsidiaries. Coal mines owned by PT GEMS and its subsidiaries have total resources of more than 2.0 billion tons and Joint Ore Reserves Committee (JORC) certified reserves of more than 620 MT of thermal coal. GMR Group has a Coal off take Agreement with PT GEMS which entitles GMR to offtake coal for 25 years.

Transportation Highways

GMR Highways Limited, a wholly owned subsidiary of your Company, is one of the leading highways developer in India with 9 operating highways assets (including two projects in which it holds minority interest). During the FY 2016, we have entered into definitive agreements to divest our balance 26% stake in Ulunderpet Expressways Private Limited and our entire stake in GMR OSE Hungund Hospet Highways Private Limited. The FY 2015-16 has seen a subdued growth in the highways sector due to various factors such as slowed economic situation, funding constraints, land acquisition issues etc. This has resulted in lower investment from private players in infrastructure in general including roads and highways sector. For Kishangarh-Udaipur- Ahmedabad project which had been terminated in December 2012, a dispute notice to NHAI was served, invoking arbitration to settle the dispute. The Arbitration Tribunal has been constituted and the matter will be taken up in hearings scheduled during FY 2016-17.

Urban Infrastructure

The Group is developing a 2,100 acre multi product Special Investment Region (SIR) at Krishnagiri, near Hosur in Tamil Nadu and 10,000 acre Port- based multi-product SIR at Kakinada, Andhra Pradesh.

Krishnagiri SIR

GMR Group, with an objective of building world class industrial infrastructure in India, is setting up a SIR at Hosur, Tamil Nadu just 45 km from Electronic City, Bengaluru. The location provides unique advantage of multi-modal connectivity with National and State Highways and a railway line running alongside. Krishnagiri SIR is planned to be developed as an integrated city spread across 2,100 acres in the influence area of proposed Chennai- Bangalore Industrial Corridor. Krishnagiri SIR is being planned to house the following manufacturing clusters:

Automotive S Ancillary; Defense and Aerospace; Precision Engineering; Machine tools; Electronics Product Manufacturing.

Designed to encompass a complete ecosystem, Phase 1A of Krishnagiri SIR spread over 275 acres will contain all that are essential for a large industrial city center. Krishnagiri SIR has following key offerings to its esteemed clientele:

Shovel ready developed plot with road, drainage, water supply, Water Treatment Plants (WTP), Sewage Treatment Plants (STP) and other similar facilities;

Water - Potable water;

Power -33 kV level dedicated sub-station with a Solar power plant.

The entire infrastructure is being developed and maintained by GMR Group underscoring its commitment to quality, service and timelines. The "integrated" design would endeavor to provide first world standard residential, social and commercial amenities making this zone a truly "self- contained".

KakinadaSEZ/SIR

GMR Group owns 51% in Kakinada SEZ Private Limited, which is developing Kakinada SEZ/ SIR in the State of Andhra Pradesh in proximity to the cities of Vishakapatnam and Kakinada. With an area span of over 10,000 acres, Kakinada SEZ / SIR will be self-contained Port-based Industrial park with ideally designed core infrastructure, industrial common infrastructure, business facilitation infrastructure and social infrastructure across varied dedicated areas such as housing, lifestyle and high-end expat friendly zone. Kakinada SEZ / SIR is designed for balancing the sensitivity to culture and heritage of the region and also for integration with the native eco-system.

Project Progress:

Pals Plush, a leading toy manufacturing company has already started its operations in an area of over 1,00,000 sq. ft. of space and has already recruited over 600 people. It has plans to recruit over 1200 people by FY 17.

TATA Business Support Services has established a rural BPO and has already recruited over 30 people and training for the next batch of people is underway. Anticipated to recruit over 100 people in the near future.

Received interests from various domestic and international companies to establish their factories in Kakinada SEZ / SIR and are in various phases of advanced discussions.

Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) has executed and registered an Agreement for sale with the company for 1563.22 acres of land at Kona Village, Thondangi Mandal for the purpose of Company''s Port / Industrial Backup area / Industrial Park.

Secured approvals to draw water up to 11 MGD from various sources for Industrial use.

Laid down the power cables inside the industrial zone and provided industrial power supply for existing industries.

Master Plan for Phase 1 development of around 916 acres has been completed.

Internal black top roads and plots have been developed.

EPC

Pursuant to the strategic decision taken to pursue EPC opportunities outside GMR Group and consequent to the Group''s entry into Railway Projects during FY 2015-16, the Group has started construction of 2 Dedicated

Freight Corridor Corporation (DFCC) projects in the state of Uttar Pradesh. Mobilization and design for the projects is substantially completed and construction is in full swing.

Your Company has also achieved substantial completion of 2 Rail Vikas Nigam Limited (RVNL) projects in the States of Andhra Pradesh and Uttar Pradesh that were awarded in FY 2013-14.

Raxa Security Services Limited (Raxa)

Raxa became a subsidiary of the Company during FY 2015-16 consequent to the Group acquiring 100% stake in Raxa. Raxa is engaged in the business of providing security manpower and technology services to industrial and business establishments.

Consolidated Financial Statement

In accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statement read with AS - 23 on Accounting for investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2016, the Company had 123 subsidiary companies apart from 26 joint ventures and 4 associate companies. During the year under review, companies listed below have become or ceased to be Company''s subsidiaries or associate companies. The Policy for determining material subsidiaries as approved may be accessed on the Company''s website at the link: http://investor.gmrgroup.in/investors/GIL-Policies.html. The complete list of subsidiary companies, joint ventures and associate companies as on March 31, 2016 is provided in "Annexure A" to this Report.

Raxa Security Services Limited (Raxa) and Indo Tausch Trading DMCC (ITTD) became subsidiaries during the FY 2015-16.

Homeland Energy Group Limited (HEGL) ceased to be subsidiary during the FY 2015-16. GMR Male Retail Private Limited (GMRPL) and GMR Airports (Malta) Limited (GMRAML) were liquidated during the FY 2015-16 and accordingly ceased to be subsidiaries.

GMR OSE Hungund Hospet Highways Private Limited (GOSEHHHPL), ceased to be a subsidiary company and became an associate company during the FY 2015-16.

Report on the highlights of performance of subsidiaries, associates and joint ventures and their contribution to the overall performance of the Company has been provided in Form AOC-1.

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 March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2.1 of the Notes to the Financial Statements have been selected and applied consistently and judgment 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 March 31,2016 and of the loss 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 to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively;

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

The Company continues to follow the Business Excellence Framework, based on the Malcolm Baldrige Model, for continuous improvement in all spheres of its activities. Your Company works towards continuous improvement in governance practices and processes, in compliance with the statutory requirements.

The Report on Corporate Governance as stipulated under relevant provisions of SEBI LODR forms part of the Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to this Report.

Business Responsibility Report

As stipulated under Regulation 34(2)(f) of SEBI LODR, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report.

Contracts and arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the FY 2016 with related parties were in the ordinary course of business and on arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions other than the transaction mentioned below:

Loans extended by the Company to GEL to an extent of Rs. 1,288.26 Crore during the FY ended March 31,2016.

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://investor.gmrgroup.in/ investors/GIL-Policies.html. Your Directors draw attention of the members to Note 32 to the standalone financial statements which sets out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which was approved by the Board. The CSR Policy may be accessed on the Company''s website at the link: http://investor.gmrgroup.in/ investors/GIL-Policies.html.

The Company has identified three focus areas towards the community service CSR activities, which are as under:

Education

Health, Hygiene S Sanitation

Empowerment S Livelihoods

The Company, as per the approved policy, may undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013. During the year, the Company was not required to spend any amount on CSR as it did not have any profits. Accordingly, it has not spent any amount on CSR activities. The Annual Report on CSR activities is annexed as "Annexure B" to this Report.

The activities undertaken by GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in detail in the Management Discussion and Analysis Report.

Risk Management

With business opportunities significantly increasing in the current business environment, new risks that can impact your Company''s businesses, are emerging. For these risks to be managed effectively, it is imperative to identify and address these risks in order to accomplish Company''s objectives.

Your Company''s Enterprise Risk Management (ERM) framework follows the current best practices and has been deployed to address the emerging challenges effectively.

Significant developments during the year under review are as follows:

Risk assessment was carried out in detail at bid stage for the Railway EPC projects, Philippines airports projects. Independent views on key business assumptions made for these bids were presented during board reviews, enabling informed decision-making;

The focus on decentralization of Risk Management function has continued throughout this year. This decentralization has been effectively translated into functioning ERM teams in the sectors, coupled with support from outsourced partners;

Having successfully pilot-implemented the Project Risk Management (PRM) framework in the previous year, the same has been replicated in the ongoing Railway EPC projects. The deployment of PRM framework has enabled effective control over project costs;

The Group has felt the need for a measurable approach to decide the amount of risks it can take in achieving its business objectives in the changed business environment over the past year. A draft Risk Appetite Framework for the Group is under development and review with an objective to establish thresholds for quantum of risks that the Group can accept;

The Physical Risk Benchmarking framework developed earlier, is under implementation at Energy assets.

Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG). The ERM Team also presents to the Management and the Audit Committee of the Board, the risk assessment and minimization procedures adopted to assess the reliability of the risk management structure and efficiency of the process.

A detailed note on risks and concerns affecting the businesses of the Company is provided in MDA.

Risk Management Policy

The Company has in place the Risk Management Policy duly approved by the Board of Directors.

ERM Philosophy

The GMR Group''s ERM philosophy is "To integrate the process for managing risk across GMR Group and throughout its businesses and lifecycle to enable protection and enhancement of stakeholder value."

ERM aims at balancing the dynamic growth strategy of the Group with robust institution building processes by ensuring that key decisions with regard to strategy and institution building are commensurate with the Group''s risk appetite.

The Group endorses the following principles as adapted from ISO 31000:2009 (Risk Management - Principles and Guidelines):

ERM Protects and enhances value

ERM is an integral part of all organizational processes and is applicable across the Group

ERM is an input to decision making

ERM is systematic, structured and timely

ERM is transparent, inclusive and consultative

ERM is dynamic, iterative and responsive to changes

ERM facilitates continual improvement

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to financial statements. These controls were tested and no reportable material weaknesses were observed in the operations of the Company.

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. G. B. S. Raju, Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and is eligible for re-appointment. Mr. G. B. S. Raju has offered himself for re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its Meeting held on November 13, 2015 appointed Mr. Jayesh Desai as an Additional Director of the Company with effect from November 13, 2015 to hold office upto the date of ensuing Annual General Meeting of the Company. The Company has also received notice in writing pursuant to Section 160 of the Companies Act, 2013 from a member along with requisite deposit proposing his candidature as Director of the Company at the ensuing Annual General Meeting.

Further, the Nomination and Remuneration Committee of the Board of Directors has also recommended the re-appointment of Mrs. Vissa Siva Kameswari, Mr. R.S.S.L.N. Bhaskarudu, Mr. N. C. Sarabeswaran, Mr. S. Sandilya, Mr. S. Rajagopal, and Mr. C. R. Muralidharan as Independent Directors of the Company for their second term for a period of five years or upto the conclusion of Twenty Fifth Annual General Meeting whichever is earlier. Subsequently, Board at its meeting held on August 06, 2016 has recommended the said re-appointment.

Dr. Prakash G. Apte and Mr. V. Santhanaraman have not opted for re-appointment as Independent Director for their second term.

The Company has received notice in writing under the provisions of Section 160 of the Companies Act, 2013, from member, along with the requisite deposit proposing the candidature of each of the said directors for the office of Independent Directors, who opted for re-appointment, to be re-appointed as such under the provisions of Section 149 of the Companies Act, 2013.

The brief resume and details of Directors who are to be appointed / re- appointed are furnished in the Notice to the Annual General Meeting.

The Company has received declarations from all the Independent Directors, who opted for re-appointment, confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI LODR.

During the year under review, Mr. Adi Seshavataram Cherukupalli was appointed as Company Secretary of the Company with effect from August 13, 2015 in place of Mr. C.P. Sounderarajan.

Annual evaluation of Board performance, Board Committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements under SEBI LODR has been carried out. The performance of the Board and its committees was evaluated based on the criteria like composition and structure, effectiveness of processes, information and functioning etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. The Company''s Nomination and Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is annexed as "Annexure C" to the Board''s Report.

Auditors and Auditors'' Report

Statutory Auditors

M/s. S. R. Batliboi S Associates LLP, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.

Management''s response on the Statutory Auditors'' Qualification / Comments on the Company''s standalone financial statements

1. Qualification pertaining to the dispute in GMIAL - On termination of the contract and on conservative basis, the Group wrote off assets worth Rs. 202.61 Crore during FY 2012-13, retaining only carry value of assets equivalent to Project Loan from Axis bank, taking into account the Direct Agreement entered in to by GoM / MACL with Axis bank. Tribunal''s award dated June 18, 2014, declared that the Concession Agreement was not void ab initio, was valid and binding on the parties and also declared that the GoM and MACL are jointly and severally liable to GMIAL for loss caused by repudiation of the contract. Further on June 17, 2015, the tribunal in its decision in respect of the preliminary issue, stated that the limit of damages recoverable in the aforementioned award was intended to apply from the date of concession agreement has been repudiated and also the limit to recoverable damages identified in the aforementioned award means all damages recoverable by GMIAL and not only contractually contemplated damages. In its further order vide third part final award dated February 23, 2016, the Tribunal declared that the sums payable by GMIAL to Axis Bank are included in the sums which would have been payable by GoM / MACL to GMIAL. Based on the above favourable orders, the Management is confident that it is entitled for a compensation higher than the value of assets carried in the financial statements and the claims, if any, from GADLIL and other service providers for termination of their contracts. Accordingly, no further adjustments to financial statements is considered necessary.

2. Qualification pertaining to the investments in GKUAEL - The Company has already made a provision for diminution in the value of investments amounting to Rs. 137.47 Crore representing the entire expenses incurred on this project till date. Further, the project was delayed and subsequently terminated on account of delay by NHAI in fulfilling mandatory conditions precedent. Accordingly, Management is confident that amicable solution will be arrived at for the dispute with NHAI as well as on account of claims from sub-contractors. As it was not feasible on the date of adoption of financial statements to assess final outcome from these disputes and likely impact of the same on the financial statements, no further provision is made. These settlements will be taken into account and appropriate adjustments would be made in financial statements as and when assessment becomes feasible on settlement of disputes.

3. Qualification in the report on internal financial controls regarding assessment of carrying value of investments in GMIAL and GKUAEL - The Group has a robust system in place to assess the appropriateness of the carrying value of its investments, including testing for impairments. Management''s view on the instant cases are explained in the paras 1 and 2 above.

Management''s response on the Statutory Auditors'' Qualification / Comments on the Company''s consolidated financial statements

4. Qualification pertaining to the capitalization of indirect expenditure and borrowing costs in GREL - GREL has approached the Ministry of Corporate Affairs (MCA) seeking clarification / relaxation on applicability of MCA general circular 35/2014 dated August 27, 2014. In view of the same, no adjustment has been made to this effect in the financial statements.

5. Qualification pertaining to capitalization of Unit 1 on the date of declaration of commercial operation and also one of its mines in GCHEPL - Management is of view that the coal mine is integral part of power plant and Unit-1 is related to that coal mine. The said coal mine had started operation from the extraction from August 01, 2015, but coal extracted was not sufficient to run Unit 1. Post ramp-up of coal production, GCHEPL has started commercial operation from Unit-1 on November 01, 2015 and has declared COD of Unit 1 along with Mines with effect from October 31, 2015.

6. Qualifications pertaining to GMIAL and GKUAEL - Management responses are provided in paras 1 and 2 respectively.

7. Qualification in the report on internal financial controls regarding compliance with the applicable accounting standards in case of GREL and GCHEPL - The Group has proper systems and review mechanisms in place to ensure compliance with the accounting standards. Management''s view on the instant cases are explained in the paras 4 and 5 above.

8. Qualification in the report on internal financial controls regarding assessment of carrying value of investments in GMIAL and GKUAEL - Management responses are provided in para 3 above.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its EPC business is required to be audited.

The Board, on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy S Associates, Cost Accountants as cost auditors for conducting the audit of cost records of the Company for the FY 2016-17.

Accordingly, a Resolution seeking Member''s ratification for the remuneration to M/s. Rao, Murthy S Associates, Cost Accountants is included in the Notice convening the Annual General Meeting.

Secretarial Auditor

The Board has appointed M/s. V. Sreedharan S Associates, Company Secretaries, a firm of Company Secretaries in Practice, to conduct Secretarial Audit for the FY 2015-16. The Secretarial Audit Report for the FY ended March 31, 2016 is annexed herewith as "Annexure D" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Disclosures: CSR Committee

The CSR Committee comprises of Mr. R.S.S.L.N. Bhaskarudu as Chairman, Mr. B.V.N. Rao and Mr. G.B.S. Raju as members.

Audit Committee

The Audit Committee comprises of Mr. N. C. Sarabeswaran as Chairman, Mr. S. Rajagopal, Mr. R. S. S. L. N. Bhaskarudu and Mrs. Vissa Siva Kameswari as members.

All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has a vigil mechanism named Whistle Blower Policy, which provides a platform to disclose information, confidentially and without fear of reprisal or victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrong doing within the Company. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, six (6) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Particulars of Loans, Guarantees and 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.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in "Annexure E".

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT. 9 is provided in "Annexure F".

Particulars of Employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as "Annexure G".

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure, other than the Executive Chairman and Managing Director, are related to any Director of the Company.

Developments in Human Resources and Organization Development

The Company has robust process of human resources development which is described in detail in MDA section under the heading "Developments in Human Resources and Organization Development at GMR Group".

Changes in Share capital

Rights Issue:

During the year, your Company had issued 934,553,010 equity shares of face value of Rs. leach for cash at a price ofRs. 15 per equity share (including premium of Rs. 14 per equity share) for an amount aggregating to Rs. 1,401.83 Crore on rights basis to the eligible equity shareholders of your Company in the ratio of 3 equity shares for every 14 fully paid-up equity shares held by the eligible equity shareholders on the record date.

Conversion of CCPS into Equity Shares:

During the year, the Company converted CCPS Series A and B preference share ofRs. 568.33 Crore and Rs. 568.34 Crore respectively into equity shares. The preference share of Series A CCPS were converted into 359,478,241 equity shares of Rs. 1 each at conversion price of Rs. 15.81 per equity share (including premium of Rs. 14.81 per share) and Series B CCPS were converted into 380,666,645 equity shares of Rs. 1 each at conversion price of Rs. 14.93 per equity share (including premium of Rs. 13.93 per share). Accordingly, preference share capital had decreased by Rs. 1,136.67 Crore and equity share capital had increased byRs. 74.01 Crore.

The total paid capital of the Company as on March 31, 2016 after the above issues is Rs. 603.59 Crore.

Forfeiture of money received against share warrant:

During the year, the Board of Directors of the Company had approved the forfeiture of Rs. 141.75 Crore advance received against share warrants, as the warrant holders did not exercise the option within the due date. The amount is transferred to Capital Reserve account.

Environmental Protection and Sustainability

Since inception, sustainability has remained at the core of our business strategy. Besides economic performance, safe operations, environment conservation and social well-being have always been at the core of our philosophy of sustainable business. In anticipation of upcoming regulations and requirements, the Company has invested substantially and allocated other resources to proactively adopt and implement manufacturing / business processes to increase its adherence to environmental standards and enhance its industry safety levels. At GMR Group, the challenges due to the Company''s operations related to EHS aspects of the business, employees and society are mapped and mitigated through a series of systematic and disciplined sets of policies and procedures.

The Company continues to abide by regulations concerning the environment by allocating substantial investments and resources on a continuous basis to adopt and implement pollution control measures. Our continual endeavor to go beyond compliance and conserve natural resources helps to march towards attaining excellence in environmental management and efficient and sustainable operations as well. As the Company operates in an increasingly resource-constrained world, being environmentally conscious and efficient are key to our operations. The Company has a Corporate Environment, Health, Safety and Quality (EHSQ) Policy to articulate, guide, and adopt an integrated approach towards implementing EHSQ objectives and the Company remains committed towards the said policy. These established systems certified by reputed certifying agencies have helped to monitor and manage our operations systematically, safely and in environmental friendly manner. When such practices become institutionalized, they protect environment, life, assets and reduce costs.

The Company recognizes the challenge and understands the global thrusts for minimizing the effect of developmental projects towards global warming. The Company has developed various projects voluntarily and some of the projects are under development stage, which ultimately reduces GHG emissions into the atmosphere and thus, minimizing the global warming effect. The Company has evolved as Sustainability leader by registering 7 CDM Projects with UNFCCC.

As a responsible corporate citizen, the Company is striving to meet the expectations of neighboring communities around our plants and other locations through GMR Varalakshmi Foundation. The foundation works closely with them and strives to impact the lives of millions of farmers, youth, women and children through numerous programs for their benefit.

Energy Sector

GMR Energy Sector has continuously ventured to promote cleaner fuel operations and renewable energy. A super critical technology power plant was developed at Chhattisgarh. The 25 MW capacities Solar Photo-Voltaic based power generation and 2.1 MW and 1.25 MW wind turbine generators in the State(s) of Gujarat and Tamil Nadu respectively, with the total capacity of the wind turbine generator being 3.35 MW are fully operational, with commitment towards sustainability in terms of clean and renewable energy resource. Further, GRSPPL, a wholly owned subsidiary of GEL has also commissioned a 1 MW Solar power project in Rajam, Andhra Pradesh in February 2016.

GMR Energy sector has aligned its energy business with its comprehensive "EHS Framework", adopting best manufacturing practices, optimizing energy, natural resources and technology, best available practices, go beyond compliance, etc.

All the operating units have all necessary statutory clearances in place and are in compliance with environmental regulations. The Company has adopted state-of-the-art systems and measures to control emissions and effluent in design stage itself. Hazardous wastes management and disposal has been in accordance with Central Pollution Control Board (CPCB) guidelines. Continuous Stack Emission Monitoring System (CEMS) and Continuous Ambient Air Quality Monitoring Systems (CAAQMS) at power plants have been set for monitoring of vital pollution parameters on real time basis.

Also, each of the operating units has dedicated Effluent Treatment Plant to treat waste water from the units and utilize or discharge in accordance with Pollution Control Board Norms. All parameters like stack emissions, ambient air quality, water quality, noise level etc., are maintained well within the stipulated norms. The monitoring reports are submitted periodically to statutory authorities. Internal audits and surveillance audits as per the requirements of ISO certifications are conducted and any observation or non-conformance is dealt with utmost seriousness. The system is managed by dedicated EHS team and steered frequently at Apex level for quick actions.

Various employee engagement campaigns are conducted at plant by celebrating World Environment Day, National Safety Week, National Fire Service Week, National Cleanliness Day, Road Safety Awareness Week, Energy Conservation Week, Earth Day etc., to create awareness and generate ideas for implementation. Regular mass plantation is organized with involvement of employees, their families and nearby villagers. Dense green belt is developed at many sites and is under progress at few project sites. Fruit bearing tree species are also being planted. Its survival is ensured with proper care.

Systems and processes as per Global Reporting Initiative (GRI-G4) are being implemented across all the power plants. Energy Sector is publishing its Sustainability Report every year since FY 2013-14 as per GRI-G4 guidelines, which are made available to all its relevant stakeholders. Sustainability reports are also available on Company website. Further, Energy Sector initiated and adopted GRI-G4 based Sustainability S EHS Management software E-tool titled ''SoFi'' for capturing online sustainability data of all operating assets and projects - first in the power sector in India.

GWEL has been certified for ISO 9001:QMS, ISO 14001:EMS and OHSAS 18001 by M/s BVCI. In the year 2015 GWEL implemented and certified for ISO 50001: Energy Management System from M/s BVCI. Under the "Sampoorna Swachhata" initiative 5S implementation programmes were carried out and GWEL is certified for deploying ''5S'' practices at plant in January 2016 by National Productivity Council (NPC). GWEL also implemented waste management initiative by installing "Mechanized bio- composter" for converting food wastes into manure. 89% of fly ash generated during FY 2015 - 16 was utilized for cement making, bricks making, etc. To manage the wellness at work place, series of programmes under "Nirmal Jivan" initiatives like Navchetna Shibir for employees, fun ''Saturday'' for stress management, counseling of all employees with dietician, health awareness, Yoga Shibir and motivational programs for employees and their family members were organized. GWEL successfully conducted series of EHS awareness programs, Earth day, World Environment day, National Safety week and observing National Fire Service week, various training programs on Permit to Work (PTW) system, emergency response plan, fire - fighting, electrical safety, chemical handling, gas cylinder handling conducted to employees and contractual employees. Mock drills on scenarios such as fire in warehouse, hydrogen leakage from generator, fire in coal crusher, ash leakage from ash silo were conducted. During FY 2015-16, GWEL planted 6000 fruit bearing and 14000 forest tree species under "Sustainable farming based greenbelt development" initiative. Testimonial to all such initiatives are receiving SHRUSHTI''s Good Green Governance Award-2015, Golden Peacock Occupational Health and Safety Awards - 2015, Greentech

Occupational Health and Safety Awards - 2015, MEDA Award 2016 for Energy Management from Government of Maharashtra in FY 2015-16.

GKEL is fully compliant with the statutory norms required for operation of the plant. Besides various environmental protection initiatives, audio visual safety trainings, Behavior Based Safety (BBS) trainings, work permit system with Lock Out and Tag Out (LOTO), House Keeping drive with "5S", Hazard dentification S Risk assessment (HIRA) were also implemented to inculcate positive safety culture amongst workforce. Following Surveillance Audit of Integrated Management System (IMS), GKEL received ISO 14001: EMS, OHSAS18001 and ISO 9001: QMS, certificates. Various campaigns viz., World Earth Day, World Environment Day, Road Safety Awareness Week, National Safety Day / Week, Pollution Prevention Day were observed to create environment awareness among the employees and contract workforce. 47% of the total ash generated in the FY 2015-16 (1387671.71 MT) has been utilized for brick manufacturing and land development. In existing green area, around 50,157 saplings were planted covering additional area of about 64.5 acres during FY 2015-16.

GCHEPL has valid factory License from Inspectorate of Factories, Hazardous waste authorization and Bio medical waste authorization from Chhattisgarh Environment Conservation Board. GCHEPL has also obtained the amendment for usage of domestic coal from MoEF. In FY 2015-16, total 70,172 saplings were planted over approximately 74.32 acres within plant premises. GCHEPL received ISO 14001: EMS S OHSAS 18001 certificates for implementing Integrated Management System (IMS). Workforce at GCHEPL enthusiastically participated in various campaigns viz., World Water Day, World Environment Day, Road Safety Awareness Week, National Safety Day / Week S Fire service day. No major incident was reported in FY 2015-16. For all operational activities and maintenance, SAP based PTW system and other work permits are followed. Compliance with Personal Protective equipment is ensured while working. EHS training is imparted to all new and existing employees every year.

GVPGL and GREL units are gas based power plants. Both units are certified for ISO 9001:2008, ISO 14001:2004 and OHSAS 18001: 2007 by M/s. GL-DNV. EHS practices are deployed to achieve the highest level of performance. For assessment of EHS practices, external safety audit was conducted at GVPGL, all observations were suitably addressed with action plan. EHS training is imparted regularly like ''First Aid'' through M/s. St. John Ambulance. Mock drills for each plant were conducted on different emergency scenarios. EHS initiatives like celebration of Road Safety Week, National Safety Week Fire Service Week, World Earth Day and World Environment Day are done at plant sites to enhance the EHS awareness level. On day of ''Karthika Vanamahotsavam'', 100 tree saplings were planted.

GMR Energy Limited (GEL), Kakinada has established efficient EHS procedure and practices and has achieved zero Lost Time Injury Frequency Rate (LTIFR) with nil reportable accidents in FY 2015-16. Plant is compliant with all statutory norms and procedures. GEL celebrated World Environmental Day, Safety Week, Road Safety Week, Fire Service Week, Earth day and Karthika Vanamahostavam. Swachh Bharat campaign is in progress. Periodical surveillance audit of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001: 2007 has been done by M/s. GL-DNV. GEL successfully implemented 2 environmental management programmes on energy conservation and minimization of water consumption. To make the area green, plantations were done by employees in Plant premises as well as nearby schools.

GMR Bajoli Holi Hydro Power Project is being constructed with compliance to all applicable EHS rules, regulations and best practices. There was NIL reportable major incident at site and project achieved 54,18,369 safe man hours in FY 2015-16. First Surveillance audit for Integrated management system (IMS) covering ISO 9001:2008, ISO 14001:2004 and OHSAS 18001: 2007 certificates was conducted by M/s TUV India. Periodical medical check- ups were conducted for employees and contract workers. Regular medical camps are also organized for workforce and community. Safety tool box talk, safety training and site inspections are conducted on daily basis. 100% contract employees were covered under EHS awareness on utilization of PPE at site. All critical air quality parameters inside tunnels are displayed near portal of adits. First aid medical assistance set up has been created at site which is managed by a qualified doctor and paramedic staff with ambulance. Various EHS reviews are conducted every month at site. In FY 2015-16, approximately 2,800 saplings were planted at project and colony sites.

Airport Sector

Airport Sector embraces the concept of sustainability by managing activities in environment friendly manner, minimizing natural resource utilization and maintaining collaborative relationships with the community and stakeholders. Our strategy for long-term stability and continual improvement is focused on cost-effective operation, social responsibility, environment and ecology oriented business approach and practices, which are governed and managed by latest technological processes, improved infrastructure, efficient operational measures, continuous learning and education, effective change management and communication with all possible stakeholders'' support.

Environment Sustainability Management is an integral part of our business strategy which helps in achieving social credibility and business sustainability by efficient integration of policy, system, procedures, infrastructure and community support. The Company adopted all possible proactive sustainable approach for the airports to develop an environment friendly posture that accommodates the community''s concerns while still meeting all regulatory requirements. Our key environmental and social elements which have direct/indirect impact on society are aircraft noise, emission, air quality, water and waste water, solid waste and conservation of natural resources. A dedicated team of professionals is deployed to deal with all areas of environmental and social concerns. All the impacts associated with its business aspect are being effectively resolved by working closely with the communities around the airports by proper knowledge sharing forums, media communications, communication to stakeholders and stakeholders'' meeting, further with the support of regulatory and government agencies.

Air and Water management is ensured by regular monitoring, analysis and following government regulations and guidance. Solid and Hazardous wastes are handled as per the applicable rules. Sewage Treatment Plant is operational to treat the waste water. Entire treated water is being reused appropriately for flushing and irrigation purposes.

DIAL

Environment Sustainability Management is an integral part of your company''s business strategy. It focusses highly on natural resource conservation, pollution preventions and skill developments on the part of business sustainability at Delhi Airport by efficient integration of policy, system, procedures, infrastructures and community supports.

DIAL is committed to conduct its business in an environment and social friendly manner by adopting all possible operational and technological measures to minimize the impact of its activities on the environment and society.

DIAL has adopted all possible proactive sustainable approach for the airport to develop an environment friendly posture that accommodates the community''s concerns, while still meeting all regulatory requirements.

Some of the achievements of DIAL during this FY are:

Green Company Gold Level Award on June 25, 2015.

Cll - Green Company Best Practices Award in Renewable Energy and GHG Mitigation, June 25, 2015.

National Award for Excellence in Energy Management by Cll, October, 2015.

Golden Peacock Sustainability Award 2015 in October 2015.

DIAL CEO represented International Aviation community along with CAO President Dr. Aliu at Conference of Parties (COP 21) in Paris on December 03, 2015.

Release of knowledge sharing document on "Aviation Best Practices: Climate Change and Emission Reduction", on August 25, 2015.

Successfully completed ISO 14001 - Environment Management System sustenance audit by M/s. DNV (Sustaining from 2009).

Sustain "Optimization Level" accreditation by Airport Council international (ACI) for Carbon Management implemented at IGI Airport since 2012.

Achieved a Carbon intensity of 2.32 kgC02/Pax during the year 2015-16.

Sixth ACI Asia-Pacific Regional Environment Committee (REC) seminar was organized at Delhi Airport on March 10-11, 2016.

DIAL is also Energy Security Steering Committee Member of TERI Business Council for Sustainable Development.

Regular Training on Environmental Management and Sustainability Management.

Environment Day celebration and Tree plantation on every World Environment Day event on 5th June.

GHIAL

GHIAL operates the Rajiv Gandhi International Airport (RGIA) at Hyderabad. GHIAL considers EHS as an integral part of business and is committed to conducting business in an environment-friendly and sustainable manner, in line with Group''s Vision, Mission, Values, Beliefs and Corporate Policies. GHIAL believes in the concept of 3R principles (Reduce-Reuse-Recycle) and actively promotes the same among all its stakeholders. During the year, the organisation has focused on actively promoting safety culture and sustainable operating environment through optimal use of all resources. All the initiatives were successfully implemented with the active cooperation by all the internal and external stakeholders.

GHIAL is committed to develop, nurture and proactively promote EHS culture with the philosophy of ''Safety first.''

As part of its continual improvement of EHS performance, GHIAL has initiated many safety awareness programmes, trainings, audit and inspections on a continual basis. During the year, there was no incident involving fatality. The ''Safety Management System'' (SMS) at GHIAL is robust and is currently in Phase-4 in terms of its maturity and meticulous implementation which is in line with DGCA guidelines. The Aerodrome License has been renewed and is valid till March 03,2018. Further, GHIAL has been re-certified by BVQ for IMS, (OHSAS 18001) for the period from January 01, 2016 to December 31, 2018.

As a continual improvement of EHS initiatives, the organization has identified the ''Human factors'' in safety occurrences as a primary concern and engages the stakeholders through various forums to enhance awareness on this crucial factor. In addition to this regular safety alerts, notifications are sent across as a proactive safety measure. The Safety Management System at GHIAL has been comprehensive with the combination of DGCA mandates, British Safety Council guidelines and 0HSAS-18001 framework which makes it a unique feature.

Safety assurance is closely monitored through various safety oversight activities which include annual safety audits and inspections of all key stakeholders and service providers encompassing safety process, personnel competencies and process audits. Additionally, ''Management of Change'' is a critical requirement to ensure continued safety practices which is exercised through carrying out Safety Assessment of all major changes within the airport and meticulously maintained risk register. Various safety concerns are deliberated and adequately addressed in various safety committees including Runway Safety Committee, Apron Safety Committees, Works Coordination Committee etc.

To maintain ecological balance at RGIA, green belt has been developed in an area of 273 hectares with various plant species and 971 hectares of natural greenery has been left undisturbed. RGIA has won the best landscape award at the Garden festival for the sixth consecutive year in 2016 from the Commissioner Horticulture, Dept. of Horticulture, Govt, of Telangana.

RGIA has achieved energy saving of 3.397 million kWh (kilowatt hour) in the last five years from various energy conservation practices. It has reduced its carbon footprint by 5578 tonnes in 2015 over base year 2009. RGIA received "Certificate of Merit" in National Energy Conservation Awards 2011 from Bureau of Energy Efficiency, Government of India for its achievements.

It has also received the Confederation of Indian Industries (Cll) Award for "Excellent Energy Efficient Unit" during the 16th National Award for Excellence in Energy Management 2015.

The RGIA Passenger Terminal Building has ''Leadership in Energy and Environmental Design'' (LEED) certification for its unique design, which allows maximum natural lighting, and other features that enable optimal use of energy and water.

Waste-water is being treated in STPat site and being reused for flushing and plantation. Sludge from STP is being used as manure.

At RGIA, the rainwater net recharge is estimated at 1.729 million cubic metre per annum. Surface water use and several water saving measures contribute to water conservation.

Food waste generated from the airport is converted as compost on the site. Compost is used as manure in place of Chemical Fertilizers. Paper and plastic waste are handed over to recyclers for reprocess and reuse.

RGIA very actively promotes environmental awareness to the airport community and to the passengers by observing various days like World Environment Day, World Forestry Day, Ozone Layer Protection Day, Earth Day, etc.

Further the other details with respect to Environmental Protection and Sustainability have been explained in the MDA Report.

Events subsequent to the date of financial statements

There are no material changes and commitments affecting financial position of the company between March 31, 2016 and Board''s Report dated August 06, 2016.

Change in the nature of business, if any

There is no change in the nature of business of the Company.

Significant and Material Orders passed by the Regulators

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future.

Deposits

During the year under review, the Company has not accepted any deposits from the public.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

The following is a summary of sexual harassment complaints received and disposed off during the FY ending March 31,2016:

Number of complaints received : NIL

Number of complaints disposed off : NIL

Acknowledgements

Your Directors thank the lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large for their valuable support and co-operation. Your Directors also thank the employees of the Company and its subsidiaries for their continued contribution, commitment and dedication.

For and on behalf of the Board

Sd/-

Place: New Delhi G.M.Rao

Date: August 06, 2016 Executive Chairman


Mar 31, 2015

Dear Members,

The Board of Directors present the 19th Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2015.

Financial Results and State of the Company''s Affairs:

Your Company, as a holding company, operates in four different business sectors - Airports, Energy, Transportation and Urban Infrastructure through various subsidiaries, associates and jointly controlled entities. The Company has Engineering, Procurement and Construction (EPC) business as a separate operating division to cater to the requirements for implementing the projects undertaken by the subsidiaries and others.

The Company''s consolidated revenue, expenditure and results of operations are presented through consolidated financial statements and the details are given below:

( Rs. In Crore)

Particulars March 31, March 31, 2015 2014

Revenue from operations 11,087.68 10,653.22

Revenue share paid / payable to concessionaire grantors (2,064.86) (1,943.69)

Operating and administrative expenditure (6,468.18) (5,957.94)

Other Income 327.46 315.87

Finance Costs (3,571.86) (2,971.88)

Utilisation fees - (186.18)

Depreciation and amortisation expenses (1,812.53) (1,454.99)

(Loss) / profit before exceptional items, tax expenses, minority interest and share of (loss)/ profit of associates (2,502.29) (1,545.59)

Exceptional Items:

Profit on dilution in subsidiaries - 69.73

Profit on sale of jointly controlled entities 34.44 1,658.93

Profit on sale of assets held for sale - 100.54

Loss on impairment of assets in subsidiaries (115.74) (8.95)

Loss on account of provision towards claims recoverable (130.99) -

Breakage cost of interest rate swap (91.83) -

(Loss)/ profit before tax expenses, minority interest and share of (loss)/ profit of associates (2,806.41) 274.66

(Loss)/ profit from continuing operations before tax expenses, minority interest and share of (loss)/ profit of associates (2,814.84) (1,416.66)

Tax expenses (including tax adjustments for prior years, deferred tax and MAT credit entitlement) of continuing operations (152.56) (161.60)

(Loss)/ profit from continuing operations after tax expenses and before minority interest and share of (loss)/ profit of associates (2,967.40) (1,578.26)

Share of (loss)/ profit of associates (net) (12.98) -

Minority interest - share of loss/ (profit) from continuing operations 242.45 (115.27)

(Loss)/ profit after minority interest and share of (loss)/ profit of associates from continuing operations (A) (2,737.93) (1,693.53)

Profit / (loss) from discontinuing operations before tax expenses and minority interest 8.43 1,691.32

Tax expenses (including tax adjustments for prior years, deferred tax and MAT credit entitlement) of discontinuing operations (0.25) (4.65)

Profit / (loss) after tax expenses and before minority interest from discontinuing operations 8.18 1,686.67

Minority interest - share of (profit) / loss from discontinuing operations (B) (3.54) 16.87

Profit / (loss) after minority interest from discontinuing operations (A B) 4.64 1,703.54

(Loss)/ profit after minority interest from continuing and discontinuing operations (2,733.29) 10.01

Net deficit in the statement of profit or loss - Balance as per last financial statements (1,183.56) (756.33)

Loss before appropriation (3,916.85) (746.32)

Appropriations (90.04) (437.24)

Net deficit in the statement of profit or (4,006.89) (1,183.56) loss

Earnings per equity share (Rs.) - Basic and diluted (per equity share of Rs. 1 each) (6.46) 0.03

Earnings per equity share (Rs.) from continuing operations - Basic and diluted (per equity share of Rs. 1 each) (6.47) (4.35)

Earnings per equity share (Rs.) from discontinuing operations - Basic and 0.01 4.38 diluted (per equity share of Rs. 1 each)

Consolidated revenue from operations grew by 4.08% from Rs. 10,653.22 Crore to 11,087.68 Crore. Airport, Energy, Highways, EPC and other segments contributed Rs. 5,463.73 Crore (49.28%), Rs. 4,450.58 Crore (40.14%), Rs. 741.74 Crore (6.69%), Rs. 86.84 Crore (0.78%) and Rs. 344.79 Crore (3.11%) respectively to the revenue from operations.

Improved operating performance in Energy sector resulted in consolidated revenue increasing from Rs. 10,653.22 Crore in the previous year to Rs. 11,087.68 Crore in the current year. This has also compensated for the negative impact of the Airports sector revenue on account of non-levy of UDF in GHIAL and sale of ISG as well as lower EPC sector revenue on account of lower business. Commissioning of EMCO and Kamalanga power plants during previous year have resulted in increase in operational costs, finance costs and depreciation charge, but these plants are expected to contribute significantly to the Group''s profitability in the near future.

During the current year ended March 31, 2015, as the efforts for revival of GKUAEL project did not succeed, GKUAEL had issued a notice of dispute to NHAI, invoking arbitration provisions as per concession agreement and transferred the project costs of Rs. 130.99 Crore to claims recoverable. In view of the SEBI direction received on this account, the Group has made provision for such claims and disclosed the same as an exceptional item in the financial statements. Based on an internal assessment, an impairment provision of Rs. 61.80 Crore was made against the goodwill pertaining to SJK and Rs. 53.94 Crore against certain other entities and disclosed as exceptional item in the financial statements.

DIAL has refinanced its external commercial borrowings during the year and as a result, cancelled certain outstanding Interest Rate Swap, paid Rs. 91.83 Crore towards such cancellation and disclosed the same as an exceptional item in the financial statements.

It was another year of extreme challenges with continued constraints on financing and fuel supply, but your Company successfully weathered it and enhanced its fuel security and raised additional capital to retire its existing debts. During the year, the Company successfully raised additional equity of Rs. 1,476.77 Crore through Qualified Institutions Placement (QIP), Rs. 141.75 Crore (being 25% of the consideration amount for allotment of the warrants) through issuance of 18,00,00,000 warrants convertible into 18,00,00,000 Equity Shares to GMR Infra Ventures LLP, promoter group entity and Rs. 1,401.83 Crore through Rights issue, which was concluded during April Rs.15, apart from favorable refinancing of existing debts of various group entities. Your Company has achieved fuel security for Chhattisgarh power plant by winning two coal mines and successfully tied up gas supply for 25% PLF of Vemagiri power plant (387 MW) and Rajahmundry power plant (384 MW) for four months. Your Company, along with its partner Megawide Construction Corporation, has taken full operational control of the Mactan Cebu International Airport and has also achieved financial closure for the project.

Keeping pace with the Group''s philosophy, Transportation and Urban Infrastructure sector is also constantly evolving itself in line with the business opportunities and available skill sets. While doing so, during the year under review, your Company took a conscious decision to foray into the EPC segment of Railways and since have been fairly successful in bagging three projects, Dedicated Freight Corridor Corporation (DFCC) being the marquee one amongst them worth alone at Rs. 5,080 Crore.

Presented below are the standalone financial results of the Company:

( Rs. In Crore)

Particulars March 31, March 31, 2015 2014

Revenue from operations 649.74 786.29

Operating and administrative expenditure (200.03) (525.39)

Other Income 19.48 4.77

Finance costs (537.29) (408.71)

Depreciation and amortization expenses (20.03) (8.42)

(Loss) / Profit before exceptional items and tax expenses (88.13) (151.46)

Exceptional items:

Profit on sale of investment in subsidiary / jointly controlled entity - 472.06

(Loss) on redeemable preference shares - (131.25)

Provision for diminution in the value of investments in subsidiaries / jointly controlled entities (262.40) (1.27)

(Loss) / Profit before tax (350.53) 188.08

Tax expenses (including deferred tax and MAT credit entitlement) (2.12) (22.18)

(Loss) / Profit for the year (352.65) 165.90

Surplus in the statement of profit and loss - Balance as per last financial statements 429.37 309.06

Transfer from debenture redemption reserve 46.25 108.75

Profit available for appropriation 122.97 583.71

Appropriations:

Transfer to debenture redemption reserve 49.36 108.50

Depreciation adjustment 5.30 -

Equity dividend* 4.69 38.92

Tax on equity dividend* 0.80 6.92

Proposed preference dividend (March 31, 2014 Rs.1,868) 0.01 0.00

Tax on proposed preference dividend [Rs. 23,139 (March 31, 2014 Rs. 318)] 0.00 0.00

Net surplus in the statement of profit and loss 62.81 429.37

Earnings per share (Rs.) - Basic and Diluted (0.83) 0.43

*current year equity dividend and tax on equity dividend represents equity dividend and tax pertaining to the previous year ending March 31, 2014, paid during current year on the shares issued during the year pursuant to QIP before the record date

The revenue from operations of the Company on standalone basis has reduced by 17.36% from Rs. 786.29 Crore to Rs. 649.74 Crore on account of completion of majority of the projects handled by the EPC segment. Reduction in EPC revenue (Rs. 303.78 Crore, 64.82%) has been compensated to great extent by the increase in other operating income (Rs. 167.23 Crore). The operating and administrative expenditure has also accordingly reduced by 61.93% from Rs. 525.39 Crore to Rs. 200.03 Crore.

During the current year ended March 31, 2015, based on an internal assessment, the Company has made a provision of Rs. 262.40 Crore towards diminution in value of its investment in GHL and disclosed the same as an exceptional item in the financial statements. The diminution in value has primarily arisen on account of the provision made against the GKUAEL project claim and accumulated losses of GHVEPL.

Dividend / Appropriation to Reserves

Your Directors have not recommended any dividend for the financial year 2014-15. Preference dividend aggregating to Rs. 1,13,667 for the financial year 2014-15 @ 0.001% per annum on 1,13,66,704 Compulsorily Convertible Preference Shares (CCPS) of face value of Rs. 1,000/- each has been provided and the same will be paid to the CCPS holders subject to the approval of shareholders at the Annual General Meeting.

Reserves

The net movement in the major reserves of the Company for FY 2014-15 and the previous year are as follows:

(Rs. in Crore)

Particulars March 31, March 31, 2015 2014

General Reserve 40.62 40.62

Securities Premium Account 7,658.71 6,286.53

Surplus in Statement of Profit and Loss 62.81 429.37

Debenture Redemption Reserve 121.33 118.22

7,883.47 6,874.74

Management Discussion and Analysis Report

Management Discussion and Analysis (MDA) Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report.

The detailed review of operations of each subsidiary''s business is presented in the respective company''s Board''s Report and a brief overview of the major developments thereof is presented below. Further, MDA, forming part of this Report, also brings out review of the business operations of various subsidiaries and jointly controlled entities.

Airport Sector

Company''s airport business comprises of 3 operating airports viz., Delhi and Hyderabad International Airports in India and Mactan Cebu International Airport in Philippines.

An overview of these assets during the year is briefly given below:

Delhi International Airport Private Limited (DIAL)

DIAL is a joint venture (JV) between GMR Group (54%), Airports Authority of India (AAI) (26%), Fraport AG Frankfort Airport Services Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private Limited (10%) and has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi.

Highlights of FY 2014-15:

DIAL surpassed the 40 million passenger mark in FY 2014-15, witnessing a growth of 11% in traffic over previous year. Strong growth in domestic cargo segment propelled DIAL to surpass Mumbai Airport in cargo traffic with a 15% overall growth in FY 2014-15 over previous year. Due to delay in determination of tariff for the 2nd control period, the tariffs for the 1st control period have continued. DIAL completed a landmark issuance and pricing of the inaugural USD 288.75 million 7-year Senior Secured bond offering which was rated Ba1 by Moody''s and BB by S&P.

TATA-SIA Airlines Limited "Vistara" made IGIA its operations hub. Fly Dubai, Pegasus Asia, Nepal Airlines and Transaero Airlines commenced their International operations from IGIA. IGIA became the first airport in the country to receive Super Jumbo Airbus A380 of the Singapore Airlines.

Strong focus on developing organizational culture based on operational excellence and customer focused initiatives helped DIAL become the first Indian airport to be ranked number 1 airport in the world in the 25-40 million passengers per annum (mppa) category by achieving a score of 4.90 in 2014.

Awards and Accolades received in FY 2014-15:

* Skytrax World Airport Award 2014-15 for "Best Airport in India / Central Asia" and "Best Airport Staff in India / Central Asia";

* "Golden Peacock National Quality Award" 2015 for building a culture of Total Quality at IGI Airport;

* "International Safety Award 2015" from the British Safety Council with Distinction for the organization''s focus and commitment towards providing a safe airport operation;

* "Cll - 5S Excellence Awards 2014" - Northern region; Service sector by Confederation of Indian Industries (CII).

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a JV Company promoted by the GMR Group (63%) in partnership with AAI (13%), Government of Telangana (13%) and MAHB (Mauritius) Private Limited (11%) and has entered into a long-term agreement to operate, manage and develop the Rajiv Gandhi International Airport (RGIA), Hyderabad.

Highlights of FY 2014-15:

GHIAL handled a record volume of passengers, cargo and Air Traffic Movements (ATMs) during the financial year. Passenger traffic during the year crossed 10 million for the first time and cargo handling exceeded 100,000 metric tonnes (MT) for the first time since inception, underlining the significant growth attained by the airport in the 7 years of operations. The year 2014-15 also showed remarkable progress towards GHIAL''s Mission of being the Gateway of Choice and Preferred Logistics Hub for South and Central India region, marked by additions to the airline count on both passenger (2 international and 1 domestic) as well as cargo (2 international) fronts. Towards ensuring a well-rounded and enjoyable experience to its passengers, the airport also introduced a number of enhancements to its retail and shopping experience, highlighted by a modern Video Wall and a number of new stores and retail outlets at the passenger terminal. During the year, GHIAL successfully overcame the financial challenges imposed by the Single Till/Nil UDF regime through a combination of revenue enhancement, improvement in cost efficiencies, tight control over expenditures and cash flow management. Despite the challenges, GHIAL also maintained its focus on service quality and passenger delight and the airport continued to win accolades from passengers and industry associations for its excellence. Airports Council International (ACI) ranked RGIA among the top 3 in the world for Airport Service Quality (ASQ) for the 6th year in a row.

Awards and Accolades received in FY 2014-15:

* World''s 3rd Best Airport 2014 in ASQ Rating by ACI;

* ACI''s Director General''s Rolls of Excellence in ASQ;

* Cll National Award for Excellence in Energy Management 2014;

* Best Landscape - Garden Festival 2015 (5th time in a row);

* RGIA has been rated as India''s 3rd Best Airport, by air travellers at the 2015 World Airport Awards held at Passenger Terminal EXPO Paris, France in March 2015;

* RGIA is also rated as the 6th Best Regional Airport in Asia and 10th Best Airport in 5 - 10 million passengers per annum (mppa) category.

Aerotropolis Development

As more and more aviation-oriented businesses are being drawn to airport cities and transportation corridors radiating from them, a new urban form is emerging-the Aerotropolis-stretching up to 20 miles (30 kilometers) outward from some airports. This concept, developed by Dr. John Kasarda, has been adopted by GMR Group at its airports in Hyderabad and Delhi and GMR Group is working towards developing an ecosystem around the airports. Both Delhi and Hyderabad have completed the master plan for their landside developments and are engaged in the development of physical infrastructure and discussions with potential tenants.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC is a JV between GMR (40%) and Megawide Corporation (60%) and has entered into a concession agreement with Mactan Cebu International Airport Authority for development and operation of the terminal and landside facilities of Mactan Cebu International Airport for a period of 25 years. GMCAC is expected to build a new terminal also.

Highlights of FY 2014-15:

GMCAC has taken operational responsibility for the airport on 1st November, 2014 for the existing terminal. Financial closure of the airport was completed in February 2015. GMCAC is focusing on increasing its traffic base; both domestic and international and is working closely with the airline community and the government bodies to boost tourist traffic growth which is a key driver for the airport profitability. As per the concession agreement, the GMCAC is expected to build a new terminal. However there has been a delay in the handover of land and GMCAC is in discussions with the grantor to work out a mechanism to expedite handover of land and providing compensation to GMCAC in line with the provisions of the concession agreement.

GMR Male International Airport Private Limited (GMIAL)

GMR Group along with its partner Malaysia Airports (Labuan) Private Limited are engaged in arbitration with Government of Maldives (GoM) and Maldives Airport Company Ltd. (MACL) after the latter repudiated the agreement in December 2012. In order to expedite the progress of the arbitration, both GMR Group and GoM have agreed to bifurcate the arbitration in 2 phases; first phase will focus on questions of liability and what forms of damages or compensation are recoverable by GMR while the second phase will be to quantify the amount so recoverable. In April 2014, the hearings for the first phase of arbitration were completed. In June 2014, the tribunal ruled that the unilateral termination of the concession agreement by GoM and MACL was illegal and repudiatory. Broadly, the Tribunal declared that the concession agreement was valid and binding and was not void for any mistake of law or discharged by frustration of bargain or administration, the GoM and MACL are jointly and severally liable for damages to GMIAL for loss caused by wrongful repudiation of the agreement and that the quantification of the damages and the interest thereon will be determined in the next stage of arbitration by the same tribunal.The preliminary hearing for quantification of damages is under process.

GMR Aviation Private Limited

GMR Aviation Private Limited (GAPL) operates and owns one of the youngest fleets in the country and addresses the growing need for charter services in the country. The operations are managed by professionals with robust processes and systems to ensure highest levels of efficiency and safety. At the end of the FY, GAPL has one Falcon aircraft, one Hawker aircraft and one helicopter in its fleet.

Aircraft - Maintenance Repair and Overhaul (MRO)

The MRO facility is a part of aero SEZ of GMR Hyderabad International Airport. With GHIAL buying out 50% stake of Malaysian Aerospace Engineering Sdn Bhd (MAE), GMR Aerospace Technic has become a wholly owned subsidiary of GHIAL. The MRO facility has ultra-modern facilities for aircraft maintenance, painting, avionics upgrades, interior refurbishments, aircraft modifications and structural repairs. It can cater to various types of narrow-body as well as wide-body aircraft belonging to Airbus, Boeing, ATR and Bombardier families. During the year under review, maintenance services were provided to 40 aircraft including B737-800, B737-900, ATR- 72, A320, and A321 for domestic customers and painting on Cessna Citation 560XL and ATR 72-500 aircraft. Additionally Engine Change, Nose Landing gear and Main Landing gear change were carried out on B737-800 and B737-900 aircraft. Apart from the above, seat retrofit was performed on two A320 aircraft. The main customers during the year were Spicejet, Go Air and Jet Airways. With the change in management post acquisition of MAE''s stake, the MRO has seen an upturn in its fortunes and has recently won a maintenance contract for an overseas client and is expected to add another domestic carrier to its fold of customers.

GMR Airports Limited (GAL) CCPS

The Board approved the exercise of call option by the company for purchase of CCPS held by the investors in GAL for the purpose of consolidation of shareholding in GAL (see note 40 (ii) of the consolidated financial statements). The completion of transaction is pending receipt of requisite approvals from the relevant authorities.

Energy Sector

The Energy Sector companies along with its subsidiaries are operating around 2,486 MWs of Coal, Gas, Liquid fuel and Renewable power plants in India and around 4,000 MWs of power projects under various stages of construction and development besides a pipeline of other projects. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements.

Following are the major highlights of the Energy Sector:

A. Operational Assets:

I. Generation:

1. Barge mounted Power Plant, Kakinada, Andhra Pradesh of GMR Energy Limited (GEL):

* GEL operates 220 MW combined cycle barge mounted power plant at Kakinada, Andhra Pradesh. There was no generation of power by the barge mounted power plant during the year ended March 31, 2015 on account of non-availability of gas. Plant is kept under preservation since March 2013. Preservation methods were adopted based on Original Equipment Manufacturers'' (OEM) procedures.

2. GMR Vemagiri Power Generation Limited (GVPGL) (370 MW):

* GVPGL, wholly owned subsidiary of GEL operates a 387.625 MW natural gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh. During the financial year, the plant experienced difficulties like non-supply of gas from Reliance KG-D6 basin. Plant availability was 99.94% and it was not operational during the year. Plant was kept under preservation from May 2013 due to non-availability of gas. Preservation methods were adopted based on OEM procedures and past experiences. O&M contract services were taken over from M/s KPS from April, 2014 and completed one year of operation by GVPGL. The Plant received a total credit of 3,21,755 CERs under Clean Development Mechanism (CDM) for the second and third verification period;

* GVPGL is striving continuously to pursue Ministry of Power (MoP), Ministry of Petroleum and Natural Gas (MoPNG), and Prime Minister''s Office (PMO) for the gas allocation, pooling of gas (imported and domestic gas) and supply of RLNG by importing LNG on short term basis.

3. Diesel Power Plant, Chennai, Tamil Nadu:

* GMR Power Corporation Limited (GPCL), in which GEL holds 51% stake operates a 200 MW diesel powered power plant and sells power to Tamil Nadu Electricity Board (TNEB). The PLF for this tariff year was 34.76% as compared to 47.71% in 2013-14. The plant has successfully completed 16th year of operations & maintenance (O&M) and is effectively implementing all the O&M practices independently on its own. Tamil Nadu Generation and Distribution Corporation Limited (TAGENDCO) extended the PPA from February 15, 2014 to February 14, 2015 with fresh tariff and new terms and conditions;

* GPCL has requested TAGENDCO for extension of PPA from February 15, 2015 and is awaiting clearance for supplying power.

4. Solar Power plant, Charanka Village, Gujarat:

* GMR Gujarat Solar Power Private Limited (GGSPPL), wholly owned subsidiary of GEL operates 25 MW power project at Charanka village, Patan district, Gujarat. GGSPPL has entered into PPA with M/s. Gujarat Urja Vikas Nigam Limited for supply of entire power generation. GGSPPL has achieved commercial operation on March 4, 2012 and received certificate of commissioning from M/s. Gujarat Energy Development Agency ("GEDA"). M/s Indu Projects Limited has been awarded the contract for operation and maintenance of the plant for a period of 5 years. Plant has achieved an Export PLF of 19.3% for FY 2014-15.

5. EMCO Energy Limited (EMCO) - 600 MW:

* The Plant consists of 2 x 300 MW coal fired Units with all associated auxiliaries and Balance of Plant Systems. During the FY 14-15 both the Fuel Supply Agreement (FSA) and Annual Contracted Quantity (ACQ) quantities have been successfully amended to 1.3 Million Tonnes (each) on June 10, 2014, and with this EMCO has a Coal supply Agreement with South Eastern Coalfields Limited (SECL) for a total ACQ of 2.6 Million Tonnes per annum;

* Signed long term PPA with TAGENDCO for 150 MW and with this 100% of the plant capacity is now tied up via long term PPAs;

* Project debt refinanced with 18 months moratorium and 15 year loan repayment at an interest rate of 12.15%;

* Favorable APTEL Order has come on POC charges resulting in incremental revenue of approximately INR 450 Million;

* Plant has achieved a Gross plant load factor (PLF) of 68.8% for FY 2014-15;

* Long Term Access (LTA) granted for full commencement of Dadra Nagar Haveli (DNH) 200 MW from July 2014 onwards and PPA compliance was 87.27%;

* Power Purchase Agreement (PPA) compliance for 200 MW Power Sale to M/s Maharashtra State Electricity Distribution Company Limited (MSEDCL) was 85.56 %;

* 100% Ash Utilization has been tied with nearby Cement Industries for Fly Ash and with Western Coalfields Limited (WCL) for Bottom Ash;

* Weir construction for water availability by Maharashtra Industrial Development Corporation (MIDC) is under way and expected to be made ready in FY 2015-16.

6. GMR Kamalanga Energy Limited (GKEL) - 1,050 MW:

* GKEL in which GMR Energy Limited has 86% stake, with IIF & IDFC holding the balance stake, has developed 1,050 MW (3x 350) coal fired power plant at Kamalanga Village, Orissa;

* The plant is supplying power to Haryana through PTC India Limited and Odisha through GRIDCO Limited and commenced supply of power to Bihar through Bihar State Power Holding Company Limited;

* 85% of the capacity was tied-up in long term PPAs;

* Transmission constraint faced by the project was resolved in November 2014;

* GKEL has received Letter of Assurances from Mahanadi Coalfields Limited for 1050 MW of which 500 MW is for firm linkage and 550 MW is for tapering linkage. During the year under review, 350 MW tapering linkage has been transferred to Eastern Coalfields Limited (ECL). GKEL has signed Fuel Supply Agreement (FSA) for firm linkage for 500 MW and tapering linkage for 200 MW with Mahanadi Coalfields Limited and getting coal supply for firm linkage corresponding to 500 MW and 200 MW for tapering linkage. GKEL has also signed FSA with ECL for 350 MW tapering linkage and coal supply corresponding to tapering linkage for 204 MW has commenced;

* The Hon''ble Supreme Court of India in its Orders dated August 25, 2014 and September 24, 2014 cancelled the allocations of all but four coal blocks made between 1993 and 2010. As a result, the allocation of the Rampia Coal Mine has also been cancelled by the aforesaid Orders. But GKEL coal supply was not impacted because of already executed Firm and Tapering coal supply agreement;

* GKEL has started commercial supply of power to GRIDCO Limited from April 30, 2013 to the State of Haryana through PTC India Limited from February 07, 2014 and to the State of Bihar from September 01, 2014 through Bihar State Power Holding Company Limited under Long Term PPA. GKEL has also sold surplus power on merchant basis to other customers;

* GKEL has completed the construction of dedicated transmission lines to Angul, Odisha for connectivity to City Transmission Utility (CTU) network and to Meramandali for connectivity to Odisha State Transmission Utility (STU) system. With this, GKEL has achieved the capability to evacuate full power from the station and generated full capacity of 1,050 MW on March 30, 2015. During this period, GKEL has generated 4,838 Million Units (MU) of commercial power and sold 4,321 MU, the balance being the auxiliary power consumption.

II. Transmission:

1. Aravali Transmission Service Company Limited (ATSCL):

* ATSCL, the wholly owned subsidiary of GEL, is engaged in implementation of project for 400 kV S/C Hinduan-Alwar transmission line (85 km) and 2 x 315 mva 400/220 kV Grid Substation at Alwar and other associated works in the State of Rajasthan with a total project cost of Rs. 160.90 Crore. This is the second public private partnership (PPP) project of its kind in Rajasthan, which is being executed on Build Own Operate Maintain (BOOM) basis for a concession period of 25 years from date of Project Award;

* Several critical Right of way (ROW) challenges have been successfully resolved and the Transmission Line construction was completed in June, 2014;

* The 400 kV Hindaun-Alwar transmission line was successfully charged on July 25, 2014. Grid Substation was charged on July 31, 2014;

* Deemed COD was considered from July 17,2014 in line with the provisions of Transmission Service Agreement (TSA);

* Tariff Revision Petition was filed with Rajasthan Electricity Regulatory Commission (RERC) seeking compensation in terms of either TSA period extension (to compensate MTSCL on account of delayed grant of transmission license, escalation in project cost due to change in law);

* The asset has performed at more than the target 98% availability.

2. Maru Transmission Service Company Limited (MTSCL):

* MTSCL, the wholly owned subsidiary of GEL, is engaged in implementation of project for 400 kV S/C Bikaner-Deedwana Transmission Line (129 Km), 400 kV S/C Ajmer-Deedwana Transmission Line (106 Km), 220 kV D/C Sujangarh -Deedwana Transmission Line (30 Km) and 2x315 MVA 400/220 kV Grid sub-station at Deedwana and other associated works in the State of Rajasthan with a total project cost of Rs. 248.90 Crore. This is the first PPP project of its kind in Rajasthan, which is executed on Build Own Operate Maintain (BOOM) basis for a concession period of 25 years from date of Project Award;

* COD declared by Order of the RERC from December 16, 2013;

* Relief granted by RERC to pay all unpaid revenue in arrears from December 16, 2013 and is under compliance by the customers;

* Received RERC Order resulting in incremental revenue;

* Tariff Revision Petition was filed with RERC seeking compensation in terms of either TSA period extension (to compensate MTSCL on account of delayed grant of transmission license, escalation in project cost due to change in law);

* The asset has performed at more than the target 98% availability.

B. Projects:

1. GMR Rajahmundry Power Project, Andhra Pradesh - 768 MW:

* GMR Rajahmundry Energy Limited (GREL), a wholly owned subsidiary of GEL is engaged in setting up of 768 MW (2 x 384 MW) combined cycle gas based power project. During the year under review all the equipment of the project were kept under preservation as per the OEM guidelines due to non-availability of natural gas for commissioning and commercial operation;

* GREL is striving continuously to pursue MoP, MoPNG, and PMO for the gas allocation, pooling of gas (imported and domestic gas) and supply of RLNG by importing LNG on short term basis;

* GREL, a member of the independent gas based Power Producers'' Association has filed a petition in Hon''ble High Court of Andhra Pradesh for the allocation of gas to the project;

* Keeping in view the current situation of the availability of gas, GREL expects that the project could start the commercial operations within few months from the date of supply of gas.

2. GMR Chhattisgarh Energy Limited (GCEL) - 1,370 MW:

* GCEL, wholly owned subsidiary of GEL, is engaged in setting up of 1,370 MW (2 x 685 MW) pulverized coal-fired super critical technology based power project in Raikheda Village, Tilda Block, Raipur District, in the State of Chhattisgarh. GCEL has received all the necessary statutory and environmental clearances. The project participated in bid and won two coal blocks, namely Talabira and Ganeshpur, in recently concluded e-auction;

* M/s. Doosan Projects India Private Limited is the main EPC contractor of GCEL for Boiler Turbine Generator (BTG) supply, onshore supply, civil works, erection, testing and commissioning. The Balance of Plant (BOP) contracts have been awarded to Gammon India Limited, Ion Exchange India Limited, L&T Limited and other contractors. The commissioning works of the project are in full swing and the overall progress of Boiler Turbine Generator contract has been 98.11% against the plan of 100%, the progress of engineering, procurement and construction being 100%, 100% and 98.52 % respectively;

* All major BOP packages have been completed and operational for commissioning of Unit-1;

* Ganeshpur coal block (located in Latehar, Jharkhand and was earlier allotted to Tata Steel Limited and Adhunik Thermal Energy) has a reserve of about 92 MT and is expected to start its production by FY18 and reach its peak production capacity by FY21;

* Talabira coal block (located in Odisha and was earlier allotted to HINDALCO) has a reserve of about 8.5 MT. This is an operating coal block and GCEL is expected to start production immediately in the financial year 2015-16.

3. GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL) - Badrinath - (300 MW):

* GBHPL, a subsidiary of GEL, is in the process of developing 300 MW hydroelectric power plant on Alaknanda river in the Chamoli District of Uttarakhand State. The project has received all major statutory clearances like Environmental and Techno economic concurrence from Central Electricity Authority (CEA). The project got registered in The United Nations Framework Convention on Climate Change (UNFCCC) and it is eligible for receiving the Clean Development Mechanism (CDM) benefits;

* Implementation Agreement has been executed with the Government of Uttarakhand on May 17, 2013. With regard to awarding of contracts, main civil packages were awarded and for Electro Mechanical & Hydro Mechanical Package tendering process was completed. Bids are under evaluation. Financial Closure (FC) process is in the advanced stage. Project has received term loan sanction from Power Finance Corporation Limited. Common loan agreement is under discussion. However, FC process was delayed due to Hon''ble Supreme Court''s order for stay on 24 Hydro Electric Projects in Uttarakhand (Order dated May 07, 2014) and the stay order is in effect till date.

4. GMR Bajoli Holi Hydropower Private Limited (GBHHPL) (180 MW):

* GBHHPL, wholly owned subsidiary of GEL, is implementing 180 MW hydro power plant on the river Ravi at Chamba District Himachal Pradesh. GBHHPL has achieved financial closure on April 25, 2013 and has tied up the debt requirement of Rs. 1380 Crore and the necessary loan agreements were executed. All clearances required for undertaking construction are in place and complete land as required for the project is in GBHHPL''s possession. Contract agreement for execution of main civil works in two packages stand awarded to Gammon India Limited and Electro-Mechanical contract has been awarded to Alstom India Ltd. Basic infrastructure works including approach roads to project components are completed and Civil works are going on at all work fronts (except at Surge Shaft). The Board of Directors are pleased to inform that GBHHPL has also executed the Connectivity Agreement with HP Power Transmission Corporation Limited and Long Term Access Agreement with Power Grid Corporation of India Limited (PGCIL) for evacuating power outside Himachal Pradesh. GBHHPL has appointed Geo Data Mahab, an internationally renowned Hydro Consultant as Owner''s Engineer; Land securitization was completed successfully.

5. Himtal Hydropower Company Private Limited (HHPPL) - (600 MW):

* HHPPL, subsidiary of GEL, is developing 600 MW Upper Marsyangdi-2 Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts of Nepal. During the year under review, post PDA execution of Upper Karnali Hydro Electric Project (UKHEP), Project Development Agreement (PDA) negotiations/ discussions has been started with Investment Board Nepal (IBN) for Upper Marsyangdi (UMS-2) and is on right track. The land for the entire project has been identified and the case has been submitted to GoN. Connectivity application was submitted to PGCIL in April 2015 through liaison office of Himtal (the Generating Company) in India. Initial discussions were initiated for tying up sale of power with Government of Bangladesh, Power Trading Company (PTC) / NTPC / Vidyut Vyapar Nigam Limited (NVVN). Cadastral mapping works are underway for transmission line. Joint Development Agreement (JDA) was executed with International Finance Corporation (IFC) for transmission line project on December 22, 2014 and JDA with IFC is already in place for Himtal (the Generation Company). IFC proposes to invest in the Project as Co-developer with 10% equity under ''Infra Ventures'' Route and also act as lead lender and lead arranger for the Project. It is exploring for Chinese financing and various discussions were held with Chinese Banks and EPC contractors in China.

6. GMR Upper Karnali Hydro Power Public Limited (GUKPL) - (900 MW):

* GUKPL, subsidiary of GEL, is developing 900 MW Upper Karnali Hydroelectric project located on river Karnali in Dailekh, Surkhet and Achham District of Nepal. During the year under review, PDA negotiations were completed and were executed on September 19, 2014 for generation and transmission line projects with Government of Nepal (GoN) represented by Investment Board of Nepal (IBN). Post execution of PDA, several key activities as per PDA compliance and basic infra works have been initiated. The Project land has been identified and joint verification for Government & Forest land, cadastral mapping etc. are under progress. Initial discussions were initiated for power sale tie up with Government of Bangladesh, Power Trading Company (PTC) / NTPC Vidyut Vyapar Nigam Limited (NVVN). Upper Karnali is in the process of rerouting the transmission line as per the directions of Ministry of Energy, Government of Nepal. Joint Development Agreement (JDA) was executed with IFC (part of World Bank Group) for both Generation and Transmission projects on December 22, 2014 and as per the JDA, IFC proposes to invest as Co- developer for the Projects with 10% equity under ''Infra Ventures'' Route and also assume the role of lead lender and debt arranger.

7. GMR Londa Hydropower Private Limited (GLHPPL) - 225 MW:

* GMR Energy Limited owns the 100% stake of GLHPPL which is developing a 225 MW project in East Kameng district in Arunachal Pradesh. The Detailed Project Report ("DPR") has been prepared and has received techno-economic concurrence from the Central Electricity Authority (CEA). Environmental Impact Assessment (EIA) / Social Impact Assessment (SIA) studies have been completed for the project and public hearing was successfully conducted at the project site in July, 2014. Post public hearing, EIA & Environment Management Plan (EMP) studies were finalized and were submitted with Ministry of Environment and Forest (MoEF) for grant of Environmental Clearance. Defence clearance for setting up the project has been received from Ministry of Defence, GoI.

C. Mining Assets:

1. PT Barasentosa Lestari, (PTBSL):

* Your Company had acquired 100% stake in PT Barasentosa Lestari (PTBSL) in September 2008 which is having coal mine in South Sumatra Province with more than 650 MT Coal Resources in ~24,385 Hectares and total mineable reserves of about 280 Million Metric Ton (MMT). Trial coal production and sales have commenced and the coal is being transported from mine by river barging. The coal production is expected to be gradually ramped up from 1 Million Ton Per Annum (MTPA) to 3 MTPA over a period. The coal is planned to be exported to India to cater to captive demand of power plants owned by the Group and also to trade the coal through in-house coal trading arm.

2. PT Golden Energy Mines Tbk (PT GEMS):

* Your Company through its overseas subsidiary GMR Coal Resources Pte. Ltd. had acquired 30% stake in PT GEMS, a group company of Sinar Mas Group, Indonesia. PT GEMS, a limited liability company, is listed on the Indonesia Stock Exchange. PT GEMS is carrying out mining operations in Indonesia through its subsidiaries which own coal mining concessions in South Kalimantan, Central Kalimantan and Sumatra. Coal mines owned by PT GEMS and its subsidiaries have total resources of more than 1.9 billion tons and Joint Ore Reserves Committee (JORC) certified reserves of 640 MT of thermal coal. GMR Group has a Coal off take Agreement with PT GEMS which entitles to off take coal for 25 years. This strategic alliance with Sinar Mas Group significantly enhances the fuel security of thermal power plants under construction and development by GMR Group and also provides a coal supply portfolio for coal trading activity.

3. Homeland Energy Group Limited (HEG):

* In the last financial year, HEG transferred its stake in Kendal and Eloff mines. With the disposal of all the mining assets, HEG was essentially a shell company with no major assets. In December 2014, GEL entered into share sale agreement for transfer of its entire stake in HEG.

Transportation:

Highways:

GMR Highways Limited, wholly owned subsidiary of the Company, is one of the leading highways developers in India with 9 operating highways assets (including two projects which we hold minority interest) totalling to 731.28 kms. The FY 2014-15 has seen a subdued growth in the highways sector due to various factors such as slowed economic situation, delay in clearances, sand quarry and mining bans, power shortage, funding constraints etc. This has resulted in lower investment from private players in infrastructure in general including roads and highways sector. During FY 2014-15, final completion of Hungund-Hospet Project was achieved and toll collection has begun on 3rd toll plaza of the project as well. For Kishangarh- Udaipur-Ahmedabad project which had been terminated in December 2012, a dispute notice to NHAI was served, invoking arbitration to settle the dispute. The Arbitration Tribunal has been constituted and the matter will be taken up in hearings scheduled during FY 2015-16.

Railways:

Pursuant to the strategic decision taken to pursue EPC opportunities outside GMR Group and consequent to the Group''s entry into Railway Projects last year, in FY 2014-15, the Group has won construction contract from Dedicated Freight Corridor Corporation of India Limited for design and construction of Civil, Structures and Track Works for Double Line Railway involving formation in Embankments / Cuttings, Ballast on formation, Track Works, Bridges, Structures, Buildings, Yards, Integration with Indian Railway existing Railway System and Testing & Commissioning on Design-Build-Lump-Sum Basis for Mughalsarai- New Karchana Station (including) (Package 201) and for New Karchana Station (excluding) -New Bhaupur Station (Excluding) (Package 202). The contract value for this work is Rs. 5,080 Crore.

Also a consortium led by your Company has won construction of Roadbed, bridges, supply of ballast, Track linking, Yard arrangements (excluding supply of rails & Line sleepers), construction of Booking offices, other service buildings, platforms, platform shelters, FOBs, Electrical (Railway Electrification and General Electrification), Signalling and Telecommunication works project for 77 Km (in 3 packages) in Secunderabad and Hyderabad Divisions of South Central Railway, Andhra Pradesh, India from Rail Vikas Nigam Limited (RVNL).

During the year, your Company also started construction works of doubling for 67 Km railway track between Jhansi and Bhimsen stations on Jhansi Division of North Central Railway in the State of Uttar Pradesh, India. The project was awarded by Rail Vikas Nigam Limited (RVNL) in February 2014.

Urban Infrastructure:

The Group is developing a 3,000 acre multi-product Special Investment Region (SIR) at Krishnagiri, near Hosur in Tamil Nadu and 10,000 acre Port- based multi-product SIR at Kakinada, Andhra Pradesh.

Krishnagiri SIR:

GMR Group, with an objective of building world class industrial infrastructure in India, is setting up a SIR at Hosur, Tamil Nadu just 45 km from Electronic City, Bengaluru. The location provides unique advantage of multi-modal connectivity with National and State Highways and a railway line running alongside. Krishnagiri SIR is planned to be developed as an integrated city spread across 3,000 acres in the influence area of proposed Chennai- Bengaluru Industrial Corridor. Krishnagiri SIR is being planned to house the following manufacturing clusters:

* Automotive & Ancillary;

* Defense and Aerospace;

* Precision Engineering;

* Machinetools;

* Electronics Product Manufacturing;

Designed to encompass a complete ecosystem, Krishnagiri SIR focuses on Manufacturing enclaves, Innovation Centers, Manufacturing Support Services Center, Multi Skill Development Centre and other social infrastructure like housing, convention center, commercial area and range of services that are essential for a large industrial city center of this scale. Krishnagiri SIR has following key offerings to its esteemed clientele:

* Shovel ready developed plot with road, drainage, water supply, water treatment plants (WTP), sewage treatment plants (STP) and other similar facilities shall be provided;

* Water - Potable water from both ground as well as from dam;

* Power - 230 KV level dedicated sub-station with a Solar power plant.

The entire infrastructure shall be developed & maintained by GMR Group underscoring its commitment to quality, service and time lines. The "integrated" design would endeavor to provide first world standard residential, social and commercial amenities making this zone a truly "self-contained".

Kakinada SIR:

GMR Group owns 51% in Kakinada SEZ Private Limited, which is developing Kakinada SIR in the State of Andhra Pradesh in proximity to the cities of Vishakapatnam and Kakinada. With an area span of over 10,000 acres, Kakinada SIR will be self-contained industrial park with ideally designed Core infrastructure, Industrial common infrastructure, Business facilitation infrastructure and Social infrastructure across varied dedicated areas such as Housing, Lifestyle and High end expat friendly zone. Kakinada SIR is designed for balancing the sensitivity to culture and heritage of the region and also for integration with the native eco-system.

Project Progress:

* Master Plan for Phase 1 development of around 916 acres has been completed;

* Internal roads and plots have been developed;

* A Chinese toy manufacturing company has already started its training centre and providing training for ~400 people and will employ over 1500 people by end of 2015 and over 3000 people in the next 3 to 4 years;

* Has signed an agreement with Tata Business Services (TBSS) for Rural BPO. Center has started the operations in February, 2015. TBSS has recruited 20 youth [16 from the Rehabilitation & Resettlement (R&R) colony and 4 from nearby villages] and started providing training for another batch of 25 people;

* Has completed DPR and other Technical Studies for Port, additional one season study for Port is underway for conducting Public Hearing.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statements is provided in the Annual Report.

Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2015, the Company had 125 subsidiary companies apart from 23 joint ventures and 3 associate companies. During the year under review, companies listed below have become or ceased to be Company''s subsidiaries, joint ventures or associate companies. The Policy for determining material subsidiaries as approved may be accessed on the Company''s website at the link:http://investor.gmrgroup.in/investors/GIL Policies.html. The complete list of subsidiary companies,joint ventures and associate companies as on March 31,2015 is provided in "Annexure A" to this Report.

East Godavari Power Distribution Company Private Limited, Suzone Properties Private Limited, GMR Utilities Private Limited, Lilliam Properties Private Limited, GMR Aerospace Engineering Company Private Limited, GMR Aero Technic Limited and Delhi Airport Parking Services Private Limited became subsidiaries during the financial year 2014-15.

Homeland Energy Corporation (HEC), Homeland Mining & Energy SA (Pty) Limited (South Africa), Homeland Coal Mining (Pty) Limited (South Africa), Corpclo 331 (Pty) Limited (South Africa) and Ferret Coal (Kendal) (Pty) Limited (South Africa) ceased to be subsidiaries during the financial year 2014-15.

GMR Megawide Cebu Airport Corporation (Philippines) became joint venture during the financial year 2014-15.

Nhalalala Mining (Pty) Limited (South Africa), Devyani Food Street Private Limited, Delhi Select Services Hospitality Private Limited and Delhi Cargo Service Center Private Limited ceased to be the joint ventures during the financial year 2014-15.

No Companies became or ceased to be an associate company during the financial year 2014-15.

Report on the performance and financial position of each of the subsidiaries, JVs and associate companies has been provided in Form AOC-1.

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 March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2.1 of the Notes to the Financial Statements have been selected and applied 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 March 31, 2015 and of the loss 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 to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively;

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

The Company continues to follow the Business Excellence Framework, based on the Malcolm Baldrige Model, for continuous improvement in all spheres of its activities. The company works towards continuous improvement in governance practices and processes, in compliance with the statutory requirements. Board governance upgrades are underway.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report. Also a detailed report on Corporate Governance practices followed by the Company, in terms of Clause 49 (X) of the Listing Agreement with the Stock Exchanges, is provided separately in this Annual Report.

Business Responsibility Report

As stipulated under Clause 55 of the Listing Agreement, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report.

Contracts and arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on related party transactions as approved by the Board may be accessed on the Company''s website at the link:http://investor.gmrgroup.in/investors/GIL- Policies.html. Your Directors draw attention of the members to Note 32 to the standalone financial statements which set out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company''s website at the link: http://investor.gmrgroup.in/investors/ GIL-Policies.html.

The Company has identified three focus areas during the year under review, towards the mandatory community service CSR activities, which are as under:

* Education

* Health, Hygiene & Sanitation

* Empowerment&Livelihoods

The Company would also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013. During the year, the Company has spent Rs. 2.92 Crore (more than 2% of the average net profits of the Company for the last three financial years) on CSR activities.

The Annual Report on CSR activities is annexed as "Annexure B" to this Report. Further, the activities undertaken by GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in detail in the Management Discussion and Analysis Report.

Risk Management

In the rapidly changing business environment, your Company is exposed to a number of risks that impact its businesses in varying measures. It is imperative to identify and address these risks and at the same time leverage opportunities for achieving Company''s objectives.

Your Company''s Enterprise Risk Management (ERM) framework is in line with the current best practices and effectively addresses the emerging challenges of its various businesses.

Significant developments during the year under review include:

* Risk assessment was carried out in detail at bid stage of various projects in Energy, Coal mines auctions and Transportation sector (Railway EPC projects) with emphasis on independent views on key business assumptions in order to promote informed decision-making;

* During the year, the focus was on decentralization, internal capability building and deployment of the frameworks through ERM teams in sectors and where needed, through outsourced partners;

* With successful pilot-implementation of the Project Risk Management (PRM) framework, the same is being replicated at all projects with an objective to enable effective control over project completion time and costs;

* A draft of the Risk Appetite Framework for the Group has been developed to establish thresholds for quantum of risks that are acceptable in Group''s businesses;

* A Physical Risk Benchmarking framework for Energy assets has been developed and is ready for deployment;

* Moving towards e-enablement of ERM processes through deployment of IT tools across the Group to capture, report and to escalate risks across the sectors and business units.

Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG). The ERM Team also presents to the Management and the Audit Committee of the Board, the risk assessment and minimization procedures adopted to assess the reliability of the risk management structure and efficiency of the process.

A detailed note on risks and concerns affecting the businesses of the Company is provided in Management Discussion and Analysis.

Risk Management Policy

During the year, the Board of Directors of the Company on the recommendation of the Audit Committee, has approved the Risk Management Policy.

ERM Philosophy

The ERM philosophy of the Group is built based on its vision and values. The Group upholds its vision "To be an institution in perpetuity that will build entrepreneurial organizations, making a difference to society through creation of value."

The Group has developed a dynamic growth strategy and is in the process of implementing robust institution building processes in pursuit of its vision. ERM aims at balancing the two by ensuring that key decisions with regard to strategy and institution building are commensurate with the Group''s risk appetite.

The GMR Group''s ERM philosophy is "To integrate the process for managing risk across GMR Group and throughout its business and life cycle to enable protection and enhancement of stakeholder value."

The Group has developed a dynamic growth strategy and is in the process of implementing robust institution building processes in pursuit of its vision. ERM aims at balancing the two by ensuring that key decisions with regard to strategy and institution building are commensurate with the Group''s risk appetite.

The Group endorses the following principles as adapted from ISO 31000:2009 (Risk Management - Principles and Guidelines):

* ERM Protects and enhances value

* ERM is an integral part of all organizational processes and is applicable across the Group

* ERM is an input to decision making

* ERM is systematic, structured and timely

* ERM is transparent, inclusive and consultative

* ERM is dynamic, iterative and responsive to changes

* ERM facilitates continual improvement

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to financial statements. These controls were tested and no reportable material weaknesses were observed in the operations of the Company.

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. K.V.V. Rao and Mr. B.V.N. Rao, Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company and are eligible for reappointment. Mr. B.V.N. Rao has expressed his desire to offer himself for reappointment and Mr. K.V.V. Rao has expressed his desire not to offer himself for reappointment.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in its Meeting held on September 18, 2014 had appointed Mrs. Vissa Siva Kameswari as an additional Director of the Company with effect from October 1, 2014, for a period up to the conclusion of the 20th Annual General Meeting of the Company. The Company has also received requisite notice in writing pursuant to Section 160 of the Companies Act, 2013 from a member along with requisite deposit proposing the candidature of Mrs. Vissa Siva Kameswari for appointment as an Independent Director of the Company at the ensuing Annual General Meeting of the Company.

The brief resume and details of Directors who are to be appointed/re- appointed are furnished in the Notice for the Annual General Meeting.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Annual evaluation of Board performance, Board Committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements under Clause 49 of the Listing Agreements has been carried out. The performance of the Board was evaluated based on the criteria like Board composition and structure, effectiveness of board processes, information and functioning etc. The performance of the committees was evaluated based on the criteria such as the composition of committees, effectiveness of committee meetings etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. The Company''s Nomination and Remuneration Policy for Directors, Key Managerial Personnel and senior management is annexed as "Annexure C" to the Board''s Report.

Auditors and Auditors'' Report Statutory Auditors

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.

Management''s response on the Statutory Auditors Qualification / Comments on the Company''s standalone financial statements

1. Qualification pertaining to the dispute in GMIAL -On June 18, 2014, the arbitration tribunal delivered its award declaring that the Concession agreement was not void ab initio and is valid and binding on the parties. Further, the tribunal declared that the Government of Maldives and MACL are jointly and severally liable to GMIAL for loss caused by repudiation of the contract. The quantum of the damages is yet to be decided. Based on this favorable arbitration order, internal assessment and a legal opinion obtained by GMIAL, the management of the Company is confident that GMIAL would be successful in getting the compensation under the concession agreement at least to the extent of the carrying value of the assets taken over by GoM / MACL and the subsequent expenditure incurred by GMIAL as at March 31, 2015. Further, management of the Company is confident that the GMIAL will not be required to bear any further cost towards claim from GADLIL or other service providers on account of termination of their contracts. Accordingly, no further adjustments have been considered necessary as at March 31, 2015.

2. Qualification pertaining to the investment in GKUAEL - As efforts for revival of the project did not succeed, GKUAEL has issued a notice of dispute to NHAI invoking arbitration provisions of the Concession Agreement. Both the parties have appointed their arbitrators and the arbitration process is pending commencement. GKUAEL has transferred the aforesaid project costs of Rs. 130.99 Crore to claims recoverable and has made a provision against the same in the financial statements.

Based on an internal assessment and a legal opinion obtained, management of the Company is confident that neither further costs need to be borne by GKUAEL nor GKUAEL will be required to pay damages to NHAI. Accordingly, no further adjustments have been considered necessary as at March 31, 2015.

3. Qualification pertaining to recognition on profit of sale of ISG and LGM during the year ending March 31, 2014 - Management based on its internal assessment and a legal opinion was of the view that all the "Conditions Precedent" were either fulfilled or waived or agreed to be not applicable as at March 31, 2014, except for the buyer to obtain approval from Bank Negara Malaysia (not a "Condition Precedent") which was obtained on April 3, 2014 and subsequently on receipt of the sale consideration, the shares were transferred to the buyer on April 30, 2014. In view of the same, the Company recognized the profit on sale of ISG and LGM in the year ended March 31, 2014. Further, since the sale was already concluded and consideration also received, any adjustment with respect to this qualification will not have any impact on the cumulative surplus in the profit and loss statement as of March 31, 2015.

4. Comment with respect to clause no. iv in the annexure to auditors'' report on matters specified in Companies (Auditor''s Report) Order, 2015, ("CARO") - The Company continuously reviews the internal control systems, identify weaknesses and strengthens the processes, wherever required. However, the Company has reviewed the findings and further strengthened the processes.

5. Comment with respect to clause no. ix in the annexure to auditors'' report on matters specified in CARO -The Company endeavors and ensures that dues to the financial institutions, banks and debenture holders are generally made on time.

6. Comment with respect to clause no. x in the annexure to auditors'' report on matters specified in CARO -Corporate guarantee support is provided by the Company to its subsidiaries and other group companies, based on requirements, in the normal conduct of the business. Commission is normally not charged on corporate guarantees issued by the Company.

Management''s response on the Statutory Auditors Qualification / Comments on the Company''s consolidated financial statements

7. Qualification pertaining to the capitalization of indirect expenditure and borrowing costs in GREL - GREL has approached the MCA seeking clarification / relaxation on applicability of MCA general circular 35/2014 dated August 27, 2014. Further, pursuant to receipt of instructions from SEBI through NSE on rectification of this qualification through restatement of accounts, the Hon''ble High Court of Delhi, while hearing the petition filed by the Group in this regard, directed SEBI not to insist on restatement of accounts till the next hearing date, which is scheduled for September 4, 2015. In view of the same, no adjustment has been made to this effect in the financial statements.

8. Qualification pertaining to GMIAL, GKUAEL, ISG and LGM, management response is provided in paras 1, 2 and 3 above respectively.

9. Comment with respect to clause no. iv in the annexure to auditors'' report on matters specified in Companies (Auditor''s Report) Order, 2015, ("CARO") - The Company continuously reviews the internal control systems, identify weaknesses and further strengthens the processes, wherever required.

10. Comment with respect to clause no. vii (a) and ix in the annexure to auditors'' report on matters specified in CARO -The Company endeavors and ensures that the statutory dues and dues to the financial institutions, banks and debenture holders are generally made on time by all the group companies.

11. Comment with respect to clause no. x(a) in the annexure to auditors'' report on matters specified in CARO on guarantee given by the Company -Corporate guarantee support is provided by the Company to its subsidiaries and other group companies, based on requirements, in the normal conduct of the business. Commission is normally not charged on corporate guarantees issued by the Company.

12. Comment with respect to clause no. x(b) in the annexure to auditors'' report on matters specified in CARO on pledge of KSPL assets -As part of the Group, KSPL has provided its assets as security for the loans taken by other group companies and the Company had also provided loan to KSPL to meet its requirement. This is in the course of normal conduct of business and the management of the Company will ensure that KSPL''s interests are protected.

13. Comments with respect to clause no. i, iii, viii and xii in the annexure to auditors'' report on matters specified in CARO on fixed assets, on loans granted to companies, on firms or other parties covered in the register maintained under section 189 of the Act, on accumulated cash losses and on fraud respectively - The Group has taken appropriate action.

Cost Auditors

Pursuant to Section 148 of the Companies Act,2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its EPC business is required to be audited, as the same is falling under the non-regulated sector.

The Board, on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants as cost auditors for conducting the audit of cost records of the Company for the financial year 2014-15 and 2015-16.

Accordingly, a Resolution seeking Member''s ratification, approval for the remuneration to M/s. Rao, Murthy & Associates, Cost Accountants is included in the Notice convening the Annual General Meeting.

Secretarial Auditor

The Board has appointed M/s. V. Sreedharan & Associates, Company Secretaries, a firm of Company Secretaries in Practice, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith as "Annexure D" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Disclosures:

CSR Committee

The CSR Committee comprises of Mr. R.S.S.L.N. Bhaskarudu as Chairman, Mr. B.V.N. Rao and Mr. O. B. Raju as members.

Audit Committee

The Audit Committee comprises of Mr. N. C. Sarabeswaran as Chairman, Mr. S. Rajagopal and Mr. R. S. S. L. N. Bhaskarudu as members.

All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has a vigil mechanism named Whistle Blower Policy, which provides a platform to disclose information, confidentially and without fear of reprisal or victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrong doing within the Company. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, ten Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, are given in the notes to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in ''''Annexure E".

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT. 9 is provided in "Annexure F".

Particulars of Employees and related disclosures

The information required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as "Annexure G".

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.None of the employees listed in the said Annexure is related to any Director of the Company.

Developments in Human Resources and Organization Development

The Company has robust process of human resources development which is described in detail in Management Discussion and Analysis section under the heading "Developments in Human Resources and Organization Development at GMR Group".

Changes in Share capital

Qualified Institutions Placement (QIP):

During the year under review, your Company successfully completed issue and allotment of 46,88,17,097 equity shares of Rs. 1 each at a price of Rs. 31.50 per equity share, including a premium of Rs. 30.50 per equity share, aggregating to Rs. 1,476.77 Crore to Qualified Institutional Buyers (QIBs) as per Chapter VIII of SEBI Regulations, through the Qualified Institutions Placement (QIP). The QIP opened for subscription to QIBs on July 02, 2014 and closed on July 08, 2014. The entire money amounting to Rs. 1,476.77 Crore was received and allotment of shares was made on July 10, 2014. Consequent to this allotment, the listed equity share capital has increased from Rs. 389.24 Crore to Rs. 436.13 Crore.

The total paid capital of the Company as on March 31, 2015 is Rs. 1,572.80 Crore comprising of Equity Share Capital of Rs. 436.13 Crore and CCPS Capital of Rs. 1,136.67 Crore.

Share Warrants:

During the year under review, your Company has issued 18,00,00,000 warrants convertible into 18,00,00,000 Equity Shares to GMR Infra Ventures LLP, promoter group entity at an issue price of Rs. 31.50 per equity share on August 26, 2014. These warrants are convertible into equity shares within 18 months from the date of their allotment. Your Company has received the proceeds from GMR Infra Ventures LLP on August 26, 2014 amounting to Rs.141.75 Crore, being 25% of the consideration amount for allotment of the said warrants, as per the requirement of Regulation 77 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Forfeiture of Shares:

In August 2014, the Board of Directors of the Company had approved forfeiture of 4,500 partly paid up equity shares of Rs. 1 each, with effect from August 14, 2014, in accordance with the provision of the Articles of Association. Your Company has issued a notice to each of the erstwhile shareholders of 4,500 partly paid up Equity Shares intimating about the forfeiture.

Rights Issue:

Your Company had issued 93,45,53,010 equity shares of face value of Rs. 1.00 each for cash at a price of Rs. 15.00 per equity share (including a premium of Rs. 14.00 per equity share) aggregating to Rs. 1,401.83 Crore on a rights basis to the eligible equity shareholders of your company in the ratio of 3 equity shares for every 14 fully paid-up equity shares held by the eligible equity shareholders on the record date, that is on March 12, 2015. The said equity shares were allotted to the equity shareholders of your company on April 18, 2015.

The total paid capital of the Company after the rights issue is Rs. 1,666.25 Crore comprising of Equity Share Capital of Rs. 529.58 Crore and CCPS Capital of Rs. 1,136.67 Crore.

Environmental Protection and Sustainability

Since inception, sustainability has remained at the core of our business strategy. Besides economic performance, safe operations, environment conservation and social well-being have always been at the core of our philosophy of sustainable business. In anticipation of upcoming regulations and requirements, the Company has invested substantially and allocated other resources to proactively adopt and implement manufacturing / business processes to increase its adherence to environmental standards and enhance its industry safety levels. At GMR Group, the challenges due to the Company''s operations related to EHS aspects of the business, employees and society are mapped and mitigated through a series of systematic and disciplined sets of policies and procedures.

The Company continues to abide by regulations concerning the environment by allocating substantial investments and resources on a continuous basis to adopt and implement pollution control measures. Our continual endeavor to go beyond compliance and conserve natural resources helps to march towards attaining excellence in environmental management and efficient & sustainable operations as well. As the Company operates in an increasingly resource-constrained world, being environmentally conscious and efficient are key to our operations. The Company remains committed to our Corporate Environment, Health, Safety and Quality (EHSQ) Policy to articulate, guide, and adopt an integrated approach towards implementing EHSQ objectives. These established systems certified by reputed certifying agencies have helped to monitor and manage our operations systematically, safely and in environmental friendly manner. When such practices become institutionalized, they protect environment and reduce costs.

The Company understands the global thrusts for minimizing the effect of developmental projects towards global warming. The Company has developed various projects voluntarily and some of the projects are under development stage, which ultimately reduces GHG emissions into the atmosphere and thus, minimizing the global warming effect. The Company has evolved as Sustainability leader by registering 7 CDM Projects with UNFCCC.

As a responsible corporate citizen, the Company is striving to meet the expectations of neighboring communities around our plants and other locations through GMR Varalakshmi Foundation. The foundation works closely with them and strives to impact the lives of millions of farmers, youth, women and children through numerous programs.

Energy Sector

Energy Sector has continuously ventured to promote cleaner fuel operations and renewable energy. The super critical technology power plant is under development at Chhattisgarh. The 25 MW capacities Solar Photo-Voltaic based power generation and 2.1 MW and 1.25 MW wind turbine generators in the state of Gujarat and Tamil Nadu respectively, with the total capacity of the wind turbine generator being 3.35 MW is fully operational which commitment towards sustainability in terms of clean and renewable energy resource.

GMR Energy sector has aligned its energy business with its comprehensive "EHS Framework", adopting best manufacturing practices, optimizing energy, natural resources & technology, best available practices, go beyond compliance, etc.

All the operating units have all necessary statutory clearances in place and are in compliance with environmental regulations. The Company has adopted state of the art systems and measures to control emissions and effluent in design stage itself. Hazardous wastes management and disposal has been in accordance with Central Pollution Control Board (CPCB) guidelines. Continuous Stack Emission Monitoring System (CEMS) and continuous Ambient Air Quality Monitoring Systems (CAAQMS) at power plants have been set for monitoring of vital pollution parameters on real time basis. Also, each of the operating units has dedicated Effluent treatment Plant to treat waste water from the units and utilize or discharge in accordance with Pollution Control Board Norms. All parameters like stack emissions, ambient air quality, water quality, noise level etc are maintained well within the stipulated norms. The monitoring reports are submitted periodically to statutory authorities. Internal audits and surveillance audits as per the requirements of ISO certifications are conducted and any observation or non-conformance is dealt with utmost importance. The system is managed by dedicated EHS team and steered frequently at Apex level for quick actions.

Various employee engagement campaigns are conducted at plant by celebrating world environment day, national safety week, national fire awareness week, national cleanliness day, road safety awareness week, energy conservation week, earth day, etc to create awareness and generate ideas for implementation. During mass plantation drive, employees, families, children and nearby villagers are involved. Dense green belt development is under progress.

Systems and processes as per Global Reporting Initiative (GRI-G4) are being implemented across all the power plants. Energy Sector has published its first ever Sustainability Report for FY 13-14 as per GRI-G4 guidelines and made available to all its relevant stakeholders.

EMCO Energy Limited (EEL) has been certified for the Integrated Management System by M/s BVCI. Approval of Wild Life Conservation plan has been obtained. Three CAAQMS stations and CEMS at stacks have been installed. "Sampoorna Swachhata" a journey of Swachhata campaigning was initiated and being implemented throughout the year. "EMCO Nirmal Jivan" - a series of Wellness Programs for Employee health wellbeing consisting of Yoga, Balanced Diet & Nutrition Counselling, Medical camp on Spirometry are initiated. Safety audits by Cross department teams, trainings on Electrical Safety, Defensive driving, Fire Safety, First Aid, Chemical Safety were conducted. Awareness campaign on Anti-Tobacco, Snakes bite, Swine Flue - Common respiratory problems and Nukkad Natak (Dramas) on Safety, Swachhata were conducted. Mock drills on scenarios such as Release of Hydrogen, Chlorine Leakage, Fire at Coal Conveyor, Fire at ESP were conducted. National Fire Service Day / Week, Earth Day, World Environment Day, Cleanliness Day, National Safety Day were observed. A sustainable farming based greenbelt development consisting of 10,000 Mango trees and 20000 non-Fruit bearing Saplings were planted.

GMR Kamalanga Energy Limited (GKEL) is fully compliant with all the statutory norms of operating parameters. Out of the total ash generation of 1003470 MT, ~ 34% of ash has been utilized for brick manufacturing, road making and land development. 83,728 number of tree saplings were planted covering an area of about 69 acres in FY 14-15. "Swachhata Abhiyaan" - a cleanliness campaign and "5 S" Housekeeping Drive are being implemented. Besides various EHS initiatives and campaigns, a series of Behaviour Based Safety (BBS) trainings were conducted to inculcate positive safety culture amongst workforce.

GMR Chhattisgarh Energy Limited (GCEL) has obtained the amendment for usage of domestic coal from MoEF and Factory License from Inspectorate of Factories. 44,112 number of tree saplings were planted in this financial year covering an area of about 115.5 acres. Following Surveillance Audit of Integrated Management System (IMS), GCEL received ISO 14001:EMS, OHSAS 18001 and ISO 9001:QMS certificates. Various campaigns viz., World Earth Day, World Environment Day, Road Safety Awareness Week, National Safety Day / Week were observed at GCEL.

GMR Power Corporation Limited (GPCL), Chennai planted 190 saplings covering an area of about 3 acres.

GMR Vemagiri Power Generation Limited (GVPGL) and GMR Rajahmundry Energy Limited (GREL) observed World Environment Day, Road Safety Awareness Week and National Safety Week. GVPGL sold its accumulated Certified Emission Reduction (CER) of about 3,15,320 to M/s British Petroleum Energy Asia Pte Ltd., Singapore and fetched a revenue of about Rs. 34.89 Lakhs. 3,000 saplings have been planted in GREL premises.

GMR Energy Limited (GEL), Kakinada has achieved 0 Lost Time Injury Frequency Rate (LTIFR) with nil reportable accidents in this financial year and is fully compliant with all statutory norms and procedures. GEL inaugurated Swachhata Abhiyan (cleanliness) campaign. GEL celebrated World Environmental Day, Safety Week, Road Safety Week, Fire Service Week. Recertification of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001: 2007 has been done by M/s GL-DNV. Plantations were done by employees in nearby schools.

GMR Bajoli Holi Power Project has achieved 21, 59,079 safe man hours in this financial year and in compliant with all applicable EHS rules and regulations. Following certification audit for Integrated management system (IMS), M/s TUV India- certifying agency granted ISO 9001:2008, ISO 14001:2004 and OHSAS 18001: 2007 certificates. 400 saplings were planted in the colony.

Airport Sector

Airport Sector embraces the concept of sustainability by managing activities in environment friendly manner, minimizing natural resource utilization and maintaining collaborative relationships with the community and stakeholders. Our strategy for long-term stability and continual improvement is focused on cost-effective operation, social responsibility, environment and ecology oriented business approach and practices, which are governed and managed by latest technological processes, improved infrastructure, efficient operational measures, continuous learning and education, effective change management and communication with all possible stakeholders'' support.

Environment Sustainable Management is an integral part of our business strategy which helps in achieving social credibility and business sustainability by efficient integration of policy, system, procedures, infrastructure and community support. The Company adopted all possible proactive sustainable approach for the airport to develop an environment friendly posture that accommodates the community''s concerns while still meeting all regulatory requirements. Our key environmental and social elements which have direct/indirect impact on society are aircraft noise, emission, air quality, water & wastewater, solid waste and conservation of natural resources. A dedicated team of professionals is deployed to deal with all areas of environmental and social concerns. All the impacts associated with its business aspect are being effectively resolved by working closely with the communities around the airport by proper knowledge sharing forum, media communications, communication to stakeholders and stakeholders meeting, further with the support of regulatory and government agencies.

Air and Water management is ensured by regular monitoring, analysis and following government regulations and guidance. Solid & Hazardous wastes are handled as per the applicable rules. Sewage treatment plant is operational to treat the waste water. Entire treated water is being reused appropriately for the flushing, irrigation purposes.

DIAL

Environment Sustainable Management is an integral part of your company''s business strategy. It focus highly on natural resource conservation, pollution preventions and skill developments on the part of business sustainability at Delhi Airport by efficient integration of policy, system, procedures, infrastructures and community supports.

DIAL is committed to conduct its business in an environment and social friendly manner by adopting all possible operational and technological measures to minimize the impact of its activities on the environment and society.

DIAL has adopted all possible proactive sustainable approach for the airport to develop an environment friendly posture that accommodates the community''s concerns, while still meeting all regulatory requirements.

Some of the recent achievements during this financial year are:

* Green Company Certification by Cll at Gold Level, becoming first airport in India to achieve this landmark, March, 2015;

* Greentech Environment Excellence Award 2014 - Platinum Level, January 2015;

* National Energy Excellent Award by Cll, October, 2014;

* Golden Peacock Award for Sustainable Environment Management at DIAL by Institute of Directors, July, 2014;

* Developed Standardized Training Package called Leadership in Energy and Environmental Design and operation of Airport Infrastructure along with Aviation Academy and got approved by ICAO, July, 2014;

* Founding Member of India GHG Program of Cll;

* Successfully completed ISO 14001 - Environment Management System recertification audit by M/s. DNV, certified organization and sustaining from 2008;

* Sustain "Optimisation Level" accreditation by Airport Council International (ACI) for Carbon Management implemented at IGI Airport from 2013;

* Regular Training on Environmental Management and Sustainability Management;

* Environment Day celebration & Tree plantation on every World Environment Day event on 5th June.

GHIAL

GMR Hyderabad International Airport Ltd. (GHIAL) is complying with the applicable environmental legal requirements of DGCA, APPCB and MoEF, as highlighted below:

* Upgradation of the existing "Online Continuous Environmental Monitoring Station" by addition of three new analysers (Carbon monoxide, Ozone and Hydrocarbons);

* The second "Noise Monitoring Terminal" has been installed and commissioned at AGL substation - East in order to comply with Aviation Environmental Circular No. 3 of 2013 i.e. Aviation Noise Management at Airports;

* An environmental portal has been developed to maintain a centralized environmental data base for the airport including stakeholders;

* GMR Hyderabad International Airport has received the Confederation of Indian Industries (CII) Award for "Excellent Energy Efficient Unit" during the 15th National Award for Excellence in Energy Management 2014;

* Rajiv Gandhi International Airport (RGIA) won a first prize in Private Institutions category for the Best Landscape for the Fifth time in a row, in the recently concluded Garden Festival 2015 organized by the Department of Horticulture, Government of Telangana. RGIA also won a First prize for the Best Rotaries and medians. The department of Horticulture organized this garden festival in the month of January 2015;

* Hyderabad''s RGIA Cargo has received the Middle East / Indian Subcontinent Airport of the year and Green award at the Payload Asia Awards, 2014;

* A noise mapping study has been done in line with DGCA guidelines to predict distribution of noise intensity around the airport;

* An Environment Week was organized from 2nd June to 7th June at the Airport. During the week, various environmental promotional activities were conducted:

* Distribution and display of World Environment Day campaign material such as banners, bookmarks etc;

* Promotion of WED''s theme ''Raise your voice, not the sea level'' to the airport community, passengers and visitors;

* Bi-cycling to promote zero pollution and good health;

* Plantation in the airport;

* Competitions among the airport community such as poster painting,quiz innovative solutions to the environmental issues and the best practices etc;

* Involvement of passengers with environmental promotional activities;

* Promotion of public transport, carpooling and fuel conservation;

* Awareness campaigns on food waste control;

* Promotion of water and energy conservation.

The airport''s carbon intensity has been reduced from 3.14 (year 2013) to 2.60 kg of CO2 per passenger for the calendar year 2014.

Further the other details w.r.t. Environmental Protection and Sustainability have been explained in the Management Discussion and Analysis Report.

Events subsequent to the date of financial statements

There are no material changes and commitments affecting financial position of the company between March 31, 2015 and Board''s Report dated August 21, 2015.

Change in the nature of business, if any

There is no change in the nature of business of the company.

Significant and Material Orders passed by the Regulators

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the company''s operations in future.

Fixed Deposits

During the year under review, the Company has not accepted any deposits from the public.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

The following is a summary of sexual harassment complaints received and disposed off during the financial year ending March 31, 2015:

Number of complaints received : NIL

Number of complaints disposed off : NIL

Acknowledgements

Your Directors thank the lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large for their valuable support and co-operation. Your Directors also thank the employees of the Company and its subsidiaries for their continued contribution, commitment and dedication.

For and on behalf of the Board

Place: Bengaluru G. M. Rao Date: August 21, 2015 Executive Chairman


Mar 31, 2014

Dear Members,

The Board of Directors present the 18th Annual Report together with the audited accounts of the Company for the year ended March 31, 2014.

Financial Results

The Company, as a holding company, operates in four different business sectors - Energy, Airports, Highways and Urban Infrastructure through various subsidiaries, associates and jointly controlled entities. The Company

has Engineering, Procurement and Construction (EPC) business as a separate operating division to cater to the requirements for implementing the projects undertaken by the subsidiaries and others.

The Company''s revenue, expenditure and results of operations are presented through consolidated financial statements and the details are given below:

(Rs. in Crore)

Particulars March 31, 2014 March 31, 2013

Revenue from operations 10,653.22 9,974.86

Revenue share paid / payable to concessionaire grantors (1,943.69) (1,669.48)

Operating and administrative expenditure (5,957.94) (5,697.34)

Other Income 315.87 277.19

Finance Costs (2,971.88) (2,099.00)

Utilisation fees (186.18) (130.87)

Depreciation and amortisation expenses (1,454.99) (1,039.78)

(Loss) / profit before exceptional items, tax expenses and minority interest (1,545.59) (384.42)

Exceptional Items:

Profit on dilution in subsidiaries 69.73 -

Profit on sale of jointly controlled entities / subsidiary 1,658.93 1,231.25

Profit on sale of assets held for sale 100.54 -

Loss on impairment of assets in subsidiaries (8.95) (251.37)

Assets write off in a subsidiary - (202.61)

Profit / (loss) before tax expenses and minority interest 274.66 392.85

Profit / (loss) from continuing operations before tax expenses and minority interest (1,408.28) (310.36) Tax expenses (including tax adjustments for prior years, deferred tax and MAT credit entitlement) of continuing operations (161.33) (241.62)

Profit / (loss) after tax expenses and before minority interest from continuing operations (1,569.61) (551.98)

Minority interest - share of (profit) / loss from continuing operations (117.66) (86.40)

Profit / (loss) after minority interest from continuing operations (A) (1,687.27) (638.38)

Profit / (loss) from discontinuing operations before tax expenses and minority interest 1,682.94 703.21

Tax expenses (including tax adjustments for prior years, deferred tax and MAT credit entitlement) of discontinuing operations (4.92) (15.82)

Profit / (loss) after tax expenses and before minority interest from discontinuing operations 1,678.02 687.39

Minority interest - share of (profit) / loss from discontinuing operations 19.26 39.11

Profit / (loss) after minority interest from discontinuing operations (B) 1,697.28 726.50

Profit / (loss) after minority interest from continuing and discontinuing operations (A B) 10.01 88.12

Net deficit in the statement of profit or loss - Balance as per last financial statements (756.33) (714.17)

Loss before appropriation (746.32) (626.05)

Appropriations (437.24) (130.28)

Net deficit in the statement of profit or loss (1,183.56) (756.33)

Earnings per equity share (Rs.) - Basic and diluted (per equity share of ? 1 each) 0.03 0.23

Earnings per equity share (Rs.) from continuing operations - Basic and diluted (per equity share of Rs. 1 each) (4.33) (1.64)

Earnings per equity share (Rs.) from discontinuing operations - Basic and diluted (per equity share of Rs. 1 each) 4.36 1.87

Consolidated revenue from operations grew by 6.80% from Rs. 9,974.86 Crore to Rs. 10,653.22 Crore. Airport, Energy, Highways, EPC and other segments contributed Rs. 5,996.12 Crore (56.28%), Rs. 3,342.61 Crore (31.38%), Rs. 737.88 Crore (6.93%), Rs. 239.75 Crore (2.25%) and Rs. 336.86 Crore (3.16%) respectively to the revenue from operations.

As part of your company''s strategy for long term value creation for its shareholder and portfolio churning, your company successfully divested its 40% stake in Sabiha Gokcen Airport in Istanbul, Turkey i.e. Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim Ve Isletme Sirketi (''ISG'') and the hotel entity at Turkey Airport, LGM Havalimani Isletmeleri Ticaret Ve Turizm Anonim Sirketi (''LGM''). This has resulted in a profit of Rs. 1,658.93 Crore (net of cost incurred towards sale of equity stakes), which is presented as an exceptional item in the financial statements. The group completed the divestment of 74% stake each held in GMR Jadcherla Expressways Limited and GMR Ulundurpet Expressways Private Limited and has recognized a profit of Rs. 69.73 Crore on dilution of stake in these subsidiaries. The group also completed the sale transaction for the coal mines of Homeland Energy Group Limited (HEGL) in Presented below are the standalone financial results of the Company:

South Africa after obtaining the requisite approvals and has recognized a profit on sale of assets held for sale of Rs. 100.54 Crore. This comprises of profit of Rs. 37.02 Crore recognized on sale of one of such mines and recognition of foreign exchange gain of Rs. 63.52 Crore (inclusive of Foreign Currency Translation Reserve) on account of disposal of equity stake in the coal mine entities. During the year ended March 31, 2013 the Group had made an Impairment provision of Rs. 251.37 Crore towards carrying value of net assets of HEGL.

Despite an extremely challenging year with constraints on fuel and financing amongst other concerns, your company has endeavored to focus on operationalization of its projects. Your company''s energy sector successfully commissioned all units of EMCO and Kamalanga (Phase I) power plants and achieved partial completion of Chennai Outer Ring Road. Reflecting on its strong airports strategy, your company along with its partner, Megawide, has won the Mactan Cebu International Airport (MCIA), a brownfield airport project in the Republic of Philippines. Your company has signed a 25 year concession agreement to renovate and expand the MCIA, the second largest Airport in Philippines and a tourist gateway to the country.

(Rs. in Crore)

Particulars March 31, 2014 March 31, 2013

Revenue from operations 786.29 1,432.79

Operating and administrative expenditure (525.39) (1072.01)

Other Income 4.77 28.58

Finance costs (408.71) (374.43)

Depreciation and amortization expenses (8.42) (8.31)

(Loss) / Profit before exceptional items and tax expenses (151.46) 6.62

Exceptional items:

Profit on sale of investment in subsidiary / jointly controlled entity 472.06 75.83

(Loss) on redeemable preference shares (131.25) -

Provision for diminution in the value of investment in a jointly controlled entity (1.27) -

Profit before tax 188.08 82.45

Tax expenses (including deferred tax and MAT credit entitlement) (22.18) (29.00)

Profit for the year 165.90 53.45

Surplus in the statement of profit and loss - Balance as per last financial statements 309.06 382.37

Transfer from debenture redemption reserve 108.75 -

Profit available for appropriation 583.71 435.82

Appropriations:

Transfer to debenture redemption reserve 108.50 81.53

Proposed equity dividend 38.92 38.92

Tax on proposed equity dividend 6.92 6.31

Proposed preference dividend [Rs.1,868] 0.00 -

Tax on proposed preference dividend [Rs. 318] 0.00 -

Net surplus in the statement of profit and loss

Earnings per share (Rs.)

- Basic and Diluted 0.43 0.14

The revenue from operations of the Company on standalone basis has reduced by 45.12% from Rs.1,432.79 Crore to Rs. 786.29 Crore on account of completion of majority of the projects handled by the EPC segment. The operating and administrative expenditure has also reduced accordingly by 51% from Rs. 1,072.01 Crore to Rs. 525.39 Crore. During the year, the company has divested its equity stake in Turkey Airport entity (ISG) and this has resulted in a profit of Rs. 458.78 Crore (net of cost incurred towards sale of equity stake), which is presented as an exceptional item in the financial statements. Loss on redeemable preference shares amounting to Rs. 131.25 Crore and provision for diminution in the value of investment in the Ground Handling jointly controlled entity at Turkey (Istanbul Sabiha Gokcen Uluslararasi Havalimani Yer Hizmetleri Anonim Sirketi) amounting to Rs. 1.27 Crore have been shown as an exceptional item in the financial statement.

Loss on redeemable preference shares amounting to Rs. 131.25 Crore was on account of the waiver of the premium paid by the Company on conversion of the 1% non-cumulative preference shares of GEL as part of the Amended and Restated Share Subscription agreement with the PE investors of GEL. This was done to maintain optimum fair value per share and enabled GEL and the Company to conclude the arrangement in favourable terms.

Dividend

The Board of Directors has recommended a dividend of Rs. 0.10 per equity share of Rs. 1 each (10%) for the financial year (FY) ended March 31, 2014 and a preference dividend aggregating Rs. 1,868 on pro rata basis (from March 26, 2014 to March 31, 2014) @ 0.001% per annum on 11,366,704 Compulsorily Convertible Preference Shares (CCPS) of face value of Rs. 1000/- each, subject to the approval of shareholders at the Annual General Meeting.

In view of the qualification of the audit report by the Company''s Auditors on recognition of profit of sale of ISG in the financial statements for the current year ended March 31, 2014, the Board of Directors had examined and satisfied themselves that the surplus available for appropriation, before considering the profit on sale of ISG is sufficient for payment of dividend recommended by the Board. Further, the audit report contains a Qualification on the significant doubt about the going concern of GMIAL and GADLIL. However, based on the recent favorable arbitration award, internal assessment and legal opinion, the Group is confident of getting a favorable award and expect no adverse impact on the financials.

Subsidiary Companies

As on March 31, 2014, the Company had 123 subsidiary companies apart from other jointly controlled entities and associates. Operation of businesses through subsidiaries is mainly due to requirement of concession agreements. The complete list of subsidiary companies as on March 31, 2014 is provided in Annexure ''A'' to this Report.

Review of Operations/Projects of Subsidiary Companies and EPC

The detailed review of business operations of each of the subsidiaries is presented in the respective Company''s Directors'' Report and a brief overview of the major developments thereof is presented below. Further, Management Discussion and Analysis, forming part of this Report, also brings out a brief review of the business operations of various subsidiaries and jointly controlled entities.

Airport Sector

Airports business consists of two operating airports in India at Delhi and Hyderabad, and signed a concession agreement for Cebu airport in April 2014.

An overview of these assets during the year is briefly given below:

Delhi International Airport Private Limited (DIAL)

DIAL is a joint venture (JV) between GMR Group (54%), Airports Authority of India (26%), Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private Limited (10%) and has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi.

Highlights of FY 2013-14:

Despite the economic recession worldwide, DIAL has registered a significant growth in passenger and Cargo traffic in FY 13-14 with 36.88 million passengers (with year-on-year growth of 7.3%) and 605,699 MT of cargo (with year-on-year growth of 10.9%).

Further, there were significant successes in implementing operationa efficiency and cost rationalization initiatives. Specifically, Business Excellence initiatives and TOC (Theory of Constraints) implementation contributed significantly towards the institutionalization of a ''process-based approach'' and achievement of Operational Excellence. An example was the Delhi Airport Collaborative Decision Making (DA-CDM) implementation which improved the operational efficiency significantly by achieving a high On Time Performance (OTP) (~88%) as well as peak hour Air Traffic Movements (ATM) of 78.

On the Operations front, Malindo Airlines and Tajik Air were new entrants in the airline segment while new sectors connected include Melbourne, Sydney, Birmingham and Bishek. Further, DIAL enjoyed excellent improvement in the quality of passenger service delivery and maintained ASQ Ranking of 2nd Best Airport in 25-40 million passengers per annum (mppa) category for 3rd year in a row. On the Aerocity front, operations commenced for 4 Hotels (JW Marriott, Lemon Tree, Red Fox and Holiday Inn).

Additionally, DIAL became the 1st Airport in India (and one of the few Airports in world) to commission a 2.14 MW Photo Voltaic (PV) solar power plant for captive use. This plant is expected to reduce the Airport energy consumption from State Electricity Grid by 3.2 million units per annum.

Awards and Accolades received in FY 2013-14:

- CNBC AWAAZ Travel Awards for Best Managed Airport (3rd year in a row);

- "Best Airport in India and Central Asia" in SKYTRAX - 2014 World Airport Awards;

- First Airport across the Globe to have successfully registered with United Nations Framework Convention on Climate Change (UNFCCC) as Clean Development Mechanism (CDM);

- First IATA e-freight compliant Airport in India;

- Globally recognized Airport Carbon Accredited ''Optimization'' Award for its accomplishments in effectively managing and reducing carbon emissions from Airport Council International (ACI);

- Airport Carbon Accredited ''Optimization'' Award by ACI;

- ISO 39001: 2012 Certification - Road Traffic Safety (RTS) Management System; 1st organization in India and 1st Airport in the world;

- International Safety Award 2013, British Standards Institution (BSI);

- Indian National Suggestion Schemes'' Association (INSSAN) Award for Employee Engagement;

- 12th Annual Greentech Safety Award 2013 in Gold Category in Aviation Services Sector.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a JV Company promoted by the GMR Group (63%) in partnership with AAI (13%), Government of Andhra Pradesh (now Government of

Telangana) (13%) and MAHB (Mauritius) Private Limited (11%). GHIAL has set up India''s first Greenfield Airport, Rajiv Gandhi International Airport (RGIA) at Shamshabad, Hyderabad.

RGIA recorded passenger traffic of 8.73 million in FY 2013-14, a growth of 4% over FY 2012-13. International traffic grew by 14% as compared to FY 2012-13, while the domestic traffic grew by 1%.

The growth in international traffic was largely due to capacity increase i.e. nclusion of new airlines and increase in frequency of existing routes.

Cargo handled in FY 2013-14 was 90,234 MT which registered a growth of 7% over FY 2012-13. The domestic cargo grew by 11% and international cargo grew by 5% as compared to FY 2012-13.

On domestic front, however the operations of Jet airways have come down, while Indigo and Spicejet added their capacities and routes and Air Costa started its operations from Hyderabad.

As per the AERA Aeronautical tariff order No. 38 issued on February 24, 2014, in respect of the control period from April 1, 2011 to March 31, 2016, there will be no Passenger Service Fee (Facilitation component) for embarking passengers and the same will be considered as part of User Development Fee (UDF). Further, UDF for the period from April 1, 2014 to March 31, 2016 has been determined to be Rs. Nil. This will have significant mpact on the profitability and cash flows during the mentioned period. GHIAL has initiated legal recourse challenging the aforesaid AERA order and had also initiated certain steps towards strategic cash management. Further, with the expected UDF commencing in the next tariff cycle, the financial position is expected to improve thereafter.

The Company continued its two-pronged strategy, for overall improvement in its business. The first focused on airlines that are the primary customers called "Route Development Strategy" and the second one being "Passenger Development Strategy". The primary objective of these strategies are to make Hyderabad Airport as South and Central India''s gateway thereby enabling airlines to have financially sustainable operations from Hyderabad. As part of this strategy, the launch of Spicejet - Tiger Airways interline was facilitated.

Also, the Company launched its cargo Air Freight Station (AFS) at Nagpur to augment its cargo throughput from the catchment area.

The following awards and recognitions were received during the year:

- World No. 2 position in the ACI ASQ (Airport Service Quality) Survey for the year 2013 in the 5-15 MPPA category;

- ASSOCHAM-CSR Excellence Award 2012-13;

- FICCI-CSR Award 2012-13;

- Prestigious "NATIONAL TOURISM AWARD 2012-13" under the Best Airport Category for fourth consecutive year;

- CAPA Airport Marketing Award (for Airports handling up to 15 mppa) at the 10th Annual CAPA Aviation Awards for Excellence;

1st Airport in the World to receive 5-Star Certification Award of the British Safety Council''s Health and Safety Management System. GHIAL has been awarded the prestigious ''Sword of Honour'', considered the ''Oscar of the Safety World'' by the British Safety Council for its Safety

Management System and Safety Practices;

1st Airport in India Level 3 (Optimization) Accreditation by ACI on Airport Carbon Emission.

Aerotropolis Development

Hyderabad and Delhi Airports and surrounding land are being developed as an airport city or "Aerotropolis", with a mix of aeronautical and non- aeronautical developments. As adjoining commercial areas to the Airports, they are bound to encourage the business activity and have a positive mpact on the economy. DIAL is developing Aerocity in the locality of the Delhi Airport which may ultimately cover 250 acres of land. Four hotels have commenced operations during the year.

GHIAL is developing India''s largest Airport City in the vicinity of Hyderabad Airport with an objective of creating an ecosystem that will generate benefits for the Airport as well as the regional economy and facilitate in establishing the prominence of Hyderabad Airport in the global arena. Master Plan for the entire Airport City has been completed and the physical infrastructure activities have started. The initial phase assets consisting of Aerospace SEZ, Retail, Business School, Exhibition Centre etc. are in various stages of design and development. During the year, lease agreement with new third party tenants in the Aerospace Park - Turbo Jet Engines, SAS Applied Research and Lab Materials and United Technologies Corporation India have been singed. Apart from above, a store has been opened in the Airport City by World''s leading sports retailer Decathlon during the year.

Aircraft - Maintenance, Repair and Overhaul (MRO)

The MRO facility is a part of Aero-SEZ of GMR Hyderabad Internationa Airport. Titled MAS-GMR Aerospace Engineering (MGAE), it is a 50:50 joint venture of GHIAL and Malaysian Aerospace Engineering Sdn Bhd. The facility is being operated by MAS-GMR Aero Technic Limited (MGAT) which is a wholly owned subsidiary of MGAE.

MGAT has ultra-modern facilities for aircraft maintenance, painting, avionics upgrades, interior refurbishments, aircraft modifications, structural repairs and Line Maintenance. It can cater to various types of narrow-body aircraft belonging to Airbus, Boeing, ATR and Bombardier families.

During the year under review, the facility has provided Heavy Maintenance services to 37 aircraft which includes C-checks on B737-800, B737-900, A320, A321, ATR and Q400 aircraft for both Domestic and Internationa customers. Additionally, Company has carried out Engine Changes and Landing gear changes on various aircraft. Apart from Heavy maintenance checks, your Company has performed seat retrofit on 34 A-320 aircraft.

During the Financial Year 2013-14 your Company is in advanced stage of negotiation for closing Heavy Maintenance contracts with major Domestic Airlines. Company has also opened Line Maintenance office at the Airport for providing Line Maintenance support to Major International carriers at Hyderabad. Further marketing efforts are being intensified to secure more Heavy Checks and Line Maintenance works at Hyderabad and at other Line Stations. The Company is also engaged in intensive marketing to penetrate nto the neighboring countries market for providing Heavy Maintenance checks to the Airlines belonging to these countries.

Additionally, the facility has secured and delivered 2 Repossession checks of A321 aircraft to an International Lessor and received positive feedback for providing quality service. In addition, the company has secured the contract to perform two B737-800 aircraft ''End of Lease'' checks from Domestic airlines. This forms a strong case and helps in securing more ''End of Lease'' checks from both Domestic and International carriers.

Istanbul Sabiha Gokcen International Airport Limited (ISG)

ISG is a Joint Venture (JV) Consortium which operates, manages and develops the Sabiha Gökçen Airport, which is the 2nd airport at Istanbul. The JV Consortium consists of GMR Infrastructure Limited (GMR Group – 40%), Limak Holding (40%) and Malaysia Airports Holdings Berhad (20%). The terminal developed by the consortium has a capacity to handle up-to 25 million passenger per annum and has the rights to operate the terminal buildings, multi-storey car park, cargo, aircraft refueling operations, airport hotel and Commercial Important Person (CIP) facilities in the airport.

ISGI recorded 18.9 million total passengers in calendar year 2013, which corresponds to a 27% annual increase in total passenger traffic.

As part of the Asset Light – Asset Right (ALAR) strategy, the GMR Group divested its 40% stake in ISG and the hotel entity at Turkey Airport, LGM under the terms of the definitive agreements signed, subsequent to the exercise of Right of First Refusal by Malaysia Airports Holdings Berhard (MAHB) under the existing shareholders agreement of ISG, on December 23, 2013.

The Group received Rs. 1,740 Crore (Euro 209.00 Million) as culmination of divestment of its 40% equity stake to MAHB in addition to reducing the proportionate debt of Rs. 1,412 Crore (Euro 169.55 Million) carried in the balance sheet.

GMR Male International Airport Private Limited (GMIAL)

Shortly after the Government of Maldives repudiated the concession agreement for Maldives'' Ibrahim Nasir International Airport, GMR Group (GMR) and Government of Maldives (GoM) commenced arbitration proceedings.

In order to expedite the progress of the arbitration, both GMR and GoM have agreed to bifurcate the arbitration in 2 phases – first phase will focus on questions of liability and what forms of damages/compensation are recoverable by GMR while the second phase will be to quantify the amount so recoverable.

The hearings of phase I were concluded in April 2014 and the outcome of the same was announced in June 2014 in GMR''s favour. The Tribunal summarily rejected all the arguments made by the GoM and declared its ruling that the unilateral termination of the concession agreement by GoM was illegal and repudiatory.

Broadly, the Tribunal declared that the concession agreement was valid and binding and was not void for any mistake of law or discharged by frustration of bargain or administration, the GoM and Maldives Airport Company Limited are jointly and severally liable for damages to GMIAL for loss caused by wrongful repudiation of the agreement and that the quantification of the damages and the interest thereon will be determined in the next stage of arbitration by the same tribunal.

GMR Aviation Private Limited

GMR Aviation Private Limited operates and owns one of the youngest fleets in the country and addresses the growing need for charter services in the country. The operations are managed by professionals with robust processes and systems to ensure highest levels of efficiency and safety. As a part of Business Plan, the company sold one aircraft and one helicopter during the FY. The company also sold Falcon 2000S delivered by Dassault Aviation, France during the year. At the end of FY, the company has one Falcon aircraft, one Hawker aircraft and one helicopter in its fleet.

CEBU

During April, 2014, the Group as part of the GMR Megawide Consortium signed the concession agreement with Department of Transportation and Communications, Republic of Philippines and Mactan Cebu International Airport Authority ("MCIAA") to plan, develop, construct, renovate, operate, maintain and expand Mactan Cebu International Airport for a period of 25 years. Before signing of the concession agreement, a petition has been filed before the Supreme Court of the Republic of Philippines, Manila seeking direction restraining MCIAA from issuing an award or executing the concession agreement with the GMR Megawide Consortium in relation to the Project. The Group has not yet received any notice from the aforesaid Supreme Court of the Republic of Philippines, Manila in this matter.

Energy Sector

The Energy Sector is operating around 2,501 MW of Coal, Gas, Liquid fuel and Renewable power plants in India through Special Purpose Vehicles (SPVs) and around 6,013 MW of power projects under various stages of construction and development besides a pipeline of other projects. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements.

The current operating portfolio of energy sector comprises of:

Name of SPV Capacity Fuel

GMR Power Corporation Limited (GPCL) 200 MW LSHS

GMR Vemagiri Power Generation Limited (GVPGL) 388 MW Natural Gas GMR Energy Limited (GEL) 220 MW Natural Gas

EMCO Energy Limited (EMCO) 600 MW Coal

GMR Kamalanga Energy Limited (GKEL)- Phase 1050 MW Coal

GMR Gujarat Solar Power Private Limited 25 MW Solar

GMR Renewable Energy Limited 2.1 MW Wind

GMR Power Infra Limited 1.25 MW Wind

The following are the major highlights of the Energy sector:

- Operational Highlights:

- TNEB PPA for 200 MW Diesel Power Plant at Chennai was extended for another year till February 2015, which remains subject to approval from the Tamil Nadu Electricity Regulatory Commission. Power supply under the extended PPA has already commenced;

- Unit 2 (300 MW) at EMCO was commissioned in September 2013. Both the units are now fully operational. EMCO also signed long term PPA with TANGEDCO this year for 150 MW. 100% of the plant capacity is now tied up via long term PPAs;

- 3x350 MW at GKEL has been fully commissioned. GKEL has a long term PPA tie-up of upto 85 % of its generation capacity;

- Golden Energy Mines (GEMS) (GMR stake of 30%) is operational and our coal trading team has been trading coal from GEMS to EMCO, GKEL and a third party successfully.

Amongst the energy subsidiary companies, GMR Power Corporation Limited, GMR Gujarat Solar Power Private Limited and GMR Renewable Energy Limited made a profit of Rs. 93.84 Crore, Rs. 3.82 Crore and Rs. 0.09 Crore respectively. GMR Energy Limited, GMR Vemagiri Power Generation Limited, GMR Kamalanga Energy Limited, EMCO Energy Limited and GMR Energy Trading Limited made a loss ofRs. 304.13 Crore, Rs. 58.86 Crore, Rs. 474.72 Crore, Rs. 532.57 Crore and Rs. 6.85 Crore respectively.

- Project-related Highlights:

- 89% of progress has been achieved in GMR Chhattisgarh Energy Limited (GCEL) and commercial operation date (COD) of first unit is expected this year.The 400 kv transmission line for evacuation to central grid has been completed and charged;

- The 270 km long Maru Transmission project was commissioned in October, 2013. The 96 km long Aravali Transmission project is nearing its completion stage and is awaiting commencement of commercial operations;

- 180 MW Bajoli Holi Hydro project achieved financial closure in April, 2013;

- Power Finance Corporation Limited has sanctioned debt for GMR''s 300 MW Badrinath Hydro Power Project in Uttaranchal. The financial closure is expected to be completed shortly. Project mplementation agreement has been signed with Government of Uttarakhand in May, 2013; The Honorable Supreme Court of India, while hearing a civil appeal in the matters of Alaknanda Hydro Power Company Limited, directed vide its order dated May 7, 2014 that no further construction work shall be undertaken by the 24 projects coming up on the Alaknanda and Bhagirathi basins until further orders. The Company is confident of obtaining requisite clearances;

- GMR Energy Limited signed a Joint Development Agreement with the nternational Finance Corporation, to jointly develop the 600 MW Himtal project on Upper Marsyangdi River in Nepal in December 2013;

- Techno-Economic Clearance for 225 MW Talong project (Arunacha Pradesh) has been obtained from Central Electricity Authority (CEA) / Central Water Commission (CWC).

Highways

GMR Highways Limited is one of the leading highways developers in India with 7 operating highways assets totaling to 2977 lane Kms.

The FY 2013-14 has seen a subdued growth in the highway sector due to various factors such as slowed economic situation, delay in clearances, sand quarry and mining bans, power shortage, funding constraints, etc. This has resulted in lower investment from private players in infrastructure in general including roads and highways sector.

Highways sector operating subsidiary companies, GMR Tambaram Tindivanam Expressways Limited, GMR Tuni Anakapalli Expressways Limited, and GMR Pochanpalli Expressways Limited, made a profit of Rs. 15.52 Crore, Rs. 7.94 Crore, and Rs. 14.00 Crore respectively. GMR Ambala Chandigarh Expressways Private Limited, GMR Hyderabad Vijayawada Expressways Private Limited, GMR OSE Hungund Hospet Highways Private Limited and GMR Chennai Outer Ring Road Private Limited made a loss of Rs. 29.69 Crore, Rs. 93.58 Crore, Rs. 24.51 Crore, and Rs. 17.12 Crore respectively.

During FY 2013-14, partial completion certificate for Chennai Outer Ring Road Project was obtained. The project is expected to ease the congestion of Chennai city substantially. The arbitration over Ghaggar Bridge in Ambala– Chandigarh project was successfully concluded during FY 2013-14. Arbitration process for loss of traffic under State Support Agreement and Concession Agreement is in advanced stages. Works for the third toll plaza in Hungund-Hospet Project were completed during FY 2013-14 and commercial operations commenced during May 2014.

The Company issued notice of termination under the Concession Agreement with NHAI on Kishangarh–Udaipur–Ahmedabad project in December 2012. Subsequently,the Company has approached the Hon''ble High Court of Delhi seeking an injunction against invocation of Performance Bank Guarantee of Rs. 269.36 Crore provided by the Company to NHAI. Presently, the Bank Guarantee has been kept alive by the Concessionaire and a revised proposal has been submitted to NHAI.

During the current year, the Group divested 74% of its stake in GMR Ulundurpet Expressways Private Limited. and completed its 74% stake sale in GMR Jadcherla Expressways Limited.

Engineering Procurement and Construction (EPC) Division

As part of the EPC business, Consortiums led by your company, have won construction package of rail line doubling between Jhansi and Bhimsen stations in the State of Uttar Pradesh, three construction packages of rail line doubling of Multi Modal Transport System (MMTS) – Phase II works on Secunderabad Division of South Central Railway in the State of Andhra Pradesh (presently State of Telangana). There is a huge potential to upgrade the Railway Infrastructure in the Country.

Urban Infrastructure

The Group is developing a 4300 acre multi product Special Investment Region (SIR) at Krishnagiri, near Hosur in Tamilnadu and 10,000 acre Port- based multi-product Special Investment Region at Kakinada, Andhra Pradesh.

Krishnagiri Special Investment Region

GMR Krishnagiri Special Investment Region (GKSIR) at Hosur, Krishnagiri district, Tamil Nadu is an upcoming project of the GMR Group.

The project site falls within the proposed Chennai – Bangalore Industrial Corridor and is located in proximity to Bangalore and Chennai.

GKSIR will be a smart integrated industrial zone and this project would cater to the needs of Manufacturing, Services and Commercial activities and will also offer Residential and Social Infrastructure.

GKSIR will have dedicated:

- Electronic Manufacturing Zone (EMC)

- Automotive and Auto Ancillary Zone

- Precision Engineering Zone

- Aerospace and Defence Zone

GKSIR project offers infrastructure, including built up spaces for factories, social infrastructure, quality and reliable power supply, treated water supply with digital infrastructure.

Project progress

- GKSIR has obtained in-principle approval for establishing EMC from Department of Electronics and Information Technology (DeitY). A Detailed Project Report has been prepared and submitted to Government of India and is awaiting for final approval for establishment of greenfield EMC;

- Detailed Design and Engineering of the horizontal infrastructure is in progress;

- Conceptual Master Plan for the GKSIR project has been completed and Urban Design detailing for the units are in progress;

- GKSIR has obtained various approvals including extracting ground water, establishing 33KV sub station, Consent for Establishment, NOCs from Forest department, Health department, Taluk office and PWD.

Kakinada Special Investment Region

Master plan for the Phase-1 development area i.e. ~916 acres of land has been completed and application for Consent for Operation (CFO) is in various stages of approval.

The Company has also commenced construction of Rural BPO building and operations are expected to start in the second quarter of current financia year. Your company had already signed a Memorandum of Understanding (MoU) with Rural Shores for setting up of BPO and two ''Letters of Intent'' with fisheries processing firms for setting up of Marine Park. The Phase 1 development is expected to start operations in current financial year and expected to generate an employment to 3000 people in the region.

On the Port front, Detailed Project Report has been rolled out and the Company is in discussion with established port players in the world for a possible investment in the business.

Risk Management

The Company is exposed to a number of risks that impact its businesses in varying measures. It is imperative to identify and address these risks and at the same time leverage opportunities for achieving the set objectives.

The Company''s risk management framework is in line with the current best practices and effectively addresses the emerging challenges in a dynamic business environment.

Significant developments during the year include:

- Detailed risk assessment was carried out during the bidding stage of various projects in Airports, Urban Infra and Highways sector with ndependent views on critical business assumptions to facilitate nformed decision making;

- A cross functional team was formed to work on the high value, high risk contracts in each sector to identify and address contract related risks and compliance areas in an appropriate manner in line with the Contractual Risk Review Framework;

- A separate bid risk framework was developed for the EPC division keeping in mind its nature of business being distinct from other businesses of GMR Group;

- Annual Operating Plan (AOP) risk analysis was carried out as a pilot in one of our Business Units, which will now be carried out on a regular basis across the businesses;

- Revised Project Risk Management (PRM) Framework is being implemented in the current projects of the Group;

- Detailed risk analysis for power trading business of the Group is conducted;

- Risk Appetite Framework for the Group is being developed for approval of the Management and the Board;

- Risk Management process is critically woven on the strategic planning process with various risks identified to the strategic objectives of all the businesses and initiatives defined to address them;

- Risk review of important policies impacting the Group such as foreign exchange, treasury, insurance, etc. is taken up on regular basis.

The Enterprise Risk Management (ERM) team presents to the Management and the Audit Committee of the Board of the Company the risk assessment and minimization procedures adopted to assess the reliability of the risk management structure and efficiency of the process.

A detailed note on risks and concerns affecting the businesses of the Company is provided in Management Discussion and Analysis.

Developments in Human Resources and Organisation Development

The Company has robust process of human resources development which is described in detail in Management Discussion and Analysis section under the heading "Developments in Human Resources and Organisation Development at GMR Group".

Consolidated Financial Statements

The Ministry of Corporate Affairs (MCA) vide its General Circular number 08/2014 dated 04.04.2014 has clarified that Financial Statements, Auditors'' Report and Board''s Report in respect of Financial Year that commenced earlier than April 01, 2014 shall be governed by the relevant provisions / Schedules / Rules of the Companies Act, 1956 only. In view of the above clarification from the MCA, the Board''s Report in respect of the Financia Year ended March 31, 2014 of the Company has been prepared in accordance with the provisions of the Companies Act, 1956.

Further, as per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet, statement of Profit and Loss and other documents of its subsidiary companies to its Annual Report. However, the Ministry of Corporate Affairs (MCA), Government of India vide its General Circular No.2/2011 dated February 8, 2011 has provided an exemption to the companies from complying with section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2013-14 does not contain the reports and other statements of the subsidiary companies. The annual audited accounts and related detailed information of the subsidiary companies will be made available to the investors of the Company upon request. These documents will also be available for inspection during business hours at the registered office of the Company.

The statement pursuant to the aforesaid circular of the MCA about financial information of each subsidiary containing details of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend is provided as Annexure ''B'' to this report. However, the financial statements of GMR Corporate Center Limited (GCCL) are not consolidated, since GCCL is a guarantee company having no share capital and commercial operations.

As required by the Listing Agreement with the Stock Exchanges, the audited consolidated financial statements of the Company and its subsidiaries, jointly controlled entities and associates form part of the Annual Report.

Changes in Share capital

During the year under review, the Authorized Share Capital of the Company has increased from Rs. 750,00,00,000 divided into 750,00,00,000 (Seven Hundred Fifty Crore only) equity shares of Rs. 1/- (Rupee One only) each to Rs. 1,950,00,00,000 divided into 750,00,00,000 (Seven Hundred Fifty Crore only) equity shares of Rs. 1/- (Rupee One only) each, 60,00,000 (Sixty Lakhs only) Series A Compulsorily Convertible Preference Shares (CCPS) of Rs. 1000/- (Rupees One Thousand only) each, and 60,00,000 (Sixty Lakhs only) Series B CCPS of Rs. 1000/- (Rupees One Thousand only) each.

Your Company has issued and allotted on March 26, 2014, 1,13,66,704 CCPS of face value of Rs. 1,000 each comprising of (a) 56,83,351 Series A CCPS each fully paid up, carrying a coupon rate of 0.001% per annum and having a term of 17 months from the date of allotment, and (b) 56,83,353 Series B CCPS each fully paid up, carrying a coupon rate of 0.001% p.a. and having a term of 18 months from the date of allotment, to IDFC Limited, Dunearn Investments (Mauritius) Pte Limited, GKFF Ventures, Premier Edu-Infra Solutions Private Limited and Skyron Eco-Ventures Private Limited. The Series A CCPS and Series B CCPS shall be converted into Equity Shares upon the expiry of their respective terms in accordance with the provisions of Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI Regulations).

Qualified Institutions Placement (QIP):

Subsequent to the year end, your company successfully completed issue and allotment of 46,88,17,097 equity shares of Rs. 1 each at a price of Rs. 31.50 per equity share, including a premium of Rs. 30.50 per equity share, aggregating to Rs. 1,476.77 Crore to Qualified Institutional Buyers (QIBs) as per Chapter VIII of SEBI Regulations, through the Qualified Institutions Placement (QIP). Issue price is at a discount of Rs. 1.64 per equity share to the floor price of Rs. 33.14 per equity share. The QIP opened for subscription to QIBs on July 02, 2014 and closed on July 08, 2014. The entire money amounting to Rs. 1,476.77 Crore was received and allotment of shares was made on July 10, 2014. Consequent to this allotment, the listed equity share capital has increased from Rs. 389.24 Crore to Rs. 436.12 Crore.

The total paid up capital of the Company after the aforesaid issue is Rs. 1,572.79 Crore comprising of Equity Share Capital of Rs. 436.12 Crore and CCPS Capital of Rs. 1,136.67 Crore.

Directors

Nomination and Remuneration Committee of the Board of Directors of the Company recommended the proposal to appoint Mr. S. Sandilya, Mr. R.S.S.L.N. Bhaskarudu, Dr. Prakash G Apte, Mr .N. C. Sarabeswaran, Mr. S. Rajagopal, Mr. V. Santhana Raman and Mr. C. R. Muralidharan as Independent Directors of the Company for a period of two years.

Mr. O. Bangaru Raju and Mr. Srinivas Bommidala, Directors retire by rotation and being eligible, offer themselves for re-appointment at the Annual General Meeting. The Nomination and Remuneration Committee of the Board of Directors of the Company recommended their re-appointment.

The Company has received requisite notices in writing pursuant to Section 160 of the Companies Act, 2013 from a member along with requisite deposits proposing the candidatures of Mr. S. Sandilya, Mr. R.S.S.L.N. Bhaskarudu, Dr. Prakash G Apte, Mr .N. C. Sarabeswaran, Mr. S. Rajagopal, Mr. V. Santhana Raman and Mr. C. R. Muralidharan for appointment as Independent Directors of the Company at the ensuing Annual General Meeting ofthe Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The brief resume and details of Directors who are to be appointed/re- appointed are furnished in the Notice for the Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

1. that in the preparation of the annual accounts for the year ended March 31, 2014, the applicable Accounting Standards have been followed and proper explanations were provided for material departures, if any;

2. that the Directors have 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 as at the end of the financial year and of the profit of the Company for that period;

3. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the Directors have prepared the accounts for the financial year ended March 31, 2014, on a going concern basis.

Corporate Governance

The Company continues to follow the Business Excellence Framework, based on the Malcolm Baldrige Model, for continuous improvement in all spheres of its activities. The company works towards continuous improvement in governance practices and processes, in compliance with the statutory requirements. Board governance upgrades are underway.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report. Also a detailed report on Corporate Governance practices followed by the Company, in terms of Clause 49 (VI) of the Listing Agreement with Stock Exchanges, is provided separately in this Annual Report.

Secretarial Audit

As per SEBI requirement, Reconciliation of Share Capital Audit is being carried out at specific periodicity by a Practicing Company Secretary. The findings of the audit have been satisfactory. In addition, Secretarial Audit was carried out voluntarily for ensuring transparent, ethical and responsible governance processes and also proper compliance mechanisms in the Company. M/s. V. Sreedharan & Associates, Company Secretaries, conducted Secretarial Audit of the Company and a Secretarial Audit Report for the financial year ended March 31, 2014, is provided in this Annual Report.

Management Discussion and Analysis (MDA)

The MDA, forming part of this report, as required under Clause 49(IV)(F) of the Listing Agreement with the Stock Exchanges is attached separately in this Annual Report.

Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, had mandated inclusion of Business Responsibility Report as part of the Annual Report for Top 100 listed entities based on market capitalisation at BSE and NSE as on March 31, 2012. Accordingly, Report on Business Responsibility is provided separately in this Annual Report.

Auditors and Auditors'' Report

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, the statutory auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company. They have offered themselves for reappointment as statutory auditors and the Company has received letters from M/s. S.R. Batliboi & Associates LLP to the effect that their re- appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

M/s S.R. Batliboi & Associates LLP have also confirmed by way of a written consent and certificate as required under section 139(1) of the Companies Act, 2013 that their appointment, if made, shall be in accordance with the conditions prescribed in rule 4(1) of the Companies (Audit and Auditors) Rules, 2014.

With reference to the qualification in the auditors'' report on the standalone financial statements of the Company pertaining to the dispute in GMR Malé International Airport Private Limited (GMIAL), auditors'' observation is included in Basis for Qualified Opinion in the auditors'' report. Based on an internal assessment and a legal opinion obtained by GMIAL, the management of the Company is confident of proving that the concession agreement was not void ab initio and that GMIAL would be entitled for compensation under the concession agreement atleast to the extent of the carrying of the assets taken over by GoM / MACL and the subsequent expenditure incurred by GMIAL as at March 31, 2014. Further, subsequent to the year end, the hearings of phase I were concluded in April 2014 and the outcome of the same was announced in June 2014 in GMR''s favour. The Tribunal summarily rejected all the arguments made by the GoM and declared its ruling that the unilateral termination of the concession agreement by GoM was illegal and repudiatory. Quantification of the damages and the interest thereon will be determined in the next stage of arbitration by the same tribunal.

With reference to the qualification in the auditors'' report on the standalone financial statements of the Company pertaining to recognition on profit of sale of ISG and LGM, auditors'' observation is included in Basis for Qualified Opinion in the auditors'' report. The Management based on its internal assessment and a legal opinion is of the view that all the "Conditions Precedent" were either fulfilled or waived or agreed to be not applicable as at March 31, 2014, except for the buyer to obtain approval from Bank Negara Malaysia (not a "Condition Precedent") which was obtained on April 3, 2014 and subsequently on receipt of the sale consideration, the shares were transferred to the buyer on April 30, 2014. In view of the same, the Company has recognized the profit on sale of ISG and LGM in the year ended 31st March, 2014.

As regards to the auditors'' observation with respect to clause no. iv in the annexure to auditors'' report on the standalone financial statements of the Company on matters specified in Companies (Auditor''s Report) Order, 2003, the Company continuously reviews the internal control systems, identify weaknesses and further strengthens the processes, wherever required.

As regards to the auditors'' observation with respect to clause no. ix in the annexure to auditors'' report on the standalone financial statements of the Company on matters specified in Companies (Auditor''s Report) Order, 2003, Company ensures that statutory payments are made on time and has mechanisms for satisfactory compliance of these requirements. However, the processes will be further strengthened for avoiding any minor delays.

As regards to the auditors'' observation with respect to clause no. xv in the annexure to auditors'' report on the standalone financial statements of the

Company on matters specified in Companies (Auditor''s Report) Order, 2003, corporate guarantee support is provided by the Company to its subsidiaries and other group companies, based on requirements. Commission is normally not charged on corporate guarantees issued by the Company.

With reference to the qualification in the auditors'' report on consolidated financial statements of the Company pertaining to the capitalization of indirect expenditure and borrowing costs in GMR Rajahmundry Energy Limited (GREL), auditors'' observation is included in Basis for Qualified Opinion in the auditors'' report. GREL has approached the MCA seeking clarification / relaxation on applicability of provisions of AS-10 and AS-16 relating to the gas availability situation. The management of the Group is confident of obtaining necessary clarification / relaxation allowing such capitalization.

With reference to the qualification in the auditors'' report on consolidated financial statements of the Company pertaining to the capitalization of indirect expenditure towards project and borrowing costs in GMR Kishangarh Udaipur Ahmedabad Expressways Limited, auditors'' observation is included in Basis for Qualified Opinion in the auditors'' report. The management of the Group has submitted the proposal for the continuance of the project subject to certain modifications in the financial and other terms in the Concession Agreement and is confident of obtaining approval of these modifications by NHAI and recovering the expenditure incurred.

With reference to the qualification in the auditors'' report on consolidated financial statements of the Company pertaining to the dispute in GMIAL, and recognition of profit on sale of the investment in ISG and LGM, detailed management response is provided in earlier paras.

Corporate Social Responsibility (CSR)

With a belief that corporates have a special and continuing responsibility towards social development, GMR Group undertakes CSR activities on a significant scale through GMR Varalakshmi Foundation (GMRVF). The Vision of GMR Group''s CSR activities is to make sustainable impact on the human development of under-served communities through initiatives in Education, Health and Livelihoods. Towards such inclusive growth, GMRVF works with the communities neighboring GMR Group''s businesses for their economic and social development. Currently, GMRVF is working in over 200 villages/ urban communities across 23 locations. It also runs educational and healthcare institutions, and vocational training centers.

Environmental Protection and Sustainability

Since inception, sustainability has remained at the core of our business strategy. Besides economic performance, safe operations, environment conservation and social well-being have always been at the core of our philosophy of sustainable business. In anticipation of upcoming regulations and requirements, the company has invested substantially and allocated other resources to proactively adopt and implement manufacturing / business processes to increase its adherence to environmental standards and enhance its industry safety levels. At GMR Group, the challenges due to the Company''s operations related to EHS aspects of the business, employees and society are mapped and mitigated through a series of systematic and disciplined sets of policies and procedures.

The company continues to abide by regulations concerning the environment by allocating substantial investments and resources on a continuous basis to adopt and implement pollution control measures. Our continual endeavor to go beyond compliance and conserve natural resources helps to march towards attaining excellence in environmental management and efficient and sustainable operations as well. As the Company operates in an increasingly resource-constrained world, being environmentally conscious and efficient are key to our operations. The Company remains committed to our Corporate Environment, Health, Safety and Quality (EHSQ) Policy to articulate, guide, and adopt an integrated approach towards implementing EHSQ objectives. These established systems certified by reputed certifying agencies have helped to monitor and manage our operations systematically, safely and in environmental friendly manner. When such practices become institutionalized, they protect environment and reduce costs.

The Company understands the global thrusts for minimizing the effect of developmental projects towards global warming. The Company has developed various projects voluntarily and some of the Projects are under development stage, which ultimately reduces GHG emissions into the atmosphere and thus, minimizing the global warming effect. The Company has evolved as Sustainability leader by registering 7 CDM Projects with UNFCCC.

As a responsible corporate citizen, the Company is striving to meet the expectations of neighbouring communities around our plants and other locations through GMR Varalakshmi Foundation. The foundation works closely with them and strives to impact the lives of millions of farmers, youth, women and children through numerous programs.

Energy Sector

Energy Sector has continuously ventured to promote cleaner fuel operations and renewable energy. The super critical technology power plant is under development at Chhattisgarh. The 25 MW capacities Solar Photo-Voltaic based power generation, and 2.1 MW and 1.25 MW wind turbine generators in the state of Gujarat and Tamil Nadu respectively, with the total capacity of the wind turbine generator being 3.35 MW are now fully operational thereby underscoring the Company''s commitment towards sustainability in terms of clean and renewable energy resource.

GMR Energy sector has initiated to align its energy business in alignment with comprehensive "EHS Framework", adopting best manufacturing practices, optimizing energy, natural resources & technology, best available practices, go beyond compliance, etc.

All the operating units have all necessary statutory clearances in place and are in compliance with environmental regulations. The Company has adopted state of the art systems and measures to control emissions and effluent in design stage itself. Hazardous wastes management and disposal has been in accordance with Central Pollution Control Board (CPCB) guidelines. Continuous Stack Emission Monitoring System (CEMS) and continuous Ambient Air Quality Monitoring Systems (CAAQMS) at power plants have been set for monitoring of vital pollution parameters on real time basis. Also, each of the operating units has dedicated Effluent treatment

Plant to treat waste water from the units and utilize or discharge in accordance with Pollution Control Board Norms. All parameters like stack emissions, ambient air quality, water quality, noise level etc are maintained well within the stipulated norms. The monitoring reports are submitted periodically to statutory authorities. Internal audits and surveillance audits as per the requirements of ISO certifications are conducted and any observation or non-conformance is dealt with utmost importance. The system is managed by dedicated EHS team and steered frequently at Apex level for quick actions.

Various employee engagement campaigns are conducted at plant by celebrating world environment day, national safety week, national fire awareness week, national cleanliness day, road safety awareness week, energy conservation week, earth day, etc to create awareness and generate ideas for implementation. During mass plantation drive, employees, families, children and nearby villagers are involved. Dense green belt development is under progress.

Systems and processes as per Global Reporting Initiative (GRI-G4) are being implemented across all the power plants. It is initiated to report sustainability efforts of Energy Sector for FY 13-14 through its first ever Sustainability Report as per GRI-G4 guidelines. It would be published and made available to relevant stakeholders in FY 15-16.

EMCO Energy Limited (EMCO) obtained the renewal of consent to operate for Units -1 & 2 and it is valid up to 31st August 2014. In-principle approval for Wild Life Conservation plan has been granted by Divisional Forest Officer, Chandrapur, Maharashtra. Three CAAQMS stations and CEMS at stacks have been installed. Real time environmental data connectivity has been established with Maharashtra Pollution Control Board''s web-server. Display board is installed at main gate to show online CEMS and CAAQMS. Ground water quality monitoring is conducted on quarterly basis. Implementation of Integrated Management System (IMS) is under progress. First stage IMS audit was carried out by M/s BVCI. Energy audit was conducted by M/s CII- Godrej GBC. Dust suppression system is installed and commissioned and the treated effluent water is being used for sprinkling. 9,11,320 cubic meters of cooling water is recycled. 19000 numbers of saplings were planted over 20 acres during FY 13-14. The plant premises have installed rain-water harvesting structures for capturing the rain water through the well- connected drainage network.

GMR Kamalanga Energy Limited (GKEL) has valid consent to operate and Hazardous Waste Authorization for all three units. GKEL is certified for all three management systems viz., ISO 9001, ISO 14001 and OHSAS 18001.

Construction of power plant is still in progress at GMR Chhattisgarh Energy Limited. Application has been submitted to Chhattisgarh Environment Conservation Board (CECB) for granting Consent to Operate (CTO). Housekeeping drive was undertaken at Tilda Railway station for about one hour between 9 AM to 10 AM by GMR employees. 300 saplings were planted at Labour colony by GMR employees. Earth Day was commemorated on 22nd April 2014 through planting of 450 saplings at Labour colony. 100 saplings were supplied to Caramel Public School.

GMR Power Corporation Limited (GPCL), Chennai is recertified with OHSAS 18001, ISO 14001 and ISO 9001. Hazardous waste authorization is now renewed till 2018 by Tamil Nadu State Pollution Control Board. GPCL maintains the greenbelt inside the plant as per the statutory requirement. Blow down water of around 32.6 KL was reused for cooling system and other utilities in the FY 2013-14. Pollution Under Control (PUC) certificate is updated in employees'' vehicles to control the emission inside the plants.

GMR Vemagiri Power Generation Limited (GVPGL), Rajahmundry maintains the certification OHSAS 18001, ISO 14001 and ISO 9001. GVPGL has accrued about 95091 CERs from UNFCCC. Technical audit and Corporate EHS audit was conducted by MAG and Corporate EHS team respectively. Energy Conservation Initiatives of GVPGL and GMR Renewable Energy Ltd (GREL) have led to a saving of 2884 Mwh amounting to monetary savings of Rs. 3.36 Crore. GREL Consent to Operate (CTO) is renewed till 31st August 2015. Greenbelt over 8.6 Acers is developed in GREL during FY 2013-14.

GMR Energy Limited (GEL), Kakinada has renewed the certifications of OHSAS 18001, ISO 14001 and ISO 9001 up till Nov 2014. 500 saplings were planted as a part of Green Belt Development. Rain water harvesting System modification works and pipeline repair works were undertaken. Energy Conservation Initiatives resulted in savings of 1082604 Kwh per annum. GEL, Kakinada is now registered at Verified Carbon Standards Board (VCS Board) for its contribution towards GHG''s reduction by using cleaner fuel for power generation.

GVPGL, GREL, Alaknanda hydro project, Bajoli-Holi hydro project, Gujarat Solar Power project and Wind power projects at Gujarat and Tamil Nadu are registered as CDM Projects at UNFCCC.

Airport Sector

Airport Sector embraces the concept of sustainability by managing activities in environment friendly manner, minimizing natural resource utilization and maintaining collaborative relationships with the community and stakeholders. Our strategy for long-term stability and continual improvement is focused on cost-effective operation, social responsibility, environment and ecology oriented business approach and practices, which are governed and managed by latest technological processes, improved infrastructure, efficient operational measures, continuous learning and education, effective change management and communication with all possible stakeholders'' support.

Environment Sustainable Management is an integral part of our business strategy which helps in achieving social credibility and business sustainability by efficient integration of policy, system, procedures, infrastructure and community support. The Company adopted all possible proactive sustainable approach for the airport to develop an environment friendly posture that accommodates the community''s concerns while still meeting all regulatory requirements. Our key environmental & social elements which have direct/ indirect impact on society are aircraft noise, emission, air quality, water & wastewater, solid waste and conservation of natural resources. A dedicated team of professionals is deployed to deal with all areas of environmental and social concerns. All the impacts associated with its business aspect are being effectively resolved by working closely with the communities around the airport by proper knowledge sharing forum, media communications, communication to stakeholders and stakeholders meeting, further with the support of regulatory and government agencies.

Air & Water management is ensured by regular monitoring, analysis and following government regulations and guidance. Solid & Hazardous wastes are handled as per the applicable rules. Sewage treatment plant is operational to treat the waste water. Entire treated water is being reused appropriately for the flushing, irrigation purposes.

DIAL

In DIAL, besides ISO 14001:EMS certified by M/s DNV (valid till 21st July 2015), other systems viz., Energy Management System: ISO 50001 and ISO 14064 Carbon Emissions Management Systems are in place. Terminal 3 (T3) of Indira Gandhi International Airport (IGIA) became the first terminal in the world to get registered with UNFCCC for its CDM project having 16,413 MT of CO2 equivalent per annum reduction potential in July 2013. It is accredited by ACI for its Carbon Management at IGI Airport to "Optimisation Level". IGI Airport is the first airport in India to have mega 2 MW solar power plant at airside premises. It received "Greentech Environment Excellence Award-2013" under Gold category on 29th January 2014.

DIAL is monitoring ambient noise regularly in and around the airport including areas under the takeoff and landing funnels in adjacent communities. DIAL established an Aircraft Noise Monitoring System (ANMS) in order to develop a database of aircraft noise. Monitoring of noise levels will help in formulating future mitigation strategies on noise in parity with the working group on airport noise formed by DGCA. This group is exploring various possibilities and developing feasible measures to reduce excessive noise in the vicinity of IGI airport.

Various training programs have been organized for employees and stakeholders of IGIA on environment management programs, sustainability development and green company frameworks. Stakeholders of IGI Airport such as ground handlers, airlines, flight caters, cargo handling are also trained. DIAL is now aiming for its Fourth Level of ''Carbon Neutral'' with the support of all concerned stakeholders at IGIA. This will signify our airport- wide effort to tackle the global challenge of climate change and our commitment for reduction of carbon emissions.

GHIAL

GMR Hyderabad International Airport Ltd. (GHIAL) is complying with the applicable environmental legal requirements of DGCA, APPCB and MoEF. A proposal for 5 MW Solar Power Plant has been initiated as part of green energy promotion, for which, ''Consent for Establishment'' plant has been obtained from the State Pollution Control Board. An ''Environmental Portal'' has been developed for the environmental data management of Rajiv Gandhi International Airport (RGIA). RGIA became the 1st Airport in the country and 2nd airport in the Asia Pacific Region to get the accreditation for Level 3 (Optimization) ''Airport Carbon Accreditation'' by ACI. Continuous Improvement Projects (CIP) on water conservation has been awarded 1st Prize at GMR Group level CIP competitions. CIP on reduction in energy consumption has been awarded 1st Prize in GMR Group level CIP competitions.

World Environment Day 2013, Earth Hour, Ozone day and Earth Day were observed to create awareness on global environmental issues amongst the airport community. RGIA has won 1st prize for the best landscape in private institutions category, in the competition conducted by the Department of Horticulture, Government of Andhra Pradesh consecutively for last 4 years. GHIAL was also recognized with ASSOCHAM-CSR Excellence Award 2012-13 for Corporate Sustainability and FICCI CSR Award 2012-13.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The Particulars as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in the Annexure "C" included in this report.

Particulars of employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975, the names and other particulars of employees are set out in the Annexure ''D''. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Fixed Deposits

During the year under review, the Company has not accepted any deposits from the public.

Acknowledgements

Your Directors thank the lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large for their valuable Support and Co-operation. Your Directors also thank the employees of the Company and its subsidiaries for their continued contribution, commitment and dedication.

For and on behalf of the Board

Place: Bangalore G.M.Rao

Date: July 15, 2014 Executive Chairman


Mar 31, 2013

Dear Shareholder''s

The Board of Directors present the 17th Annual Report together with the audited accounts of the Company for the year ended March 31, 2013.

Financial Results

The Company is a diversified infrastructure company with operations and investments across the airport, energy, highways, urban infrastructure and EPC sectors and structured in a distinct way through subsidiaries with a unique business model. While the Company is a holding company for the investments made in airports, energy, highways and urban infrastructure and SEZ (Special Economic Zone) sectors it has Engineering, Procurement and Construction (EPC) business as a separate operating division within the Company to cater to the requirements for implementing the projects undertaken by the subsidiaries and others.

The Company''s revenue, expenditure and results of operations are presented through consolidated financial statements and the details are given below:

(Rs. in Crore)

Particulars March 31, 2013 March 31, 2012

Revenue from operations 9,974.86 8,473.03

Revenue share paid / payable to concessionaire grantors (1,669.48) (830.97)

Operating and administrative expenditure (5,697.34) (5,883.83)

Other Income 277.19 243.42

Finance Costs (2,099.00) (1,653.13)

Utilisation fees (130.87) (98.71)

Depreciation and amortisation expenses (1,039.78) (935.81)

(Loss) / profit before exceptional items, tax expenses and minority interest (384.42) (686.00)

Exceptional Items:

Profit on sale of a subsidiary 1,231.25 -

Loss on impairment of assets in a subsidiary (251.37) -

Assets write off in a subsidiary (202.61) -

Interest on loans against development fund receipts - (162.12)

Profit / (loss) before tax expenses and minority interest 392.85 (848.12)

(Loss) / profit from continuing operations before tax expenses and minority interest (440.39) (959.10)

Tax expenses (including tax adjustments for prior years, deferred tax, MAT credit entitlement) of continuing 241.94 190.47 operations

(Loss) / profit after tax expenses and before minority interest from continuing operations (682.33) (1,149.57)

Minority interest - share of (profit) / loss from continuing operations (86.40) 437.37

(Loss) / profit after minority interest from continuing operations (768.73) (712.20)

Profit / (loss) from discontinuing operations before tax expenses and minority interest 833.24 110.98

Tax expenses (including tax adjustments for prior years, deferred tax, MAT credit entitlement) of discontinuing 15.50 20.25 operations

Profit / (loss) after tax expenses and before minority interest from discontinuing operations 817.74 90.73

Minority interest - share of (profit) / loss from discontinuing operations 39.11 18.13

Profit / (loss) after minority interest from discontinuing operations 856.85 108.86

Profit / (loss) after minority interest from continuing and discontinuing operations 88.12 (603.34)

Net deficit in the statement of profit or loss-Balance as per last financial statements (714.17) (79.15)

Loss before appropriation (626.05) (682.49)

Appropriations (130.28) (31.68)

Net deficit in the statement of profit or loss (756.33) (714.17)

Earnings per equity share (Rs.) - Basic and diluted (per equity share of Rs. 1 each) 0.23 (1.55)

Earnings per equity share (Rs.) from continuing operations - Basic and diluted (per equity share of Rs. 1 each) (1.97) (1.83)

Earnings per equity share (Rs.) from discontinuing operations - Basic and diluted (per equity share of Rs. 1 each) 2.20 0.28

Consolidated revenue from operations grew by 17.72% from Rs. 8,473.03 Crore to Rs. 9,974.86 Crore. Airport, Energy, Highways, EPC and other segments contributed Rs. 6,099.07 Crore (61.14%), Rs. 2,425.13 Crore (24.31%), Rs. 517.37 Crore (5.19%), Rs. 655.16 Crore (6.57%) and Rs. 278.12 Crore (2.79%) respectively to the revenue from operations.

During the year, the group divested its balance 70% equity holding in GMR Energy (Singapore) Pte Limited and this has resulted in a profit of Rs. 1,231.25 Crore, which is presented as an exceptional item in the financial statements.

The group also divested its 50% equity in Tshedza Mining Resource (Pty) Ltd., which held the license for the development of Eloff mines and 74% equity interest in Ferret Coal (Kendal) (Pty) Ltd., which held the license for the development of Kendal Mines, HEG in South Africa. This resulted in an exceptional loss of Rs. 251.37 Crore. Consequent to the termination of operation in Male Airport, the group has written off assets of Rs. 202.61 Crore. The group has also entered into a Share Purchase Agreement for divestment of 74% stake in GMR Jadcherla Expressways Ltd. (GJEL).

Presented below are the standalone financial results of the Company:

(Rs. in Crore)

Particulars March 31, 2013 March 31, 2012

Revenue from operations 1,432.79 1,381.87

Operating and administrative expenditure (1072.01) (1,084.50)

Other Income 28.58 48.41

Finance costs (374.43) (197.35)

Depreciation and amortisation expenses (8.31) (7.58)

Profit before exceptional items and tax expenses 6.62 140.43

Exceptional items:

Profit on sale of investment 75.83 -

Profit before tax 82.45 140.85

Tax expenses (including deferred tax and MAT credit entitlement) (29.00) (20.55)

Profit for the year 53.45 120.30

Surplus in the statement of profit and loss - Balance as per last financial statements 382.37 298.64

Profit available for appropriation 435.82 418.94

Appropriations:

Transfer to debenture redemption reserve 81.53 36.57

Proposed final equity dividend 38.92 -

Tax on proposed equity dividend 6.31 -

Net surplus in the statement of profit and loss 309.06 382.37

Earnings per share (Rs.) - Basic and Diluted 0.14 0.31

The revenue from operations of the Company on standalone basis has gone up by 3.68% from Rs. 1,381.87 Crore to Rs 1,432.79 Crore. This has been contributed on account of increased revenue to the extent of Rs. 51.13 Crore from EPC segment. The increase in borrowings from Rs. 2,960.13 Crore to Rs. 4,237.20 Crore to meet the increased requirement of funds for investments in subsidiaries is the reason for the increase in interest expenditure from Rs. 197.35 Crore to Rs. 374.43 Crore. Profit on sale of the investment in GMR Energy (Singapore) Pte Limited amounting to Rs. 75.83 Crore, has been shown as an exceptional item in the financial statement.

Dividend

Considering the gain of Rs. 75.83 Crore earned by the Company on divestment of its stake in GMR Energy (Singapore) Pte. Limited and better operational performance base of the airport sector during the financial year under review, the Board of Directors has recommended a dividend of Rs. 0.10 per equity share of Rs. 1 each (10%) for the financial year (FY) ended March 31, 2013 subject to the approval of shareholders at the Annual General Meeting.

Subsidiary Companies

As on March 31, 2013, the Company had 127 subsidiaries apart from other joint venture and associate companies. Operation of businesses through subsidiaries is mainly due to requirement of concession agreements. The complete list of subsidiary companies as on March 31, 2013 is provided in Annexure ''A'' to this report.

Review of Operations / Projects of Subsidiary Companies and EPC

The detailed review of operations of each subsidiary''s business is presented in the respective Company''s Directors'' Report; a brief overview of the major developments thereof is presented below. Further, Management Discussion and Analysis, forming part of this Report, also brings out a brief review of the business operations of various subsidiaries, joint ventures.

Airport Sector

Airports business consists of four operating airports, with two in India at Delhi and Hyderabad, and two airports abroad at Istanbul, Turkey and Male. Male Airport has since been taken over by Maldives Airports Company Limited (MACL), an entity owned by Government of Maldives.

An overview of these assets during the year is briefly given below:

Delhi International Airport Private Limited (DIAL)

DIAL is a Joint Venture (JV) between GMR Group (54%), Airports Authority of India (AAI) (26%), Fraport AG Frankfort Airport Services Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private Limited (10%) and has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi. Passenger traffic at IGIA was 34.3 million in FY 2012-13, which has seen a marginal decline over the previous year in line with the 2% decline in the overall sector primarily due to decline in domestic air traffic by 9%. International traffic however went up by 8%. Cargo tonnage at IGIA recorded 0.546 MT which was 3.88% decline over the previous year, which followed the overall cargo decline of 4% in the sector. Revision of tariff rates during the year enabled DIAL post a profit after tax (PAT) of Rs. 72.52 Crore for the financial year under review.

The significant developments during the year were:

- DIAL was ranked the 4th best airport globally and 2nd best in the capacity band of 25-40 million passengers per annum (mppa) in the ASQ survey by Airport Council International (ACI);

- DIAL implemented Business Continuity Management System to avoid any operational disruptions due to unforeseen circumstances and became the world''s first airport to achieve the ''ISO 22301:2012 Certification'' for Business Continuity Management system;

- National Air Traffic Services implementation to maximize Runway/ Apron Utilization; Achieved Air Traffic Movements (ATMs) of 73/hour during peak hour operations, up from 65 movements per hour;

- Air Freight Station at Kanpur and Ludhiana launched;

- DIAL''s Carbon Emissions inventory has been verified as per ISO 14064 by M/s DNV and accredited by ACI for Level 2 (Reduction);

- DIAL has started Solar Power generation and has setup a pilot project for the same.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a JV Company promoted by the GMR Group (63%) in partnership with AAI (13%), Government of Andhra Pradesh (13%) and MAHB (Mauritius) Private Limited (11%). GHIAL has set up India''s first Greenfield Airport, Rajiv Gandhi International Airport (RGIA) at Shamshabad, Hyderabad.

RGIA recorded passenger traffic of 8.38 million in FY 2012-13, which is down by 3% over FY 2011-12. In FY 2012-13, international traffic grew by 10% as compared to FY 2011-12 while the domestic traffic declined by 6%. ATMs were 90,647 Nos. in FY 2012-13, which are down by 9% over FY 2011-12. In FY 2012-13, the domestic ATMs declined by 12% and international ATMs grew by 2% as compared to FY 2011-12.

The growth in international traffic was largely due to capacity increase i.e. inclusion of new airlines and increase in frequency of existing routes.

Cargo handled in FY 2012-13 was 83,990 tons which registered a growth of 3% over 2011-12. The domestic cargo declined by 2% and international cargo grew by 7% as compared to FY 2011-12. Better operating performance resulted in profit after tax (PAT) of Rs. 105.84 Crore for the financial year.

On domestic front, Kingfisher airlines withdrew its operations completely out of Hyderabad while Indigo and Spicejet added their capacities and routes.

The Company has adopted a two-pronged strategy, for overall improvement in its business. The first focused on airlines that are the primary customers called "Route Development Strategy" and the second one being "Passenger Development Strategy". The primary objective of these strategies are to make Hyderabad Airport as South and Central India''s gateway thereby enabling airlines to have financially sustainable operations from Hyderabad.

The following certificates were received during the year:

- 1st Airport in India to receive ISO 20000 certification for Best Practices in Information Technology Management;

- RGIA accredited ISO 50001:2011 - Energy Management System Certification.

Istanbul Sabiha Gokcen International Airport Limited (ISGIA)

ISGIA is promoted and developed by the consortium consisting of GMR Infrastructure Limited (GMR Group - 40%), Limak Holding (40%) and Malaysia Airports Holdings Berhad (20%). The terminal developed by the consortium has a capacity to handle up-to 25 million passenger per annum and has the rights to operate the terminal buildings, multi-story car park, cargo, aircraft refueling operations, airport hotel and Commercial Important Person (CIP) facilities in the airport.

ISGIA is located in the Asian side of Istanbul with connection to two major highways and has a catchment area of 20 million population. The city of Istanbul has a vibrant and growing economy and is the economic capital of the country. It is the 3rd most visited city in Europe and 5th in the world. ISGIA recorded 14.9 million total passengers in calendar year 2012, which corresponds to a 9% annual increase in total passenger traffic.

The group''s 40% share of loss of ISGIA was Rs. 123.33 Crore for the financial year.

ISGIA''s growth potential remains promising due to the capacity constraints at the city''s major Ataturk airport. As a result, nine new airlines started flights out of ISGIA during the year and Turkish Airways has also started new international destinations from ISGIA from March 2013.

GMR Male International Airport Private Limited (GMIAL)

- I brahim Nasir International Airport is a brownfield airport in Male, the capital city of Maldives. The airport is developed and operated by GMIAL, a joint venture partnership between GMR Group (77%) and Malaysia Airports (Labuan) Private Limited (23%);

- Refurbishment of existing commercial areas and development of new commercial areas was nearly complete, which were leading to an increase in discretionary consumer spending at the airports as more retail options were now available at the airport;

- New terminal development project was on track for an early 2014 commercial opening date before it had to be halted due to a ''Stop- Work'' order by the Ministry of Civil Aviation, Maldives in August, 2012;

- Overall passenger traffic at the airport had increased 6.5% for the 8 months period in FY 2012-13. International traffic grew at 1.9% compared to the same period last year, despite negative impact on international tourist traffic due to political disruptions in first half of calendar year 2012;

- The airport was taken over by MACL, an entity owned by Government of Maldives, on December 08, 2012 declaring that the concession agreement is void ab-initio and the arbitration process has been initiated for settlement.

- Management of the group is confident of proving that the concession agreement was not void ab-initio and that group would be entitled for compensation under the concession agreement.

Aerotropolis Development

Hyderabad and Delhi airports and surrounding land are being developed as an airport city or "Aerotropolis", with a mix of aeronautical and non- aeronautical developments. As adjoining commercial areas to the airports, they are bound to encourage the business activity and have a positive impact on the economy. DIAL is developing Aerocity in the locality of the Delhi Airport which may ultimately cover 250 acres of land.

GHIAL is developing India''s largest Airport City in the vicinity of Hyderabad Airport with an objective of creating an ecosystem that will generate benefits for the Airport as well as the regional economy and facilitate in establishing the prominence of Hyderabad Airport in the global arena. Master Plan for the entire Airport City has been completed and the physical infrastructure activities have started. The initial phase assets consisting of Aerospace SEZ, Retail, Business School, Exhibition Centre etc. are in various stages of design and development.

GMR Aviation Private Limited

GMR Aviation Private Limited operates and owns one of the youngest fleets in the country and addresses the growing need for charter services in the country. The operations are managed by professionals with robust processes and systems to ensure highest levels of efficiency and safety. The company has three aircrafts (two Falcons and one Hawker) and two helicopters in its fleet. Due to slow down of Indian Economy, the overall business for internal as well as external air charter has come down, which resulted in a loss of Rs. 31.11 Crore, which includes Rs. 8 Crore for cancelation of purchase agreement of an aircraft.

Aircraft - Maintenance, Repair and Overhaul (MRO)

The MRO facility is a part of aero SEZ of GMR Hyderabad International Airport. It is being operated by MAS GMR Aero Technic Limited ("MGAT") which is a wholly owned subsidiary of MAS GMR Aerospace Engineering Company Limited ("MGAE"). MGAE is a 50:50 joint venture set up by GHIAL and Malaysian Aerospace Engineering Sdn Bhd.

The MRO facility has ultra-modern facilities for aircraft maintenance, painting, avionics upgrades, interior refurbishments, aircraft modifications and structural repairs. It can cater to various types of narrow-body as well as wide-body aircraft belonging to Airbus, Boeing and ATR families.

During the year under review, maintenance service was provided on 30 various families of aircraft which include C-checks on B737-800, B737-900, ATR-72, A320, and A321 for domestic customers and painting on Cessna Citation 560XL and ATR 72-500 aircraft. Additionally Engine Change, Nose Landing gear & Main Landing gear change were carried out on B737-800 & B737-900 aircraft. Apart from the above, seat retrofit was performed on two A320 aircraft. The main customers during the year were - Spicejet, Go Air, Kingfisher and Indigo. The group''s 50% share of loss of MGAT was Rs. 45.35 Crore.

Energy Sector

Energy Sector through Special Purpose Vehicles (SPVs) is operating around 1484 MWs of Coal, Gas, Liquid fuel and Renewable power plants in India and around 5690 MWs of power projects under various stages of construction and development besides a pipeline of other projects. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements.

The current operating portfolio of energy sector comprises of:

Name of SPV Capacity Fuel

GMR Power Corporation Limited (GPCL) 200 MW LSHS

GMR Vemagiri Power Generation Limited (GVPGL) 388 MW Natural Gas

GMR Energy Limited (GEL) 220 MW Natural Gas

EMCO Energy Limited (EEL) - Unit 1 300 MW Coal

GMR Gujarat Solar Power Private Limited 25 MW Solar

GMR Renewable Energy Limited 2.1 MW Wind

GMR Power Infra Limited 1.25 MW Wind

The following are the major highlights of the Energy sector:

Operating Assets

- GPCL Achieved Energy management system Certification - ISO 50001;

- GPCL achieved the GREEN Award from Tamil Nadu Pollution Control Board (TNPCB) presented by Honorable Chief Minister;

- GEL & GVPGL operated at a suboptimal PLF of about 25% due to reduced gas supply;

- Gujarat Solar Project and wind projects achieved Clean Development Mechanism (CDM) registration.

The Company along with its overseas subsidiary sold balance 70% interest in GMR Energy (Singapore) Pte Ltd.

The energy sector continues to face constraints in terms of availability of coal and gas for running the power plants. The supply of coal in India is not adequate due to lower production of coal which in turn necessitated many power producers to import coal with attendant risks in relation to pricing, government policies of the exporting countries, transportation etc. The availability of gas is also another challenge faced by the power producing companies. Lack of adequate fuel in the country continues to adversely impact the performance of the subsidiaries in the energy sector.

Amongst the energy subsidiary companies, GMR Power Corporation Limited, GMR Gujarat Solar Power Private Limited and GMR Renewable Energy Limited made a profit of Rs. 91.03 Crore, Rs. 9.05 Crore and Rs. 0.59 Crore respectively. GMR Energy Limited, GMR Vemagiri Power Generation Limited, EMCO Energy Limited and GMR Energy Trading Limited made a loss of Rs. 494.92 Crore, Rs. 76.93 Crore, Rs. 17.12 Crore and Rs. 16.27 Crore respectively. Loss in GMR Energy Limited includes an exceptional loss on account of impairment of investment in HEG of Rs. 350.47 Crore.

The Company has projects under implementation, which on completion will result in substantial increase in power generating capacity. Update on projects under implementation is given below:

- EMCO Energy Limited (EMCO): Unit 1 (300 MW) commissioned;

- EMCO: Won Case I bid for supply of 200 MW to Dadra and Nagar Haveli distribution company for 7 years 3 Months term;

- EMCO Unit - 1 Fuel Supply Agreement signed with South Eastern Coalfields Ltd.;

- GMR Kamalanga Energy Limited (GKEL): Unit 1 (350 MW) commercial operation achieved on April 29, 2013;

- GMR Chhattisgarh Energy Limited [Chhattisgarh Thermal Power Plant (CTPP)]: Achieved Integrated Management System (IMS) certification for successful implementation of Quality, Environmental & Safety standards;

- The implementation of coal based projects is progressing well to achieve commercial operation of the plant (all the units of GKEL, EMCO and first unit of CTPP) during the financial year 2014;

- Alaknanda and Bajoli Holi Hydro projects received all statutory clearances including Stage II forest clearance and CDM registration;

- Nepal Hydro projects achieved key project development milestones as per plan and license for import of power to India for a period of 30 years was obtained from Directorate General of Foreign Trade (DGFT), Government of India (GOI).

Highways

The FY 2012-13 has seen a decline in the highway sector due to various factors such as slowed economic situation, delay in clearances, sand quarry and mining bans, power shortage, funding constraints, etc. This has resulted in lower investment from private players in infrastructure in general including roads and highways sector.

GMR Highways Limited is one of the leading highways developers in India with 8 operating highways of total length of 3170 lane kms and 1 project under construction of total length of 178 lane kms. There is a healthy mix of 5 toll projects, viz Ambala - Chandigarh, Thondapalli - Jadcherla, Tindivanam - Ulundurpet, Hyderabad - Vijayawada and Hungund - Hospet; and 4 annuity projects, viz Tuni - Anakapalli, Tambaram - Tindivanam, Adloor Yellareddy - Gundla Pochanpalli and Chennai Outer Ring Road. The group entered into a Share Purchase Agreement for divestment of 74% stake in Thondapalli - Jadcherla project. Quality of construction and operational safety are of utmost priority.

Highways sector operating subsidiary companies, GMR Tambaram Tindivanam Expressways Private Limited, GMR Tuni Anakapalli Expressways Private Limited, GMR Pochanpalli Expressways Limited and GMR Jadcherla Expressways Private Limited, made a profit of Rs. 9.30 Crore, Rs. 6.47 Crore, Rs. 17.96 Crore and Rs. 2.08 Crore respectively. GMR Ambala Chandigarh Expressways Private Limited, GMR Hyderabad Vijayawada Expressways Private Limited, GMR OSE Hungund Hospet Highways Private Limited and GMR Ulundurpet Expressways Private Limited made a loss of Rs. 23.13 Crore, Rs. 21.47 Crore, Rs. 14.39 Crore and Rs. 8.25 Crore respectively.

During FY 2012-13, COD of Hyderabad Vijayawada project and partial COD of Hungund Hospet project was achieved overcoming various challenges during the construction lifespan viz. delay in land acquisition and local agitation. Arbitration process was initiated in respect of Ambala Chandigarh for loss of traffic under State Support Agreement & Concession Agreement (SSA & CA).

Kishangarh-Udaipur-Ahmedabad Highway

Amid various economic challenges, financial closure was successfully achieved for the development of four lane 555.5 Km long Kishangarh - Udaipur - Ahmedabad highway into a six lane highway, the first mega highway project in the country which the company had won in international competitive bidding. While the Company completed/complied with most of its obligations within stipulated time from the signing of the agreement, on the other hand, the Highways Authority could not fulfill its key obligations within the stipulated time, including getting the Environmental and Forest Clearance and issuing the Fee notification for the project. This has led to an inordinate delay in fixing the "appointed date" and there was no certainty as to when these key conditions would be fulfilled by the Authority. This uncertainty has materially affected the project putting additional financial burden on the Company. Considering these uncertainties and various unfavorable factors that were beyond Company''s control, the Company issued a notice of termination of concession agreement to the Highways Authority. Highways ministry is proactively working with other ministries, government authorities and various industry bodies for resolving the issues.

Urban Infrastructure

With the objectives of generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities and development of infrastructure facilities, the urban infrastructure sector is focusing on developing special investment regions.

Kakinada and Krishnagiri SEZ

With the master plan underway for both the special investment regions in the year under review, all the necessary approvals on utility front from the Government, which includes approval for ground water abstraction, approval for power, consent for establishment and no objection certificate from Forest Department was obtained.

On the Kakinada SEZ development front, Memorandum of Understanding (MoU) has been signed with Rural Shores for setting up of BPO and two ''Letters of Intent'' with fisheries processing firms for setting up of Marine Park. The Marine Park is expected to generate an employment to 3000 people in the region.

On Krishnagiri SEZ development front, a detailed plan on the EMC (Electronic Manufacturing Cluster) has been submitted to Department of Electronics and Information Technology (DeITY) and waiting for an in-principle approval from the Government for a greenfield EMC.

A concept note for setting up a Multi Skill Development Center (MSDC) has been submitted to Government of Tamilnadu. MoU with Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) has been signed for designing and establishing MSDCs in both Kakinada and Krishnagiri Regions.

Engineering Procurement and Construction (EPC) Division

The Company had entered the EPC business to mitigate execution risk for in-house project development. EPC Division has been instrumental in successful and timely completion of new Highway assets. Apart from Highway Projects, EPC Division is supporting GMR Energy business in Balance of Plant (BoP) Segment and has completed Coal handling Unit at EMCO (Warora Power Plant). EPC Division has also undertaken Coal Blending system, Ash handling plant, Raw water Reservoir, Township and other non- plant structures.

Key highlights of the year under review were:

- Completed Hyderabad-Vijayawada Toll Project (0-65 kms)

- Completed 4-laning of Hungund-Hospet Toll Project (22 kms of 4 laning)

- Commissioned Coal Handling Plant at Warora Power Plant

Over the last three years, EPC Division has built an over Rs. 100 Crore Equipment Bank which includes Batching Plants, HMP Plants, Boom Placer and other equipment.

Risk Management

As an enterprise with presence in different segments of infrastructure industry and considering the high levels of economic volatility currently witnessed in the global markets, the Company is exposed to a number of risks that impact our businesses in varying measures. It is imperative to identify and address these risks and at the same time leverage opportunities for achieving the set objectives.

The Company''s risk management framework is in line with the current best practices and effectively addresses the emerging challenges in a dynamic business environment.

Significant developments during the year include:

- Delhi International Airport Private Limited (DIAL) became the first airport in the world to be certified for ISO-22301:2012, Societal Security- Business Continuity Management System;

- Project Risk Management framework has been strengthened along with one of the top consultants in the world and being implemented for the ongoing projects;

- A Contractual Risk Review Framework has been developed for implementation across the Group that would help us in identifying and addressing contract related risks and compliance areas in an appropriate manner;

- Risk management process is critically woven in the strategic planning process with various risks identified to the strategic objectives of all the businesses and initiatives defined to address them;

- Risk review of important policies impacting the group such as treasury policy, foreign exchange policy and insurance policy manual etc. taken up;

- Formalized a country risk and opportunity profile framework to evaluate different countries being explored by the Group for investments and other business opportunities.

The Enterprise Risk Management (ERM) Team presents to the Management and the Audit Committee of the Board, the risk assessment and minimization procedures adopted to assess the reliability of the risk management structure and efficiency of the process.

A detailed note on risks and concerns affecting the businesses of the Company is provided in Management Discussion and Analysis.

Developments in Human Resources and Organisation Development

The Company has robust process of human resources development which is described in detail in Management Discussion and Analysis section under the heading "Developments in Human Resources and Organisation Development at GMR Group".

Consolidated Financial Statements

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet, statement of Profit and Loss and other documents of its subsidiary companies to its Annual Report. The Ministry of Corporate Affairs (MCA), Government of India vide its General Circular No.2/2011 dated February 8, 2011 has provided an exemption to the companies from complying with section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2012-13 does not contain the reports and other statements of the subsidiary companies. The annual audited accounts and related detailed information of the subsidiary companies will be available to the investors of the Company upon request. These documents will also be available for inspection during business hours at the registered office of the Company.

The statement pursuant to the aforesaid circular of the MCA about financial information of each subsidiary containing details of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend is provided as Annexure ''B'' to this report. However, the financial statements of GMR Corporate Centre Limited (GCCL) are not consolidated, since GCCL is a guarantee company having no share capital and commercial operations.

As required by the Listing Agreement with the Stock Exchanges, the audited consolidated financial statements of the Company and its subsidiaries, joint ventures and associates form part of the Annual Report.

Changes in Share capital

During the year under review, there is no change in the share capital structure of the Company.

Directors

Mr. B.V.N. Rao resigned as the Managing Director of the Company with effect from July 28, 2013. The Board places on record its appreciation for valuable contribution made by Mr. B.V.N. Rao during his tenure as the Managing Director of the Company.

Mr. Kiran Kumar Grandhi has been appointed as the Managing Director with effect from July 28, 2013 for a period of five years subject to the approval of the members at the Annual General Meeting.

Mr. G. M. Rao was reappointed as Executive Chairman for a period of five years with effect from October 18, 2012.

Mr. B.V.N. Rao and Mr. G.B.S. Raju, Directors retire by rotation and being eligible offer themselves for reappointment at the Annual General Meeting. Mr. K. R. Ramamoorthy retires by rotation at the Annual General Meeting and has expressed his desire not to offer himself for reappointment in line with the policy on retirement of independent directors. Mrs. Vijaya Mohan Ram, who was appointed as an additional director on September 11, 2012, will cease to hold office at the forthcoming Annual General Meeting. The Board places on record its appreciation for the valuable contribution made by them during their tenure as Directors of the Company.

Mr. S. Sandilya was appointed as an additional director on September 11, 2012 and holds office till the Annual General Meeting. Mr. K.V.V. Rao and Mr. S. Rajagopal were appointed as additional directors on the Board with effect from November 12, 2012 and they hold office till the Annual General Meeting. Notices under section 257 of the Companies Act, 1956 have been received from a member for their appointment as Directors.

Notices under section 257 of the Companies Act, 1956 have been received from a member for the appointment of Mr. V. Santhana Raman and Mr. C.R. Muralidharan at the forthcoming Annual General Meeting of the Company. The profiles of the Directors seeking appointment / reappointment are given in the Notice of the Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to under Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:

1. That in the preparation of the annual accounts for the year ended March 31, 2013, the applicable Accounting Standards have been followed and proper explanations were provided for material departures, if any;

2. That the Directors have 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 as at the end of the financial year and of the profit of the Company for that period;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the accounts for the financial year ended March 31, 2013, on a going concern basis.

Corporate Governance

The Company follows the Business Excellence Framework, based on the Malcolm Baldridge Model, for continuous improvement in all spheres of its activities, to attain global standards including a clear focus on high standards of corporate governance. The company works towards continuous improvement in governance practices and processes. Board governance upgrades are underway and will be implemented in a progressive manner.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report. Also a detailed report on Corporate Governance practices followed by the Company, in terms of Clause 49 (VI) of the Listing Agreement with Stock Exchanges, is provided separately in this Annual Report.

Secretarial Audit

As per SEBI requirement, Reconciliation of Share Capital Audit is being carried out at specific periodicity by a Practicing Company Secretary. The findings of the audit have been satisfactory. In addition, Secretarial Audit was carried out voluntarily for ensuring transparent, ethical and responsible governance processes and also proper compliance mechanisms in the Company. M/s. V. Sreedharan & Associates, Company Secretaries, conducted Secretarial Audit of the Company and a Secretarial Audit Report for the financial year ended March 31, 2013, is provided in this Annual Report.

Management Discussion and Analysis (MDA)

The MDA, forming part of this report, as required under Clause 49(IV)(F) of the Listing Agreement with the Stock Exchanges is attached separately in this Annual Report.

Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated inclusion of Business Responsibility Report as part of the Annual Report for Top 100 listed entities based on market capitalisation at BSE and NSE as on March 31, 2012 . Accordingly, Report on Business Responsibility is provided separately in this Annual Report.

Auditors and Auditors'' Report

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, the statutory auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company. They have offered themselves for reappointment as statutory auditors and have confirmed that their appointment, if made, will be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

With reference to the qualification in the auditors'' report on the standalone financial statements of the Company pertaining to the dispute in GMR Male International Airport Private Limited, auditors'' observation is included in Basis for Qualified Opinion in the auditors'' report. Management''s disclosure on the qualification is detailed in note 43 of the notes to the standalone financial statements.

As regards to the auditors'' observation with respect to clause no. xv in the annexure to auditors'' report on matters specified in Companies (Auditor''s Report) Order, 2003, corporate guarantee support is provided by the Company to its subsidiaries and other group companies, based on requirements. Commission is normally not charged on corporate guarantees issued by the Company.

With reference to the qualifications in the auditors'' report on consolidated financial statements of the Company pertaining to the capitalization of indirect expenditure and borrowing costs in GMR Rajahmundry Energy Limited, capitalization of indirect expenditure towards project and borrowing costs in GMR Kishangarh Udaipur Ahmedabad Expressways Limited and dispute in GMR Male International Airport Private Limited, auditors'' observation is included in Point 1, 2 and 3 respectively under Basis for Qualified Opinion in the auditors'' report. Management''s disclosure on the qualifications are detailed respectively in note 35(viii)(j) (2), note 35(viii)(n) and note 30(a) & 35(viii)(m) of the notes to the consolidated financial statements.

Corporate Social Responsibility (CSR)

With a belief that corporates have a special and continuing responsibility towards social development, GMR Group is undertaking CSR activities on a significant scale through GMR Varalakshmi Foundation (GMRVF). The Vision of GMR Group''s CSR activities is to make sustainable impact on the human development of under-served communities through initiatives in Education, Health and Livelihoods. Towards such inclusive growth, GMRVF works with the communities neighboring GMR Group''s businesses for their economic and social development. Currently, GMRVF is working in over 200 villages/ urban communities across 22 locations.

Environmental Protection and Sustainability

The Company has been aligning sustainability to assist organization in identifying the cross-cutting dimensions of triple bottom line performance and in understanding the process elements of environmental accountability and engagements. Triple bottom line performance expands the traditional reporting framework to take into account social and environmental performance in addition to financial performance.

Every business operations should be driven with core values in accordance with business requirements to attain sustainability with respect to social, environment and economy. The Company''s business culture is cautiously driven through 7 core values (GMR Values & Beliefs) viz., Humility, Entrepreneurship, Teamwork and Relationships, Deliver the promise, Learning, Social Responsibility and Respect for Individual. Thus, Company''s Environmental Initiatives are driven with three main values and beliefs -''Humility'', ''Social Responsibility'' & ''Respect for Individual'' towards achieving the harmony with nature and society.

The Company believes in integrating strong environmental management practices into its industrial enterprises across all business operations. Each business enterprise has been covered under stupendously articulated Corporate Environmental, Health, Safety & Quality (EHSQ) Policy. Sustainable practices reduce risks to life and property, and improve system efficiency which helps to conserve natural resources. When such practices become institutionalized, they reduce costs. Several unique schemes have been implemented to prevent pollution and conserve natural resources to achieve sustainable development.

The Company is aggressively implementing national policies, regulation and objectives in Environmental Management and Pollution Control measures. Continuous efforts are laid to build the strong foundation towards environmental excellence for all of its operations.

Airport Sector

At DIAL, the Operational Environment management focuses on energy management, air quality, noise level, emissions management, waste management, water and waste water management, natural resource conservation and bird and animal hazard management. Proactive and collaborative efforts such as Workshop on Carbon Footprint of Indian Aviation with Directorate General of Civil Aviation (DGCA), Airports and Airlines, Community Noise issues discussions along with DGCA and Ministry of Civil Aviation and Collaborative Environment Management Programs with stakeholders are examples of efforts on social concerns.

DIAL is successfully maintaining its certifications for all the international programs to which it subscribes through continual improvement in the environmental performance. ACI has recognized DIAL for Greenhouse Gas (GHG) Inventory and Accredited to the Reduction Level under Airport Carbon Accreditation. DIAL has bagged the Greentech Environmental Management Award, 2013 for the best environmental practices. DIAL in collaboration with International Air Transport Association (IATA) conducted the workshop on ''Infrastructure, Fuel Efficiency for Emission Reductions & Sustainable Aviation Environment Management'' and 70 numbers of participants were certified. Various workshops and training on Environmental Management System, Environmental Legal requirement, green initiatives, and CSR for Aerocity builders were some of the prime initiatives during FY 2012-13.

DIAL has established an Aircraft Noise Monitoring System (ANMS) and the Indira Gandhi International Airport Noise Mapping with DGCA & National Aerospace Laboratory is done.

As part of Corporate Environmental Responsibility, GHIAL has voluntarily initiated and completed the GHG accounting since the calendar year 2009 till 2012. Further, it has successfully completed verification of the GHG data through third party as per ISO 14064-1 specifications. By this, GHIAL has obtained level of assurance for its reduction of GHG emission. Airport Council International has accredited RGIA under the Airport Carbon Accreditation Programme - level 2 during FY 2012-13. Online continuous environmental monitoring station has been installed at RGIA. Ambient air quality, meteorological parameters and ambient noise levels are being monitored. This initiative forms one of the best environmental practices at Indian Airports. GHIAL has bagged First Prize for the Best landscape in Private Institutions category (3rd consecutive time), First Prize for the Best Rotaries and Second Prize for Residential Township. The award was received from the Commissioner Horticulture, Department of Horticulture, Government of Andhra Pradesh.

This year a group wide initiative was undertaken to conserve electricity and water through project ''Bijlee'' (Electricity) and project ''Paani'' (Water) respectively.

Energy Sector

All the Operating units are in compliance with environmental regulations. Hazardous wastes management and disposal has been in accordance with Central Pollution Control Board (CPCB) guidelines. The environmental management system followed at these operating units provides no- opportunity for any environmental violations through establishment of continuous ambient air monitoring systems at appropriate locations in and around the plants. Thus, environmental performance indicators like stack emissions, ambient air quality are maintained well within the stipulated norms. Also, each of the operating units has dedicated Effluent treatment Plant to treat waste water from the units and discharge in accordance with Pollution Control Board Norms. Noise level monitoring has been the part of the monitoring scheme which will ensure the noise levels within the legal perimeter and also, helps in quick identification of any abnormality during operation.

Energy Sector has continuously ventured to promote cleaner fuel operations and renewable energy. The supercritical technology power plant is under development at Chhattisgarh. The 25 MW capacity Solar Photo-Voltaic based power generation has become part of the success story under Phase-1 of Gujarat Solar Power Policy-2009. Further, installation of 2.1 MW and 1.25 MW wind turbine generators in the state of Gujarat and Tamil Nadu respectively with the total capacity of the wind turbine generator being 3.35 MW has added the Company for its one step ahead commitment towards sustainability in terms of clean and renewable energy resource.

Energy Sector has pledged its commitment beyond the regulatory compliance and thus, ensuring the implementation of internationally accredited Management Systems at major units at operation. Environmental Management System (ISO 14001:2004) has been successfully implemented and certified by the certification agency. The strong management review through triple bottom-line approach ensures the continuous improvement in environmental performance.

GMR Power Corporation Limited (GPCL), Chennai plant has successfully maintained the performance standards in accordance with OHSAS 18001, ISO 14001 and ISO 9001. Further, to add the feather into its cap, the GPCL is certified with ISO 50001:2011 (Energy Management Systems) which is one of the first-of-its-kind standardization norms to any power plant and thus, the energy conservation initiatives resulted in savings of 1.42 Million Units of power during FY 2012-13. Also, GPCL has been rewarded with ''GREEN Award'' from Government of Tamil Nadu for Environment protection activities, recycling the waste water, and reduction in usage of fossil fuels. The best environmental practices are consistently thriving to achieve the best environmental performance throughout the year.

GMR Vemagiri Power Generation Limited (GVPGL), Rajahmundry has also maintained the certification OHSAS 18001, ISO 14001 and ISO 9001. This year was marked with greenery development with 4500 saplings planted in the plant premises. The company was able to harvest rain water of 1,00,000 m3 during the season, and also conserve 30,000 m3 of water for gardening purpose through recycling of Cooling Tower (CT) blow down water. GVPGL, which is also registered as CDM project under Kyoto Protocol, has already been contributing towards the GHG emission reduction and Sustainable Development.

GMR Energy Limited (GEL), Kakinada has maintained the certification for Environmental Management System (ISO 14001:2004) in accordance to the standards requirement for continual improvement. The plant premises have enhanced the rain-water harvesting potential through the well-connected drainage network. GEL, Kakinada is now registered at Verified Carbon Standards Board (VCS Board) for its contribution towards GHG''s reduction by using cleaner fuel for power generation.

GHG Accounting as per ISO 14064-1 specifications is already initiated at GVPGL, GEL and GPCL voluntarily to map the carbon foot print of the power plant.

GMR Infrastructure Limited (GIL) understands the global thrusts for minimizing the effect of developmental projects towards global warming. The Company has developed / under development of various projects voluntarily, which ultimately reduces GHG emissions into the atmosphere and thus, minimizing the global warming effect. GMR Rajahmundry Energy Ltd., Rajahmundry which utilizes Natural Gas (Clean fuel) for power generation has been successfully registered as CDM Project at United Nations Framework Convention on Climate Change (UNFCCC) during the FY 2012-13. The two hydro projects promoted by the Company at the location of Alaknanda and Bajoli-Holi have been registered under CDM at UNFCCC during the FY 2012-13. Further, the Solar Power project set up at Gujarat and Wind power project at Gujarat and Tamil Nadu are also registered as CDM Projects at UNFCCC.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The Particulars as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in the Annexure "C" included in this report.

Particulars of employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975, the names and other particulars of employees are set out in the Annexure ''D''. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Fixed Deposits

During the year under review, the Company has not accepted any deposits from the public.

Acknowledgements

Your Directors express their appreciation for the valuable support and co- operation received from lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large. Your Directors thank the employees of the Company and its subsidiaries for their continued contribution and commitment.

For and on behalf of the Board

Place: Bengaluru G. M. Rao

Date: July 27, 2013 Executive Chairman

 
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