Home  »  Company  »  GMR Airports Infra  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of GMR Airports Infrastructure Ltd.

Mar 31, 2023

The Board of Directors present the 27th Annual Report together with the audited financial statements of the Company for the Financial Year (FY) ended March 31, 2023.

Your Company, GMR Airports Infrastructure Limited (formerly known as GMR Infrastructure Limited) ("GIL"), is a leading global infrastructure conglomerate with unparalleled expertise in designing, building, and operating Airports in India and overseas.

The name of the Company has changed from GMR Infrastructure Limited to GMR Airports Infrastructure Limited w.e.f September 15, 2022. Further the Registered Office of the Company has been shifted from Mumbai, Maharashtra to Gurugram, Haryana and consequently the CIN of the Company has changed from "L45203MH1996PL C281138" to "L45203HR1996PLC113564".

GMR Group is the largest private airport operator in Asia and one of the largest globally with current operational passenger handling capacity of more than 100 million annually. The Group operates the iconic Indira Gandhi International Airport at Delhi (Delhi International Airport), which is the largest airport in India. The Group also runs Rajiv Gandhi International Airport at Hyderabad (Hyderabad International Airport), a pioneering greenfield airport known for several technological innovations. The Group is also operating Manohar International Airport, Mopa, Goa (Goa Airport at Mopa) and Bidar Airport in Karnataka. With respect to international airports, the Group is operating the architecturally renowned Mactan Cebu International Airport in Cebu, Philippines, in partnership with Megawide and Aboitiz InfraCapital Inc. Expanding its overseas footprint, GMR Group, in collaboration with Angkasa Pura II (AP II), has started operating Kualanamu International Airport in Medan, Indonesia from July 7, 2022.

The Group is currently developing two major greenfield airport projects in India and Greece, which includes Airport at Bhogapuram in Andhra Pradesh and Airport at Heraklion, Crete, Greece in partnership with GEK Terna. Bhogapuram Airport in India is poised to transform the economy and landscape of the surrounding areas when ready. Crete Airport in Greece will similarly play a significant role in the local economy of the region. India''s aviation market is expected to grow at an average of 7% p.a. till 2040. Further a mature tariff regime for aero revenue is strengthening the Company''s ''Sustainable Cash Flow Profile''. GMR Group has Proven track record of strategic partnerships with marquee names like Groupe ADP, Fraport and Malaysia Airports.

As a pioneer in implementing the path breaking Aerotropolis concept in India, GMR Group is developing unique airport cities on commercial lands available around its airports in Delhi, Hyderabad and Goa. GMR

Delhi Aerocity is a landmark business, leisure, and experiential district.

Similarly, GMR Hyderabad Aerocity is coming up as a new-age smart

business hub.

Performance highlights - FY 2022-23

Performance Highlights of your Company on consolidated basis for

the FY 2022-23:

• The Board of Directors of the Company at its meeting held on March 19, 2023 has approved a Composite Scheme of Amalgamation and Arrangement among GMR Airports Limited (GAL) and GMR Infra Developers Limited (GIDL) and the Company and their respective shareholders and creditors, subject to necessary approvals.

• The Company entered into agreement with Groupe ADP to settle the earnout based on achievement of certain milestone (which was to be settled through the Bonus Series B, C and D CCPS) agreed at the time of investment by Groupe ADP in GAL at '' 550 crore as full settlement.

• The Company had issued and allotted 6.76% Unlisted Foreign Currency Convertible Bonds ("FCCB") aggregating Euro 330.817 million equivalent to '' 2,931.77 crore to Aeroports De Paris S.A. (Groupe ADP) with a maturity period of 10 year and 1 day.

• Subscription of FCCB''s by Groupe ADP and settlement of earnouts will be utilized to repay debt of subsidiaries/ fellow subsidiaries for which GIL had provided security/guarantee.

• During FY 2022-23, the Group has received '' 13.9 bn from divestment of stake in Cebu Airport (GMCAC). GMR will continue to operate as the technical service provider until December 2026 and will also be entitled to additional deferred consideration based on the subsequent performance of the airport during the period.

• The Group has entered into a financial partnership with National Investment and Infrastructure Fund (NIIF) for investing equity capital in three airport projects including Mopa (Goa) and Bhogapuram (Visakhapatnam, Andhra Pradesh) airports. Subsequent to the year end, the group has received primary investment of '' 6.31 bn from NIIF in the form of Compulsory Convertible Debenture issued by GMR Goa International Airport Limited ("GGIAL").

• Goa Airport at Mopa has achieved COD; Domestic operations commenced from January 5, 2023. Currently, 21 domestic destinations are connected. International operation have also commenced recently in the month of July, 2023. Land monetization process for two hotel plots and retail interchange has been initiated.

• Delhi International Airport Limited ("DIAL") has successfully

raised '' 10 bn via non-convertible debentures in FY 2022-23 and additionally raised '' 12 bn in Q1 FY 2023-24. GMR Hyderabad International Airport Limited ("GHIAL") has also raised '' 19.9 bn via non-convertible debentures in FY 2022-23.

• Traffic at GMR operational airports (includes Delhi, Hyderabad, Goa, Cebu and Medan airport) - Domestic and International passenger traffic of airports up by 62% YoY and 163% YoY, respectively.

• Domestic Passenger Traffic at Delhi International Airport during the FY 2022-23 increased by 66% YoY from 32.8 Mn to 49.7 Mn., Domestic Passenger Traffic at Hyderabad International Airport during the FY 2022-23 increased by 69% YoY from 11 Mn to 17.6 Mn.

• Delhi and Hyderabad Internatiional Airports expansion works and Crete Airport construction work is progressing as per schedule.

• Delhi International Airport - Overall progress achieved 86.1% as on March 31, 2023 w.r.t expansion project and new arrival terminal at T1 Part A operationalized in February 2023.

• Hyderabad International Airport - Overall progress achieved 85.1% as on March 31, 2023 w.r.t expansion project. East Pier

straight portion commissioned in Q2 FY 2022-23; West Processor (International side) was handed over during Q3 FY 2022-23; West Pier St portion commissioned in Q1 FY 2023-24.

• Land acquisition is at final stages and financial closure is in progress at Bhogapuram Airport. Foundation stone laid by State Chief Minister on May 3, 2023. Tender process for selection of EPC contractor is underway. Pre-cursor to Land handover process; joint survey of land is underway. Financial Closure is underway.

• Hon''ble Supreme Court ("SC") had upheld Bombay High Court''s judgement granting concession rights of Nagpur Airport to GMR. Review Petition was filed by MoCA in SC challenging the SC order. However, the petition was dismissed by the SC in its order dated May 09, 2023. However, we await the conclusion of all legal processes and execution of necessary concession agreement.

• Crete airport (Greece) Project is fully funded mainly through state grant which is already received. It is a debt free Project. Overall progress of about 20% was achieved as of March 31, 2023. Terminal building foundation works completed. Work progressing on multiple fronts - departure bridge, roads, water station building and police building etc.

Financial results - FY 2022-23

a) Consolidated financial results

(? in crore)

Particulars

March 31,2023

March 31, 2022

Continuing operations

Income

Revenue from operations

6,693.40

4,600.72

Other income

595.59

358.44

Total Income

7,288.99

4,959.16

Expenses

Revenue share paid/ payable to concessionaire grantors

1,914.72

224.02

Operating and other administrative expenditure

3,054.89

2,274.13

Depreciation and amortization expenses

1,042.44

889.40

Finance costs

2,343.11

2,018.66

Total expenses

8,355.16

5,406.21

Loss before share of net loss of investments accounted for using equity method, exceptional items and tax from continuing operations

(1,066.17)

(447.05)

Share of profit of investments accounted for using equity method

85.97

70.70

Loss before exceptional items and tax from continuing operations

(980.20)

(376.35)

Exceptional items

254.34

(388.26)

Loss before tax from continuing operations

(725.86)

(764.61)

Tax expenses/(income)

114.07

(12.30)

Loss after tax from continuing operations (i)

(839.93)

(752.31)

(? in crore)

Particulars

March 31,2023

March 31, 2022

EBITDA from continuing operations

1,723.79

2,102.57

(Sales/income from operations - Revenue share - operating and other admin expenses)

Discontinued operations

Loss from discontinued operations before tax expenses

-

(318.33)

Tax expenses

-

60.75

Loss after tax from discontinued operations (ii)

-

(379.08)

Total loss after tax for the year (A) (i ii)

(839.93)

(1,131.39)

Other comprehensive income from continuing operations

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations

(180.07)

(101.29)

Net movement on cash flow hedges

(450.71)

(370.00)

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement loss on post employment defined benefit plans (net of taxes)

(4.84)

(1.80)

Other comprehensive income for the year from continuing operations, net of tax (B)

(635.62)

(473.09)

Other comprehensive income from discontinued operations

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations

-

17.57

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement loss on post employment defined benefit plans (net of taxes)

-

(0.57)

Other comprehensive income for the year from discontinued operations, net of tax (C)

-

17.00

Other comprehensive income for the year (D = B C)

(635.62)

(456.09)

Total comprehensive income for the year, net of tax (A D)

(1,475.55)

(1,587.48)

Loss for the year attributable to

(839.93)

(1,131.39)

a) Equity holders of the parent

(179.26)

(1,023.29)

b) Non-controlling interests

(660.67)

(108.10)

Total comprehensive income attributable to

(1,475.55)

(1,587.48)

a) Equity holders of the parent

(459.38)

(1,226.89)

b) Non-controlling interests

(1,016.17)

(360.59)

Earnings per equity share (?) from continuing operations

(0.30)

(0.98)

Earnings per equity share (?) from discontinued operations

-

(0.72)

Earnings per equity share (?) from continuing and discontinued operations

(0.30)

(1.70)

The revenue increased by 45.49% from '' 4,600.72 crore in FY 2021-22 to '' 6,693.40 crore in FY 2022-23 mainly due to an increase in aeronautical, duty free, retails, advertisement, ground handling, hospitality, and parking revenue on account of increase in traffic and business on significant recovery in demand for air travel with removal of restrictions on inter-state and international travel, relaxations by the State Governments, increase in the vaccination drive.

The revenue share paid / payable to concessionaire grantors was lower in FY 2021-22 on account of Annual Fee/ Monthly Annual fee (MAF) waiver. The Group invoked Force Majeure post outbreak of COVID-19 "A Pandemic" as provided under Article 16 of Operation Management and Development Agreement (OMDA) and claimed that it would not be in a position to perform its obligation to prepare Business Plan and pay Annual Fee/ Monthly Annual fee to Airports Authority of India (AAI). However, during FY 2022-23, there is significant improvement in business operations resulting increase in revenue share paid /payable.

b) Standalone financial results (? in crore)

Particulars

March 31,2023

March 31, 2022

Continuing operations

Revenue from operations

64.47

21.33

Other operating income

37.47

17.73

Other income

24.15

1.00

Operating and other administrative expenditure

120.44

43.97

Depreciation and amortization expenses

0.35

0.91

Finance costs

116.30

78.98

Loss before exceptional items and tax from continuing operations

(111.00)

(83.80)

Exceptional items

120.57

(16.79)

Profit/ (loss) before tax from continuing operations

9.57

(100.59)

Tax expenses

-

58.72

Profit/ (loss) after tax from continuing operations (i)

9.57

(159.31)

Discontinued operations

Loss from discontinued operations before tax expenses

-

(150.47)

Tax expenses

-

-

Loss after tax from discontinued operations (ii)

-

(150.47)

Profit/ (loss) after tax for the year (i ii)

9.57

(309.78)

Net surplus in the statement of profit and loss - balance as per last financial statements

3,454.49

2,122.60

Re-measurement gains on defined benefit plans (net of taxes)

(0.20)

(0.62)

Transfer from fair valuation through other comprehensive income (''FVTOCI'')

-

1,674.97

Transfer on account of composite scheme of arrangement

-

(32.68)

Surplus available for appropriation

3,463.86

3,454.49

Appropriations

-

-

Net surplus in the statement of profit or loss

3,463.86

3,454.49

Earnings per equity share (?) from continuing operations

0.02

(0.26)

Earnings per equity share (?) from discontinued operations

-

(0.25)

Earnings per equity share (?) from continuing and discontinued operations

0.02

(0.51)

The revenue increased by 160.98% from '' 39.06 crore in FY 2021-22 to '' 101.94 crore in FY 2022-23 mainly due to an increase in interest income on loan given to Group companies and management services.

Exceptional items comprises reversal/ (provision) for impairment in carrying value of investments, loans/ advances/ other receivables carried at amortised cost (net)

There are no material changes or commitments except those already disclosed in this report, affecting the financial position of the company which have occurred between the end of the FY 2022-23 and the date of this report.

Dividend

Your Directors have not recommended any dividend on equity shares for FY 2022-23.

Management Discussion and Analysis Report (MDA)

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Management''s Discussion and Analysis is set out in this Annual Report.

State of Affairs of the Company and its Subsidiaries

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

Composite Scheme of Amalgamation and Arrangement

The Board at its meeting held on March 19, 2023, approved the Composite Scheme of Amalgamation and Arrangement amongst GMR Airports Infrastructure Limited ("GIL/Company"), GMR Airports Limited ("GAL"), a subsidiary of the Company and GMR Infra Developers Limited ("GIDL"), a wholly owned subsidiary of the Company and their respective shareholders and creditors ("Scheme"), which, inter-alia, proposes to merge and consolidate the businesses of: (i) GAL into and with GIDL; and (ii) the merged GIDL into and with the Company in each case , on a going concern basis subject to the requisite approval of the shareholders and creditors of the Company, the National Company Law Tribunal ("NCLT"), and other approvals as may be required.

The Company has received the No Observation Letter ("NOC") from the stock exchanges for the Scheme. The NOC from the Reserve Bank of India has also been received for the Scheme.

The proposed Merger has also been approved by the Competition Commission of India ("CCI") under Green Channel route.

The major reserves of the Company on standalone basis for FY 202223 and the previous year is as follows:

(? in crore]

Particulars

March 31, 2023

March 31, 2022

General reserve

174.56

174.56

Surplus in statement of profit and loss

3,463.86

3,454.49

Capital reserve

141.75

141.75

Foreign currency monetary translation reserve (''FCMTR'')

(33.80)

(20.21)

Fair valuation through other comprehensive income (''FVTOCI'') reserve

17,093.60

6,037.65

Equity component of foreign currency convertible bond (''FCCB'')

479.35

-

Total

21,319.32

9,788.24

The Company''s airport business comprises of six operating airports viz., Delhi International Airport, Hyderabad International Airport, Goa Airport at Mopa & Bidar Airport at Karnataka in India, Mactan Cebu International Airport in Philippines and Kualanamu International Airport in Medan, Indonesia. Further one asset is under construction viz., Crete International Airport in Greece. Also, post signing of the Bhogapuram International Airport (new Vishakhapatnam Airport) concession agreement in June 2020, the Company has been working on various preparatory activities even as the authorities seek clearances to meet their obligations for initiating the construction work. The foundation stone of the project has been laid and joint survey of land is underway.

GMR Group is actively pursuing opportunities for new airports as and when they arise. We are actively tracking the next round of regional airports being privatized by the Government of India. On the international front, in the near future, the Group is strategically focusing on opportunities in South and Southeast Asia and the Middle East. We recently started operations at the brown field Kualanamu International Airport in Medan, Indonesia in a joint venture with Indonesian government entity, Angkasa Pura II. This development will further open a path for us to expand in one of the fastest growing aviation markets, i.e. Indonesia. The Group also continues to legally pursue the right to develop Nagpur Airport.

We also continue to explore opportunities in Africa and Central & Eastern Europe. GMR Airports is looking to drive growth not only through Airport Concessions, but also through provision of airport related services including EPC, Project Management, Engineering & Maintenance, Duty Free, Cargo, other non-aero concessions etc.

FY 2022-23 was marked by an impressive post-pandemic traffic recovery. As the COVID waves across the world receded, most of the countries rationalized and then removed travel restrictions. India being a large domestic market, recovered faster than other geographies. By the end of the year FY 2022-23, domestic traffic rose to well above pre-COVID levels. International traffic also exhibited a strong and robust recovery and is expected to surpass pre-COVID levels by FY 2023-24. During this challenging period, both airports and the airlines have evolved to be more operationally flexible to deal with abrupt changes in business scenario and regulations. Given this robust recovery, the sector has seen renewed investments to cope with rising demand.

Various new airlines came up and existing ones started to resume with capacity expansion initiatives.

An overview of the operations at our assets during the year is briefly given below:

Delhi International Airport Limited (DIAL)

DIAL is a subsidiary of the Company and its shareholding comprises

of GMR Airports Limited ("GAL") (64%), Airports Authority of India (AAI) (26%) and Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL entered into a long-term agreement to operate, manage and develop the Delhi International Airport.

Highlights of FY 2022-23:

FY 2022-23 was the first fiscal year post onset of Covid-19 where Indian Aviation Sector did not face any major disruptions from Covid-19 and exhibited tremendous recovery in passenger traffic throughout the FY.

During the year we had unrestricted scheduled operation for domestic and international movement. While in FY 2022-23, Delhi International Airport domestic traffic reached pre-COVID level, International traffic recovered to about 88% of pre-COVID level by fiscal year end. Cargo volume recovery was lower and remained below pre-COVID levels in FY 2022-23.

Throughout the year, DIAL proactively engaged with all stakeholders in pushing passenger growth through various passenger experience initiatives. One such major initiative was the launch of DigiYatra which is a path-breaking solution for passenger processing by the use of facial recognition technology.

Operational Performance:

DIAL witnessed significant growth of traffic at Delhi International in FY 2022-23. Passenger traffic at Delhi International was 65.3 mn in FY 2022-23, a growth of 66.1% over previous year with 140.0% growth in international traffic and 51.4% growth in domestic traffic. During the year, Delhi International Airport handled 429,964 Air Traffic Movements (ATMs) and clocked 0.90 MMT cargo volume. Cargo volumes experienced an overall de-growth of 3.1% over previous year, driven by 8.7% de-growth in international cargo. Intermittent lockdown in China, higher inflation in US and Europe and supply chain disruption due to Russia-Ukraine war were key factors which led degrowth in cargo tonnage in the fiscal year. Domestic cargo on the other hand grew by 7.5%.

Hon''ble Minister of Civil Aviation kicked off DigiYatra (a contactless biometric passenger processing platform) at Delhi International Airport on December 01, 2022. DIAL has deployed DigiYatra infrastructure across all the touch points in Terminal 3 & Terminal 2 at Delhi International Airport, New Delhi.

DIAL''s focus on operational excellence and customer experience backed by a strong organizational culture has helped sustain its leadership position in Airport Service Quality. As a result, DIAL was once again recognized as the Best Airport for service quality in the region by ACI and Best Airport in South Asia by Skytrax. Delhi International Airport has improved its world ranking to 36 and is the only Indian airport among Top 40 airports in the world Skytrax ranking.

Despite operational and logistical challenges thrown by the pandemic during past couple of years, DIAL continued to focus on its expansion plan of airside infrastructure and terminal capacity as per the approved Major Development Plan in order to cater to the future growth in passenger and air traffic. The Phase 3A expansion includes, among others, expansion of Terminal 1 and Terminal 3, construction of a fourth runway along with enhancement of airfields and construction of taxiways, which will expand capacity of Delhi International Airport to 100 Mn passengers annually. Cumulative physical progress on phase 3A expansion as on March 31, 2023 is ~86%. As part of phase 3A, all work related to dual elevated Eastern Cross Taxiways (ECT) and 4th runway have been completed. All balance works are expected to be completed and commissioned during FY 2023-24.

Awards and Accolades of FY 2022-23

• Delhi International Airport has once again emerged as Best Airport in the ''over 40 million passengers per annum (MPPA)'' category in Asia Pacific region by ACI in the Airport Service Quality Programme (ASQ) for the 5th time in a row in 2022 rankings.

• In the newest category in ACI ASQ award, DIAL has been bestowed with ''Cleanest Airport'' in the Asia Pacific region award

• Delhi International Airport has been voted as Best Airport in India / South Asia for 5th consecutive years in Skytrax ranking.

• In terms of Skytrax world airports ranking, Delhi International Airport jumped from rank 50 in 2020 to 45th in 2021 and further to current rank of 36.

• Delhi International Airport was conferred ''Best Airport'' in the country in the ASSOCHAM''s 14th International Conference cum Awards on Civil Aviation

Sustainability Focus

DIAL always has a strong focus on Sustainability and has received various awards and accolades in this regard for many years now:

• "Green Airports Recongnition" by ACI- Asia Pacific in 5 years in a row (2023, 2021, 2020, 2019, 2018 and 2017).

• National Award for Excellence in Energy Management from the Confederation of Indian Industry (CII), in the year (2022, 2021, 2020, 2019 and 2018.

• Wings India Environment & Sustainability Award 2022.

• FICCI Water Award in 2022.

• For its operational usage, DIAL is switching to Electric Vehicles from the current conventional vehicles in phase wise manner.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a subsidiary of the Company and its shareholding comprises of GAL (63%), AAI (13%), Government of Telangana (13%) and MAHB (Mauritius) Private Limited (11%) and has a long-term agreement to operate, manage and develop the Hyderabad International Airport.

Highlights of FY 2022-23:

With the effects of COVID-19 decreasing across the globe, India lifted all restrictions on international air travel from the end of March 2022.

During the first quarter of FY 2022-23, an increase in COVID-19 cases raised concerns of a 4th Wave but no significant impact was felt on air traffic. No fresh restrictions were imposed by the Government of India which helped air traffic to slowly climb back to near pre-COVID numbers.

The India aviation industry was constrained by the available capacity of aircrafts as airlines had to ground some aircrafts due to maintenance issues arising out of lack of availability of spare parts, partly due to Russia-Ukraine crisis. Also, Pratt & Whitney had not made available the required engines for aircrafts for some of the airlines, which also affected the aircrafts availability. Over 75 aircrafts were grounded in the year, which accounts for 10-12% of Indian fleet. This resulted in demand outstripping the supply of aircrafts and led to increase in ticket pricing and slower growth of traffic. As a result, Domestic traffic was lower as compared with the estimated figures for the year. However, international traffic remained robust and the final total traffic figure for FY 2022-23 was 21.00 million passengers.

Operational Performance:

During the FY, Hyderabad International Airport handled 21.00 million passengers, over 1,60,597 Air Traffic Movements ("ATMs") and more than 1,42,338 Metric Tonnes ("MTs") of Cargo. On a year-on-year basis, passenger movements and ATMs witnessed a growth of 69% and 40%, respectively. Cargo witnessed around 2% YoY growth.

By end of the year, Hyderabad International Airport was connected to 66 domestic destinations as compared to pre-COVID level of 55 domestic destinations and 18 international destinations as compared to 16 pre-COVID destinations. A key route addition was the Goa Airport at Mopa. A few domestic routes were lost due to internal issues of the airlines, with some routes being temporarily stopped.

Some new international routes which were started during the year:

• Dhaka by IndiGo

• Baghdad by Fly Baghdad

• Don Mueang by Nok Air

The following new airlines commenced operations from Hyderabad during the year:

• Kuwait Airways

• Nok Air

• Fly Baghdad

• Akasa Air

Medical tourism was leveraged to start operations to Dhaka and Baghdad but at the same time destinations like Chicago and Male were stopped due to unviability.

On the Cargo front, Amazon started, for the first time in India, Prime Air (Quikjet) weekly cargo operations from Hyderabad International Airport. Lufthansa resumed its Boeing 77F freighter with routing FRA-BOM-HYD-FRA. During February 2023, Hyderabad hosted the first-ever E-Prix in the country with Hyderabad International Airport playing an integral part in transporting these E-vehicles by operating 6 charter flights carrying them.

Capacity augmentation initiatives FY 2022-23

As part of the expansion works, further progress was made during the year. On airside, various taxiways and passenger boarding bridge (PBB) stands were commissioned. At Passenger Terminal Building (PTB), straight portion of east pier and some levels of west processor were opened for operations. Overall, by March 2023 ~85% of airport expansion works were completed. The balance works are expected to be completed and commissioned by FY 2023-24.

Passenger Experience initiatives FY 2022-23

Continuing with our relentless focus to offer the best possible service quality and passenger experience and achieve world-class levels of operational efficiency, several new milestones were attained during the year.

• Hyderabad International Airport Environment Compliance Oversight Committee was established and organized its first meeting with GHIAL''s subsidiaries and other stakeholder to discuss environmental compliance status

• Hajj operations re-started post COVID-19

• Soft launch of DigiYatra commenced on August 18, 2022 at Entry and PESC

• 16 AEDs (Automated External Defibrillator) were installed at various locations in PTB on December 25, 2022

• India''s largest Arrival Duty Free store inaugurated at International Arrivals

Hyderabad International Airport also focuses on creating and delivering a well-rounded shopping, retail and commercial services experience for the passengers and visitors, which in turn provides a strong and fast-growing source of revenues for the airport. Few such initiatives include:

• Music curation has been done exclusively for Hyderabad International Airport, which plays instrumental music as per different times of the day.

• The check-in hall & all the washrooms in the terminal installed with natural fragrances

• Consultant Chef appointed to enhance the gastronomic experience for passengers/customers at the Airport

• Trials for DigiYatra underway at Hyderabad International Airport

• Trials for real time passenger feedback kiosks has been completed and will be rolled out in FY 2023-24

• Pillar numbering for arrival forecourt was initiated

• Standardised signages at car park, main access road and forecourts in process.

Awards and Accolades• Ranked 65th at the 2023 Skytrax World Airport Award,

winner of:

• Best Regional Airport in India and South Asia

• Best Airport in India and South Asia

• Winner of the 2022 Airport Service Quality (ASQ) Award for

Best Airport of 15 to 25 Million Passengers in Asia-Pacific

• Received Platinum Award in 11th National CII POKA YOKE 2022 competition

• Won Gold Recognition at the CII Excellence Summit for its Business Excellence journey

• Winner of the "Airport with the best use of Technology" at ASSOCHAM''s 14th Civil Aviation Conference

• Received ACI World''s ''Voice of Customer'' Recognition for the 2nd time in a row in 2022.

Sustainability Focus

GHIAL has always had a strong focus on Sustainability and has received various awards and accolades in this regard for many years now:

• Received the ACI Green Airport recognition 2022 - Silver for the Best Carbon emission Management

• Won the CII National Awards For "National Energy Leader" & "Excellent Energy Efficient Unit" Categories

• ~ 20 vehicles converted to Electric to reduce the Carbon footprint

• >80% conversion to LED lights across the Terminal

• Single-use plastic banned with effect from July 01, 2022

• Opened a biodiesel fuel station

• Set up EV charging stations at the airport

In addition to the above, some of the continuing best environment practices include:

• LEED certified Terminal Building which allows maximum natural

lighting, and other features that enable optimal use of energy and water.

• Effective implementation of the "Reduce-Reuse-Recycle" principle in the overall water usage within the airport.

• Efficient rainwater harvesting and ground water recharging processes.

• Efficient solid waste management processes and compost generation to meet 100% internal demands to develop a beautiful landscape within the airport precincts.

• Robust process to effectively reduce aircraft noise & emission levels by collaboratively engaging with airline operators and Air Traffic Service providers to bring in best practices like single engine taxi, Fixed Electrical Ground Power to reduce use of aircraft Auxiliary Power Units (APU), Continuous Descent Approach Operations, etc.

GMR Goa International Airport Limited (GGIAL)

GGIAL declared Commercial Operations Date (COD) on December 07, 2022 and started its domestic commercial operations on January 05, 2023. During the year, GGIAL joined hands with the National Infrastructure Investment Fund (NIIF), who have invested '' 631 crores in GMR Goa International Airport Limited in the form of Compulsory Convertible Debentures (CCD).

Post start of operations, the airport achieved 1 million passengers mark on April 30, 2023. The airport currently handles around 75 ATMs per day with peak hour capacity of 13 ATMs. During Q1 of FY 202324, the airport handled 968k Domestic Passengers and 6467 ATMs. Further, with necessary approvals from governments and relevant agencies in-place, the airport launched international operations in July 2023. Considering, growing demand from airlines and high passenger footfall, we are already planning expansion in the terminal capacity from the existing 4.4 MPPA to 7.7 MPPA.

Airport Economic Regulatory Authority (AERA) extended the validity of Ad hoc tariff order released in August 2022 till September 2023. The final order for MYTP is expected during Q2 FY 2023-24.

The construction works for 6-lane expressway connecting NH 66 to the Airport is in full swing at multiple locations and is likely to be operational by March 2024. Upon completion, the expressway will provide a seamless transition for passengers to and from the airport.

Sustainability Focus

Sustainability as one of core concepts, Goa Airport at Mopa is designed to remain "Green Airport" by design itself. GGIAL has received various awards and accolades in this regard:

• Indian Green Building Council (IGBC) Platinum level Certification for New Building

• "Construction Health, Safety & Environment" Achievement

Award and "Best Construction Project" from Construction Industry Development Council, under Planning Commission, NITI Aayog, GoI during 14th Vishwakarma Awards 2023, New Delhi (April 12, 2023)

• 21st Annual Greentech Safety Award 2023 under ''Construction Safety'' category by Greentech Foundation, New Delhi (May 29, 2023)

• ''Plaque of Excellence'' in recognition of "Best Environmental Practices" from Goa State Pollution Control Board, GoG on the occasion of World Environment Day, June 05, 2023.

• Various initiatives under our "5 Years Road Map of Carbon Neutrality Level 3 Program" viz., installation, commissioning of 5 MW onsite solar power generation unit as renewable energy, EV buses and EV ground equipment by ground handling agency, etc.

• Across the entire airport, 100% LED lighting system have been adopted in all Buildings and Airfield Ground Lighting (AGL) systems, facilitating Energy Conservation.

• To reduce Green House Gas (GHG) Emissions from Auxiliary Power Units (APUs) of Aircrafts, Bridge Mounted Equipment (BME) with Fixed electrical ground power (FEGP) & PreConditioned Air Supply (PCA) systems provided.

• Rainwater Harvesting and Ground Water Recharge executed as per approval of Water Resources Department, Government of Goa.

• 100% of treated Sewage Treated Plant (STP) water will be reused for Cooling Tower make-up, toilet flushing through dual plumbing system and irrigation for horticultural purposes making the Airport a Zero Liquid Discharge Unit.

• 500 nos. indigenous trees transplanted within the project site

• About 165 Acre of land with existing tree cover left undisturbed within project site.

• As a part of compensatory tree afforestation plan, 5 Lac Tree Saplings have already been planted in and around the airport project site within Goa State through Goa State Bio-diversity Board (GSBB), GoG.

• ''Integrated Waste Management Plan'' (approved by Goa State Pollution Control Board, GoG) in place through dedicated agency and infrastructure.

• Single-use plastic banned with effect from July 01, 2022.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC, a JV between GMR group (40%) and Megawide Corporation

(60%), entered into a concession agreement with Mactan Cebu

International Airport Authority for development and operation of

Mactan-Cebu International Airport (Cebu Airport) for 25 years. GMCAC took operational responsibility of the airport in November 2014, and has been successfully operating the airport, since then.

On December 16, 2022, GMR Group and Megawide Corporation entered into a Deed of Assignment with Aboitiz Infracapital, Inc. (AIC), as a consequence of which, as of December 31, 2022, GMCAC is owned 33 1/3% each by MCC, GMR and AIC. Further, as per the agreement, GMR will continue to operate the airport as a technical services provider till December 2026.

Highlights of FY 2022-23:

The impact of COVID-19 pandemic continued in CY2022 also, but the recovery of traffic has gained momentum. The passenger footfall for CY2022 was recorded at ~5.5 Mn, consisting of 4.8Mn Domestic passengers and ~0.7 Mn International passengers, witnessing a 420% growth from ~1.3Mn overall traffic in CY2021. The total traffic has recovered to 44% of pre-pandemic levels.

In line with our strategy to churn assets and redeploy capital in high growth opportunities, GMR Airports International BV (GAIBV), a stepdown subsidiary of the Company holding stake in GMCAC has entered into a transaction with Aboitiz InfraCapital Inc (AIC) on December 16, 2022, for sale of stake. However, we would continue to remain a 33% shareholder until September 2024 and also operate as a technical services provider to GMCAC until December 2026 and would also be entitled to additional deferred consideration based on the performance of GMCAC for the period between 2023 and 2026. Further details on GMCAC are provided in MDA forming part of this report.

Medan Airport

GMR participated in a bid via GMR Airports Limited and its step-down subsidiaries for managing, developing and improving the performance of Kualanamu International Airport which was held by Angkasa Pura II (APII). GMR was awarded the contract in November 2021 and it entered into a strategic partnership with APII. GMR now holds 49% stake in the project SPV. With the award of this contract, GMR became the first Indian airport operator to win a bid to develop and operate an Indonesian Airport. The SPV took charge of Commercial Operations on July 7, 2022.

Highlights of FY 2022-23:

Medan Airport was able to achieve several notable achievements as well as service improvements. After the takeover, there was a significant increase in the domestic passenger service charge (PSC) by 27% and the international PSC by 16%, leading to a positive financial impact and growth for the airport. In 2022, more than 75% of the routes that were operational in 2019 have been restored, showcasing a successful recovery from the impact of pandemic. Traffic reached 5.9 Mn in CY 2022, which is 72% of the 2019 traffic.

The excellence of Medan Airport was acknowledged when it was shortlisted for the prestigious Routes Asia award. Furthermore, management has been able to attract new routes with Qatar Airways announcing a flight between Qatar and Medan in January 2024 and Batik Air has scheduled direct flights to Chennai in August 2023. These new routes will enhance connectivity and open opportunities for travelers. Airlines have also increased frequencies on the existing routes and new airlines have also started operating on existing routes.

In terms of service improvements, Kualanamu International Airport has focused on enhancing the passenger experience. The terminal underwent a thorough deep internal and external cleaning, ensuring a clean and pleasant environment. Targeted improvements were implemented to enhance the Umrah passenger experience, catering to the specific needs of this group. Furthermore, refurbishment of the toll gate and the removal of obsolete infrastructure was carried out, creating additional space and improving overall functionality.

Operational improvements have also been prioritized. The airport increased its security staff to enhance the terminal''s passenger handling capacity and ensure a safe environment. Additional trolley management staff were employed for repairs and regular maintenance, and Critical equipment repairs have been completed, ensuring smooth operations and minimizing disruptions.

Safety and security remain paramount at Kualanamu International Airport. The completion of the Emergency Exercise and Security Exercise, along with mandatory training for ARFF (Aircraft Rescue and Firefighting) personnel reflects the airport''s commitment to maintaining high safety standards and preparedness in emergencies.

Medan Airport is also gearing up for an Immediate Capacity Augmentation phase in 2023. This strategic initiative aims to increase the terminal capacity from the current 10 million passengers to 15 million passengers. The company has recognized the need for expansion due to the growing demand and is in the final stages of securing the funding required to execute this project.

Crete International Airport

GMR Airports and its Greek partner, TERNA, signed a concession agreement with the Greek State for design, construction, financing, operation, maintenance of the new international airport of Heraklion at Crete in Greece. The concession period is 35 years including the design and construction phase of five years. Concession commenced on February 6, 2020. With the award of this contract, GMR became the first Indian airport operator to win a bid to develop and operate a European airport. This is also GMR Group''s first foray into the European Union region.

Highlights of FY 2022-23:

Overall construction progress of the airport is ~20 %. During the year, concreting works of the terminal building commenced. Concreting works of Basement slab and lower mezzanine slab of

terminal building have been completed, while arrival slab concreting works are in progress. Major part of laying and compaction of base and sub-base for Apron area was completed during the year and lean concrete paving works are in progress. Laying of compaction of Base is progressing well at Runway & Taxiway sites.

The EPC contractor has requested an extension of the construction timeline by 24 months due to changes in design suggested by State Advisors and COVID related delays. The state has approved the extension of COD to February 06, 2027 and has also agreed to fund an additional EPC claim of Euro 104.9 MN.

Airport Adjacencies

GAL has emerged as a strong platform for both India and International concessions. As part of our Airport Platform strategy, we have initiated the journey to build strong portfolios of adjacency businesses under GAL given our experience of more than one and half decade in the Airports services value chain.

We achieved instant success as GAL was awarded the concession for Kannur Duty Free in February 2021, amidst the challenges associated due to the COVID pandemic.

GAL is actively pursuing Non-Aero Master Concession opportunities. Under the Master Concession contract, often various non-Aero services are bundled together including duty free & retail, car park, advertising, F&B and lounges. There has been a noticeable shift at various airports towards the master concession model due to its benefits both to the Airport and the concessionaire and GAL would look to leverage this opportunity.

As a testament to our strong focus and efforts, GAL operationalized various Non-Aero services at Goa Airport at Mopa simultaneously to the commissioning of the Airport. Duty free operations also began along with the International operations in July 2023.

To strengthen its focus on hospitality, GAL formalized an F&B Joint Venture business with India''s leading F&B operator. The joint venture ''GMR Hospitality Limited'' (''GHL'') took over F&B operations at Goa Airport at Mopa.

GAL also acquired the license to develop and operate the cargo terminal services at Goa Airport at Mopa. The state-of-the-art cargo facility will be ready & operationalized by Q2 FY 2023-24 in sync with the beginning of the international operations. GAL initiated the domestic cargo handling and processing through an interim terminal along with the Airports commencement date.

During the year, GAL was awarded the Non-Aero Master Concession of GMR Hyderabad International Airport Limited (''GHIAL''). The concession entails Retail, Duty Free and Retail related services.

In addition, we are currently evaluating multiple opportunities in the cargo, duty free and services business across our focus geographies and believe that in the short to medium term we will have more

adjacency businesses to add to our overall portfolio. For example, on the International front, GAL was amongst the 13 successful applicants who were qualified for the world''s biggest duty-free tender in Spain.

Airport Land Development (ALD)

FY 2022-23 has been a breakthrough year for ALD with topline revenue from various Airport Land Development Businesses touching ~ '' 610 Crore. Several marquee transactions were concluded at both Delhi and Hyderabad. Simultaneously development of key investment projects were initiated, notably DIAL''s self-development project of a prestigious commercial office development, which was initiated in the year. Given the nature and expanse of ALD works, the team has developed capability in all streams of the project development cycle. The sale transaction of Amazon warehousing assets at Aerocity Hyderabad has demonstrated ALD''s capability to recycle capital and has established the important precedence that leased land can also be monetized.

Aerocity Delhi

On the transaction side, DIAL completed the international competitive bidding process and awarded to Chalet Hotels Limited (CHL) the right to develop a Hotel at the Terminal-3 of Delhi International Airport. CHL is an owner, developer, and asset manager of high-end hotels in key metro cities of India and is also listed on Indian stock exchanges. The upcoming terminal hotel will have ~350-400 rooms along with other amenities matching standards of international airport terminal hotels. The transaction has been done through an innovative structure whereby DIAL shall develop and deliver the cold shell and CHL shall complete the interiors and other fit outs and operate the Hotel while paying Revenue Share to DIAL subject to a Minimum Guaranteed License Fees. The hotel is expected to be commissioned by FY 202526.

During FY 2022-23, as a significant step towards creating portfolio of investment projects, DIAL initiated the development of a commercial building of approx. 6 Lakh sft. gross leasable area in the Gateway District of Aerocity. The proposed building is envisaged as a Ground 6 floors building and will have 3 basements. The commercial building will host multi-tenanted offices, corporate amenities and ancillary retail and F&B. The building is expected to be completed in FY 2025-26. Construction works were initiated in the month of March 2023.

In addition, Airbus awarded the EPC contract to GAL for construction of their headquarters and training center at the Terminal District, Near MLCP, Opposite Terminal -3 in May 2022. The facility will be built on a 1.1 acre land parcel and is expected to be completed in 15 months.

Further, pre-construction activities including design & planning commenced for the various construction projects including Terminal Hotel, GA Annex, which are proposed to be undertaken during FY

2022- 23 and FY 2023-24.

The infrastructure development works at the two new districts -Gateway & Downtown Districts of Aerocity Delhi have also gathered momentum as the development works for the Office & Integrated Retail developments being done by Bharti Realty led consortiums are progressing.

In the existing operational Hospitality District, the activation of the GMR Square was fully revived post pandemic with continued focus on the digital marketing including Aerocity Live magazine, Social media handles on Facebook, LinkedIn and Instagram. Additionally new Retail areas with best-in class Indian brands were added to GMR Square to add to the world class experience offered for global and domestic visitors to GMR Aerocity.

Aerocity Delhi operations received ISO certification for environment and energy management in FY 2022-23.

Aerocity Hyderabad

The year under review has been a successful year for Hyderabad ALD. Notable transactions, both land lease and Build To Suit (BTS), were executed.

As a testament to ALD''s capability in recycling of capital deployed on projects, the sale transaction of Amazon warehousing facilities was concluded with CPPIB backed Indospace Core Ventures. The transaction generated value of '' 188 crore. The on-ground handover of the facilities is expected to close in Q1 FY 2023-24.

GMR Hyderabad Aerospace & SEZ Ltd (GHASL) leased 7.18 acres land in the non-processing area of the SEZ to M/s Amara Raja Batteries Ltd for setting up a Research and Development Innovation Centre. GHASL also executed Agreement To Lease (ATL) with Schneider Electric Pvt. Ltd (SEPL) for Lease of Build to Suit facility of approx.

3.80.000 sqft in two phases on approx. 18 acres of land; Phase 1 is approx. 2,10,000 sqft and Phase 2 is 1,70,000 sqft. The ATL executed by GHASL with Skyroot Aerospace was amended revising the area of the BTS facility for assembly of small satellite launch vehicles from

24.000 sqft to 56,000 sqft and facility will be handed over in Q2 FY

2023- 24. Safran announced the setting up of Engine MRO in the SEZ land on 23.5 acres and signed land lease agreement with GHASL.

In line with its strategy to build businesses at GAL, it has been targeting EPC business for ALD related projects within the group. Accordingly, GAL was awarded the Design & Build Contract from GHASL for the construction of the Schneider facility at an award value of '' 49 Crore. GAL was also awarded the EPC contract for the Safran MRO facility at an award value of '' 236 crore. The EPC contract in GAL for 1 million sqft of warehousing facility with ESR GMR Logistics Park Pvt. Ltd (GLPPL) with contract value of '' 265 crores was completed and handed over in Q4 FY 2022-23.

Safran Aircraft Engines project received Industrial Project of the Year Award at Realty Plus South Conclave 2022. This project also received

Edge Certification from IFC for inclusion of Green Building elements in design and construction.

GMR Hyderabad Aerotropolis Ltd (GHAL) executed lease deed with Amity for the lease of 20 acres land for setting up University at Aerocity Hyderabad. Substantial leasing of Tower-2 was completed with renowned tenants including HDFC Bank, Speed Infra, Skycell, APFT and SGD Pharma. Food Court at Tower 2 also commenced operations.

The destination Retail project i.e. Interchange saw pre-leasing LOIs signed with RBL bank, Best Sellers, Specta Eyewear, Third Culture Care, Kamal Watch Co, Punjab Grill etc.

FY 2022-23 also marked a breakthrough year for the Novotel Hotel with its highest ever top line of '' 85 Crores despite being under renovation.

In addition to above mentioned major transactions, we continue to strengthen the AeroCity Hyderabad Brand further with effective Social Media marketing through purely organic efforts. We have already achieved 4000 B2B followers on LinkedIn.

Aerocity Goa

ALD submitted the City Side Development Plan to Government of Goa for approval. Terminal District comprising of approx. 23 acres has been identified as the first target area for monetization and will comprise of hotel, convention centre and retail areas. The first set of monetization for hotel development on 2 plots is expected to take place during first half of FY 2023-24.

Raxa Security Services Limited (RAXA)

Raxa, a pioneer in providing security services, with ISO 9001:2015, ISO 18788:2015, ISO 29993:2017 and ISO 45001:2018 certifications, is the security arm of GMR Group. Raxa was established in the year 2005 to take care of the security of the assets of national importance that the Group has created. Since 2011, apart from providing security to GMR Group assets, the company has also been providing its service to other reputed external clients. Its portfolio of clients includes renowned companies in Aviation, Manufacturing, Pharmaceutical, IT, Hospitality & Educational sectors as well as Government establishments.

Currently, Raxa employs more than 8,000 security personnel. During the year, Raxa bagged contracts from a large number of premier clients.

Raxa is undoubtedly the only private security company in India that provides high-level security training and has a 5S certified State-of-the-Art training center, called Raxa Academy, spread over a 100-acre campus. The Academy is affiliated to MEPSC (Management & Entrepreneurship and Professional Skills Council) under the NSDC / Ministry of Skill Development and Entrepreneurship and has been accorded the recognition of "Centre of Excellence" in the security sector by MEPSC. It is a center for higher learning in security and

safety and provides both short-term and long-term specialized training for various levels.

Raxa Academy has successfully implemented the Learning Management System for running online courses. During the year, it has started an industry focused Drone Pilot Training course. It also conducted several short duration thematic security courses, including its flagship Corporate Security and Advanced Management Course for senior security professionals as well as Leadership Course.

More than providing man-guarding solutions, Raxa is well known in the industry for its technical security solutions. Raxa''s Technical Division provides integrated technical security solutions with the latest proven technologies either independently or in association with its specialist technology partners. The scope of the solutions includes Access Control, CCTV surveillance, Fire Alarm & Public Address system, Perimeter Intrusion Detection System, Anti-sabotage and Antiterrorism measures, Command & Control Centers, etc.

Raxa has recently established a dedicated cyber division to provide digital security, in addition to physical security. It is the only security company in India that can provide the entire range of security solutions from physical to electronic to cyber security. Together with its highly acclaimed partners, it offers a wide range of cyber solutions.

Leveraging from the expertise of GMR group in aviation and the inherent strength of Raxa in providing security solutions, Raxa has formed a dedicated consultancy division to provide consultancy services, particularly in the aviation sector.

During the year, Raxa has entered into partnership with several specialized technical/ cyber/ Drone security solution providers such as Redinent, Sectona (Cyber) and Skyvenger (Drone business), NASSCOMM, DSCI, Sectona for Cyber solutions to further enhance its security capabilities. It has also established a dedicated fire division to offer end-to-end fire-fighting solutions.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Ind AS 110 -Consolidated Financial Statements read with Ind AS 28 -Investments in Associates and Joint Ventures, the audited consolidated financial statements are provided in the Annual Report.

Holding, Subsidiaries, Associate Companies and Joint Ventures

As on March 31, 2023, the Company has 26 subsidiary companies and 14 associate companies including joint ventures. During the year under review, GMR Hospitality Limited became the subsidiary of the Company. Further, during the year, Globemerchants Inc. became the associate and SSP- Mactan Cebu Corporation (SMCC) and Mactan Travel Retail Group Co. ceased to be associates of the Company.

However after the closure FY 2022-23, GMR Hyderabad Airport

Assets Limited ceased to be the subsidiary of the Company.

The complete list of subsidiary companies and associate companies (including joint ventures) as on March 31, 2023 in terms of the Companies Act, 2013 is provided as "Annexure A" to this Report.

The Policy for determining material subsidiaries may be accessed on the Company''s website at the link:

https://investor.gmrinfra.com/pdf/4 Policy on Material subsidiaries.pdf.

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 as "Annexure- B" to this Report and therefore not reported here to avoid duplication.

The financial statements of the subsidiary companies have also been placed on the website of the Company at https://investor.gmrinfra.com/annual-account-of-subsidaries

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(5) of the Companies Act, 2013:

a) that in the preparation of the annual accounts for the year ended March 31, 2023, 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 no. 2 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, 2023 and of the profit of the Company for the year ended on that date;

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

d) that the annual accounts 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 are operating effectively;

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

Corporate Governance

The Company continues to follow the Business Excellence framework, based on world class Malcolm Baldrige Framework for Performance Excellence which was adopted by GMR Group in the year 2010. With over a decade now, the deployment of the GBEM framework has taken roots in over 15 Group Businesses.

Various Continuous Improvement and Break-Through Innovation initiatives under the umbrella of GBEM have yielded tremendous benefits to various Group Companies in terms of Cost Savings and new avenues for revenue generation. The key initiatives like 5S, Kaizens, Idea Factory, CIPs [Continuous Improvement Projects] and regular BE Assessments have been implemented with lot of rigor and enthusiasm. A Governance Structure is in place along with timely Rewards and Recognitions to GMRites contributing to these initiatives, has helped to grow and sustain these initiatives. 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 this Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the said Report.

Business Responsibility and Sustainability Report

As stipulated under Regulation 34(2)(f) of SEBI LODR, read with Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021 issued by the Securities and Exchange Board of India (SEBI) the Business Responsibility and Sustainability 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 2022-23 with related parties referred in Section 188(1) of the Companies Act, 2013 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 referred in Section 188(1) of the Companies Act, 2013 which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Since all the related party transactions were in ordinary course of business and at arm''s length basis, Form AOC-2 is not applicable.

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website at the link: https:// investor.gmrinfra.com/pdf/Revised GIL Policy on Related Party Transaction-wef Feb 09, 2022-uploaded on website.pdf. Your Directors draw attention of the members to Note no. 31 to the

standalone financial statement which sets out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Policy (CSR Policy), of the Company indicating the activities to be undertaken by the Company, may be accessed on the Company''s website at the link: https://investor.gmrinfra.com/pdf/Amendment to CSR POLICY-GIL(9.08.pdf .

The details of the CSR Committee are provided in the Corporate Governance Report which forms part of this Annual Report

The Company has identified the following focus areas towards the community service / CSR activities, which inter alia include:

• Education

• Health, Hygiene & Sanitation

• Empowerment & Livelihoods

• Community Development

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 under review, 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. However, the Company, through its subsidiaries/ associate companies, spent an amount of '' 18.47 Crores during the year on CSR activities. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Management Discussion and Analysis. The Annual Report on CSR activities is annexed as "Annexure C" to this Report.

Risk Management and Environmental Social and Governance (ESG) journey

The Board of Directors of the Company has a Risk Management Committee which is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has an additional oversight in the area of financial risks and controls. In addition, the updates on Enterprise Risk Management (ERM) activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.

The Company has in place the Risk Management Policy duly approved by the Board of Directors designed to identify, assess and mitigate risks appropriately.

Currently, in opinion of the Board, there are no risks that threaten the existence of the Company. However, details of the risk concerns, threats Identification, assessment, profiling, treatment and monitoring including ESG concerns are covered in MDA

section, which forms part of this Report.

Internal Financial Controls

The Company has put in place policies and procedures including the design, implementation and monitoring of internal controls over its operations to ensure orderly and efficient conduct of its businesses, including adherence to Company''s policies and procedures, safeguarding of assets, prevention and detection of fraud, accuracy and completeness of accounting records and timely preparation of reliable financial disclosures under the Companies Act, 2013.

These controls and processes have been embedded and integrated with SAP and / or other allied IT applications which have been implemented. During the year under review, these controls were reviewed and tested by the Management Assurance Group of the Company. The Statutory Auditors of the Company have also tested the Internal Controls over financial reporting.

There were no reportable material weaknesses observed in the design or operating effectiveness of the controls except in few areas, where the risk has been identified as low and there is a need to further strengthen the controls. Corrective and preventive actions, as appropriate are taken by the respective functions.

Directors and Key Managerial Personnel

During the year under review, Mr. Madhva B. Terdal upon completion of his tenure on August 07, 2022, ceased to be a wholetime Director of the Company and continues to serve as a Nonexecutive & Non-Independent Director of the Company. There were no other changes in the Directors and Key Managerial Personnel of the Company during the year.

In accordance with the provisions of the Companies Act, 2013, the Articles of Association of the Company, Mr. Srinivas Bommidala and Mr. G.B.S Raju, Directors, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Nomination and Remuneration Committee ("NRC") and the Board on the basis of performance evaluation, recommend the re-appointment of Mr. Srinivas Bommidala and Mr. G.B.S Raju as Directors of the Company, liable to retire by rotation.

The Board of Directors at its meeting held on August 14, 2023 had based on the recommendation of the NRC and considering the remarkable contribution of Mr. G.M. Rao in growth of the GMR Group and also considering that it is crucial for the Company to have Mr. G.M. Rao on the Board, had recommended for approval of the shareholders, the continuation of Mr. G.M. Rao as a Director of the Company post attaining the age of 75 years in terms of requirement of Regulation 17(1A) of the SEBI LODR. Mr. G.M. Rao is the founder of the GMR Group. Over the last 4 decades, he has successfully established GMR Group, as one of the most recognized brands in

the country.

In view of his leadership, strategic inputs, management skills, stakeholders'' relationships, governance acumen as well as operational guidance towards the growth of the Company, The Board is of opinion that it is crucial for the Company to have him on the Board.

The brief resumes and other details relating to the directors who are proposed to be appointed/ re-appointed, as required to be disclosed as per the provisions of the SEBI Listing Regulations/Secretarial Standard are given in the Annexure to the Notice of the 27th AGM.

Board Evaluation

Annual performance evaluation of the Board, its Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have 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 criteria such as contribution of the Individual Directors 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.

A senior non-independent Director of the Company also had a one-on-one interaction with the Independent Directors to have further insight on the governance aspects and effectiveness of the Board process.

The Independent Directors at their separate meeting held during the year had also reviewed the performance of the Non-Independent Directors, Chairman and the Board as a whole.

Policy on Directors'' Appointment and Remuneration

The Company has devised a Nomination and Remuneration Policy ("NRC Policy") which inter alia sets out the guiding principles for identifying and ascertaining the integrity, qualification, expertise and experience of the person for the appointment as Director, Key Managerial Personnel (KMP) and Senior Management Personnel. The NRC Policy further sets out guiding principles for the Nomination and Remuneration Committee for determining and recommending to the Board the remuneration of Managerial Personnel, KMP and Senior Management Personnel. There has been no change in the NRC Policy during the year.

The Company''s NRC Policy for Directors, Key Managerial Personnel and Senior Management is available on the Company website at

https://investor.gmrinfra.com/pdf/1 Nomination Remuneration Policy.pdf.

In recognition of the importance of having a diverse Board toward success of the organization, the Company has adopted the Board Diversity Policy. The Policy provides for having an appropriate blend of functional and industry experts on the Board, diversity in terms of cultural backgrounds, gender and skillset etc.

Declaration of Independence

The Company has received necessary 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 ("Act") and Regulation 16 of SEBI LODR and there has been no change in the circumstances affecting their status as Independent Directors of the Company. The Company has also received a declaration from all the Independent Directors that they have registered their names in the Independent Directors Data Bank.

Further, the Independent Directors have confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and also complied with the Code of Conduct for Directors and Senior Management Personnel, formulated by the Company.

Auditors and Auditors'' Report Statutory Auditors

M/s Walker Chandiok & Co. LLP, Registration No. (001076N/ N500013), were appointed as Statutory Auditors of the Company for a term of 5 (five) years from the conclusion of the 23rd Annual General Meeting (AGM) held on September 16, 2019, till the conclusion of the 28th Annual General Meeting of the Company.

The Auditors'' Report does not contain any qualification, reservation, adverse remark. The notes on financial statement referred in Auditor''s Report are self -explanatory and do not call for further comment.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor Secretarial Auditors have reported any incident of fraud to the Audit Committee or Board during the period under review.

Cost Auditors

Maintenance of cost records and requirement of cost audit as prescirbed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the business activities carried out by the Company.

Secretarial Auditors

The Board had appointed M/s. V. Sreedharan & Associates, Company Secretaries in Practice, to conduct Secretarial Audit for the FY 2022-23. The Secretarial Audit Report of the Company as

https://investor.gmrinfra.com/pdf/GMR Policy Whistle Blower.pdf. Number of Meetings of the Board

A calendar of Board Meetings is prepared and circulated in advance to the Directors. During the year under review, Seven (7) Board Meetings were held, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between two consecutive board meetings was within the period prescribed under the Companies Act, 2013 and SEBI LODR.

Particulars of Loans, Guarantees and Investments

A statement regarding Loans/ Guarantees given and Investments made covered under the provisions of Section 186 of the Companies Act, 2013 is made 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" to this report.

Annual Return

Pursuant to Section 134 and Section 92(3) of the Companies Act, 2013, as amended, draft of the Annual Return for the FY 2022-23 has been placed on the Company website at https://investor.gmrinfra.com/annual-reports .

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 (including amendments thereto), is attached as "Annexure F" to this Report.

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), 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.

Dividend Distribution Policy

The Board has adopted Dividend Distribution Policy in terms of Regulation 43A of SEBI LODR. The Dividend Distribution Policy is disclosed on the website of the Company at the link: https://

prescribed under Section 204 of the Companies Act, 2013 read with Regulation 24A of the Listing Regulations, for the FY ended March 31, 2023 is annexed herewith as "Annexure D" to this Report. The Secretarial Audit report does not contain any qualification, reservation or adverse remarks.

Further, the Secretarial Audit reports of material unlisted subsidiaries of the Company incorporated in India, as required under Regulation 24A of the SEBI LODR for the FY ended March 31, 2023 have been annexed as "Annexure D-1 to D-4".

It may be noted that based on the audited financial statements of the Company as on March 31, 2023, the Company has only 4 material subsidiaries i.e. GMR Airports Limited, Delhi International Airport Limited, GMR Hyderabad International Airport Limited and Delhi Duty Free Services Private Limited during the year under review.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Disclosures:CSR Committee

The CSR Committee comprises Dr. Emandi Sankara Rao as Chairman, Mr. B.V.N. Rao and Mr. Sadhu Ram Bansal as members.

Audit Committee

The Audit Committee comprises of Mr. Subba Rao Amarthaluru as Chairman, Dr. Emandi Sankara Rao, Dr. Mundayat Ramachandran, Mr. Sadhu Ram Bansal, as members.

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

Further details on the above committees and other committees of the Board are given in the Corporate Governance Report.

Vigil Mechanism

The Company has a Whistle Blower Policy, which provides a platform to disclose information regarding any purported malpractice, fraud, impropriety, abuse or wrongdoing within the Company, confidentially and without fear of reprisal or victimization. Your Company has adopted a whistleblowing process as a channel for receiving and redressing complaints from employees, directors and third parties, as per the provisions of the Companies Act, 2013, SEBI LODR and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The details of the Whistle Blower Policy are provided in the Corporate Governance Report and also hosted on the website of the Company investor.gmrinfra.com/pdf/GMR Dividend Distribution Policy.pdf.

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

During the year under review, there is no change in the Authorized share capital of the Company and it stood at 1455,00,00,000/-divided into 1355,00,00,000 equity shares of '' 1/- (Rupee one only) each and 10,00,000 (Ten lakhs) preference shares of '' 1,000/-(Rupees One Thousand only) each.

There was no change in the issued and paid-up share capital of the Company.

Debentures

During the year under review, the Company has not issued any debentures.

Foreign Currency Convertible Bonds

Pursuant to the approval of the shareholders of the Company granted at the 26th Annual General Meeting held on September 27, 2022, the Board of Directors at its meeting held on March 17, 2023, had approved issuance of 3,30,817 Foreign Currency Convertible Bonds ("FCCBs) of face value Euro 1,000 each aggregating to Euro 330.817 million equivalent to '' 2,931.77 crore to Aeroports De Paris S.A. ("ADP"), subject to necessary regulatory approval. Upon receipt of necessary regulatory approval, the Management Committee of the Board had on March 24, 2023 allotted 3,30,817 FCCBs of face value of Euro 1,000 each aggregating to Euro 330.817 million to ADP ("FCCB Holder") with a maturity period of 10 years and 1 day. The FCCBs carry an interest rate of 6.76% p.a. on a simple interest basis. Interest will accrue on a yearly basis and first interest instalment is payable on date of expiry of five years and subsequently every year thereafter.

The FCCB holder can exercise the conversion option at any time on or after the day following the 5th anniversary of the Closing Date i.e. March 24, 2023. The price at which each of the Shares will be issued upon conversion will initially be '' 43.67 (calculated by reference to a premium of 10% ) over and above the Regulatory Floor Price of '' 39.70 per share) but will be subject to adjustment as per the terms of FCCBs. The principle amount of FCCBs together with any accrued but uncapitalised or unpaid interest upto the date of conversion may be converted into Equity Shares of the company. The principle amount of FCCBs, if converted would have accounted for 67,06,00,981 equity shares of the Company.

Further the outstanding FCCBs aggregating to US$ 25 million issued to Kuwait Investment Authority (KIA) shall account for 111,24,16,667 equity shares of the Company (as per original entitlement) if converted.

Environment 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. The details of initiatives/ activities on environment protection and sustainability are described in Business Responsibility and Sustainability Report forming part of this Annual Report. The Company is also publishing Sustainability Report which is available on the website of the Company at www.gmrinfra.com

Change in the Name and Registered office of the Company

Pursuant to Special Resolution passed on August 27, 2022 by way of Postal Ballot, the name of the Company was changed from GMR Infrastructure Limited to "GMR Airports Infrastructure Limited" w.e.f September 15, 2022.

The Shareholders of the Company at the 26th Annual General Meeting held on September 27, 2022 had approved shifting of Registered Office of the Company from the State of Maharashtra to the State of Haryana, subject to the approval of the Central Government (Power delegated to Regional Director). Pursuant to receipt of the approval for shifting of Registered Office from the Regional Director, Western Region, the Board of Directors had approved the situation of the new Registered Office at Gurugram, Haryana with effect from June 22, 2023. Consequent to shifting of Registered Office the CIN of the Company has also changed to "L45203HR1996PLC113564"

Change in the nature of business, if any

There are no changes 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 Company''s operations in future.

Deposits

During the year under review, the Company has not accepted any deposit from the public. There are no unclaimed deposits/ unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.

Compliance by Large Corporates:

Your Company does not fall under the Category of Large

Corporates as defined under SEBI vide its Circular SEBI/HO/DDHS/ CIR/P/2018/144 dated November 26, 2018, as such no disclosure is required in this regard.

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.

There were no sexual harassment complaint pending or received during the year ended March 31, 2023.

Proceeding under Insolvency and Bankruptcy Code and Onetime settlement

a) There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

b) During the year under review, the Company has not made any one-time settlement

Other than the matters disclosed in this Report, there are no other events or transactions during the year that require disclosures to be made in terms of the provisions of Companies Act, 2013.

Acknowledgements

Your Directors thank the lenders, banks, financial institutions, business associates, joint venture partners and other stakeholders, 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.


Mar 31, 2022

The Board of Directors present the 26th Annual Report together with the audited financial statements of the Company for the Financial Year (FY) ended March 31, 2022.

Your Company, GMR Infrastructure Limited ("GIL"/ "Company"), is a leading global infrastructure conglomerate with unparalleled expertise in designing, building, and operating Airports in India and overseas.

GMR Group is the largest private airport operator in Asia and one of the largest globally with operational passenger handling capacity of ~ 105 million annually. The Group operates the iconic Delhi International Airport, which is the largest and fastest-growing airport in India. The Group also runs Hyderabad International Airport, a pioneering greenfield airport known for several technological innovations. The Group is also operating Bidar Airport in Karnataka. With respect to international airports, the Group is operating the architecturally renowned Mactan Cebu International Airport in Cebu, Philippines, in partnership with Megawide. Expanding its overseas footprint, GMR Group, in collaboration with Angkasa Pura II (AP II), has recently bagged the development and operation rights of Kualanamu International Airport in Medan, Indonesia.

in line with our strategy to churn assets and redeploy in high growth opportunities, the Group has entered into definitive agreements to divest its equity stake in GMR Megawide Cebu Airport Corporation.

The Group is currently developing three major greenfield airport projects across India and Greece, which includes Airport at Mopa in Goa, Airport at Bhogapuram in Andhra Pradesh and Airport at Heraklion, Crete, Greece in partnership with GEK Terna. Goa and Bhogapuram airports in India are poised to transform the economy and landscape of the surrounding areas when ready. Crete Airport in Greece will similarly play a significant role in the local economy of the region.

Further, in a recent development with respect to Nagpur Airport, where GMR had emerged as the highest bidder in March 2019 but subsequently the bidding process was annulled by the authority in March 2020, Hon''ble Bombay High Court quashed the award cancellation letter and directed the concerned authority to sign concession agreement for Nagpur Airport with GMR. Hon''ble Supreme Court too upheld the HC order.

As a pioneer in implementing the path breaking Aerotropolis concept in India, GMR Group is developing unique airport cities on commercial lands available around its airports in Delhi, Hyderabad, and Goa. GMR Delhi Aerocity is a landmark business, leisure, and experiential district. Similarly, GMR Hyderabad Aerocity is coming up as a new-age smart business hub.

Performance highlights - FY 2021-22

Performance Highlights of your Company on consolidated basis for the FY 2021-22:

• Hon''ble National Company Law Tribunal, Mumbai bench (''''the Tribunal'''') vide its order dated December 22, 2021 (formal order received on December 24, 2021) has approved a Composite Scheme of Amalgamation and Arrangement for amalgamation of GMR Power Infra Limited with the Company and Demerger of Engineering Procurement and Construction (EPC) business and Urban Infrastructure Business of the Company (including Energy business) into GMR Power and Urban Infra Limited ("GPUIL") ("Scheme" or "Composite Scheme of Arrangement"). Accordingly, assets and liabilities of the EPC business and Urban Infrastructure business (including Energy business), as approved by the Board of Directors pursuant to the Scheme stood transferred and vested into GPUIL with effect from April 1, 2021, being the Appointed Date for the Scheme.

• Strong domestic traffic recovery in Delhi and Hyderabad Airports to near 100% of pre-Covid levels. Restrictions on International flights lifted on March 27, 2022.

• Passenger Traffic at Delhi International Airport during the FY 2021-22 increased by 74% YoY from 22.6 Mn to 39.3 Mn., Passenger Traffic at Hyderabad International Airport during the FY 2021-22 increased by 54% YoY from 8 Mn to 12.4 Mn. Passenger Traffic at CEBU Airport (Philippines) declined by 52% YoY from 2.7 Mn to 1.3 Mn, mainly due to Covid 19 impact.

• Third Covid Wave hit India from latter part of December 2021. However, traffic recovered rapidly especially domestic traffic. Cargo traffic remained resilient and is unfazed by multiple Covid Waves.

• Delhi and Hyderabad Airports'' expansion works are progressing as per schedule.

• Goa Airport, construction and development work is in full swing and the airport is expected to commence operations during the current financial year. Achieved physical progress of 72% as of March 31,2022. Letter of Award for Construction of Expressway (NH 166S) connecting NH 66 to Mopa Airport is awarded and the Expressway is expected to be operational by Q3 FY 2023.

• At Bhogapuram Airport, land acquisition is in its last stages. Development of detailed design of the Airport and R&R work is in progress.

• Supreme Court upholds Bombay High Court''s judgement granting concession rights of Nagpur Airport to GMR.

Supreme Court of India has upheld the judgement of the Nagpur Bench of the Bombay High Court that had previously quashed and set aside the Letter issued by MIHAN India Limited annulling the bidding process for the Nagpur Airport. Accordingly, the Authorities are expected to execute the Concession Agreement at the earliest for the Nagpur Airport with GMR.

• Hyderabad Airport Extension of the term of Concession Agreement.

GMR Hyderabad International Airport Limited has received a letter of confirmation from the Ministry of Civil Aviation extending the term of the Concession Agreement for a further period of 30 Yrs. i.e., from March 23, 2038 up to March 22, 2068.

• Crete Airport (Greece), Project is fully funded mainly through state grant which is already received. It is a debt free Project. Earthworks are progressing in multiple fronts of runway, apron, terminal building and access roads along with flood protection

and drainage works. Approx. 11% financial progress is achieved with completion of approx. 76% of earthworks in airport area and 30% earthworks in access roads as of March 31, 2022.

• The Group received letter of award for operation, development and expansion of Medan Airport (Indonesia) for a period of 25 years. The Medan Airport handled over 10 Mn passenger (PAX) in 2018. Medan is the 4th largest urban area in the country. The project SPV took charge of Commercial Operations on July 7, 2022.

Financial results - FY 2021-22 a) Consolidated financial results

The Consolidated Financial Statements for the year ended March 31, 2022, have been prepared by giving effect to the Composite Scheme of Arrangement for demerger of Engineering Procurement and Construction (EPC) business and Urban Infrastructure business (including energy business) of the group into GMR Power and Urban Infrastructure Limited. However, as per applicable Ind-AS, EPC business and Urban Infrastructure business (including Energy business) is disclosed as discontinued operations till the effective date of Scheme i.e. December 31, 2021 and also for the year ended March 31, 2021. For detailed disclosure refer note 34 of consolidated financial statements.

The following table sets forth information with respect to the consolidated statement of Profit and Loss of the Company for FY 2021-22:

('' in crore)

Particulars

March 31,2022

March 31, 2021

Continuing operations

Income

Revenue from operations

4,600.72

3,566.01

Other income

358.44

430.73

Total Income

4,959.16

3,996.74

Expenses

Revenue share paid/ payable to concessionaire grantors

224.02

360.79

Operating and other administrative expenditure

2,274.13

2,417.32

Depreciation and amortization expenses

889.40

886.12

Finance costs

2,018.66

1,803.00

Total expenses

5,406.21

5,467.23

Loss before share of profit/ (loss) of investments accounted for using equity method, exceptional items and tax from continuing operations

(447.05)

(1,470.49)

Share of profit/ (loss) of investments accounted for using equity method

70.70

(59.09)

Loss before exceptional items and tax from continuing operations

(376.35)

(1,529.58)

Exceptional items - (loss)

(388.26)

-

Loss before tax from continuing operations

(764.61)

(1,529.58)

Tax credit

(12.30)

(286.32)

Loss after tax from continuing operations

(i)

(752.31)

(1,243.26)

EBITDA from continuing operations

2,102.57

787.90

(Revenue from operations - Revenue share - operating and other admin expenses)

Discontinued operations

Loss from discontinued operations before tax expenses

(318.33)

(2,160.62)

Tax expenses

60.75

23.89

Loss after tax from discontinued operations

(ii)

(379.08)

(2,184.51)

Total loss after tax for the year

(A) (i ii)

(1,131.39)

(3,427.77)

(? in crore)

Particulars

March 31,2022

March 31, 2021

Other comprehensive income from continuing operations

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations

(101.29)

112.66

Net movement on cash flow hedges

(370.00)

91.01

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement gains / (losses) on defined benefit plans (net of taxes)

(1.80)

1.97

Other comprehensive income for the year from continuing operations, net of tax (B)

(473.09)

205.64

Other comprehensive income from discontinued operations

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations

17.57

(8.61)

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement gains / (losses) on defined benefit plans (net of taxes)

(0.57)

0.61

Other comprehensive income for the year from discontinued operations, net of tax (C)

17.00

(8.00)

Other comprehensive income for the year (D = B C)

(456.09)

197.64

Total comprehensive income for the year, net of tax (A D)

(1,587.48)

(3,230.13)

Loss for the year

(1,131.39)

(3,427.77)

a) Attributable to equity holders of the parent

(1,023.29)

(2,797.28)

b) Attributable to non-controlling interests

(108.10)

(630.49)

Total comprehensive income

(1,587.48)

(3,230.13)

a) Attributable to equity holders of the parent

(1,226.89)

(2,657.64)

b) Attributable to non-controlling interests

(360.59)

(572.49)

Earnings per equity share (?) from continuing operations

(0.98)

(1.22)

Earnings per equity share (?) from discontinued operations

(0.72)

(3.42)

Earnings per equity share (?) from continuing and discontinued operations

(1.70)

(4.64)

The revenue from airport sector increased by 29% from '' 3,566.01 crore in FY 2020-21 to '' 4,600.72 crore in FY 2021-22 mainly due to increase in aeronautical, duty free, retails, advertisement and parking revenue on account of strong domestic traffic recovery in Delhi and Hyderabad airports near to pre-Covid levels.

Decrease in revenue share paid / payable to concessionaire grantors was on account of revision in CPD contracts.

There is decrease in operating and other administrative expenditure in FY 2021-22 mainly due to decrease in foreign exchange fluctuation, airport operator charges and provision of advances to AAI.

There is increase in finance cost in FY 2021-22 due to additional borrowing taken in few subsidiaries.

There is increase in share of profit from investment in joint

venture/ associate mainly due to disruption cause by Covid-19 pendemic in previous year.

b) Standalone financial results

The Standalone Financial Statements for the year ended March 31, 2022, have been prepared by giving effect to the Composite Scheme of Arrangement for amalgamation of GMR Power and Infra Limited (GPIL) with the Company and demerger of Engineering Procurement and Construction (EPC) business and Urban Infrastructure business (including energy business) of the Company into GMR Power and Urban Infrastructure Limited. However, as per applicable Ind-AS, EPC business and Urban Infrastructure business (including Energy business) is disclosed as discontinued operations till the effective date of Scheme i.e. December 31, 2021 and also for the year ended March 31, 2021. For detailed disclosure refer note 41 of standalone financial statements.

Increase in revenue from operations is mainly due to supply of goods and services to DFCC project.

The increase in other operating income is mainly due to interest income on inter corporate loans.

The increase in operating and other administrative expenditure is mainly due to supply of goods and services to DFCC project.

Exceptional items primarily comprise of gain/ (loss) in carrying value of investments.

There are no material changes and commitment, except those already disclosed in this report, affecting the financial position of the Company which have occured between the end of the FY 2021-22 and the date of this report.

The following table sets forth information with respect to the standalone statement of Profit and Loss of the Company for FY 2021-22:

('' in crore)

Particulars

March 31,2022

March 31, 2021

Continuing operations

Revenue from operations

21.33

-

Other operating income

17.73

7.33

Other income

1.00

0.94

Operating and other administrative expenditure

43.97

32.27

Depreciation and amortization expenses

0.91

1.20

Finance costs

78.98

78.32

Loss before exceptional items and tax from continuing operations

(83.80)

(103.52)

Exceptional items

(16.79)

(13.06)

Loss before tax from continuing operations

(100.59)

(116.58)

Tax expense

58.72

-

Loss after tax from continuing operations (i)

(159.31)

(116.58)

Discontinued operations

Loss from discontinued operations before tax expenses

(150.47)

(1,169.26)

Tax credit

-

(3.86)

Loss after tax from discontinued operations (ii)

(150.47)

(1,165.40)

Total loss after tax for the year (i ii)

(309.78)

(1,281.98)

Net surplus / (deficit) in the statement of profit and loss -balance as per last financial statements

2,122.60

(956.34)

Transfer from debenture redemption reserve

-

59.49

Re-measurement gains on defined benefit plans (net of taxes)

(0.62)

0.55

Transfer on account of redemption of OCDs

-

45.92

Transfer from fair valuation through other comprehensive income (''FVTOCI'')

1,674.97

4,254.96

Transfer on account of composite scheme of arrangement

(32.68)

-

Surplus available for appropriation

3,454.49

2,122.60

Appropriations

-

-

Net surplus in the statement of profit or loss

3,454.49

2,122.60

Earnings per equity share (?) from continuing operations

(0.26)

(0.19)

Earnings per equity share (?) from discontinued operations

(0.25)

(1.93)

Earnings per equity share (?) from continuing and discontinued operations

(0.51)

(2.12)


COVID-19 Impact

By the end of FY21, COVID first wave was fully dissipated and the Indian economy was on a quick mend. In line, our airports also witnessed a strong traffic recovery. By March 2021, traffic at our Indian airports had recovered to the levels of ~70% domestic traffic and ~30% International traffic as compared to pre-COVID levels. However, this recovery was disrupted by the second wave of COVID-19 which hit India in April 2021. The wave which continued from April to June 2021, was characterized by exponential rise in COVID cases and fatalities, domestic movement restrictions and countries implementing travel bans with India. As a result, traffic at our airports was also drastically impacted with domestic pax numbers going down to 19% and International to 11% of pre-COVID levels in the month of May 2021.

('' in crore)

Particulars

March 31, 2022

March 31, 2021

General reserve

174.56

174.56

Securities premium account

-

10,010.98

Surplus in statement of profit and loss

3,454.49

2,122.60

Capital reserve

141.75

141.75

Foreign currency monetary translation reserve (''FCMTR'')

(20.21)

(173.82)

Fair valuation through other comprehensive income (''FVTOCI'') reserve

6,037.65

(3,143.07)

Equity component of related party loans

-

1.24

Total

9,788.24

9,134.24

Impact of second COVID wave though sudden and drastic was shortlived as the new cases began to fall and by July 2021 India seemed to be coming out of the second wave. Since then, active cases have further reduced, vaccination coverage increased and economic indicators surpassed post first wave peaks. Accordingly, traffic at our airports also recovered significantly and by December 2021, levels reached ~90% domestic traffic and >50% International traffic as compared to pre-COVID levels.

By January 2022, India was at peak of economic recovery post the devastating COVID second wave. All economic indicators indicated to a good economic performance. As a result of COVID related disruptions becoming less stringent, India GDP growth registered at ~8.9% for CY21 (IMF estimate), which was the highest among large economies.

However, around new year time / early January 2022, recent Indian recovery was disrupted again by a third COVID wave on account of new COVID variant Omicron. By mid-January 2022, this wave had peaked at >350K daily new cases in India alone. Fortunately, the wave dissipated as quickly as it rose and thus, by mid of March 2022, the cases began to moderate. During the period, restrictions implemented by the government were more rational and less stringent than previous waves and thus economic impact of the third wave was limited.

In terms of government regulations, capacity constraint on domestic airlines was completely removed. Further in a major development, restrictions on scheduled International flights were removed. Such measures coupled with rise in consumer confidence post dissipation of COVID waves, have resulted in further recovery of passenger traffic at our airports.

It is pertinent to mention here, that while during the year we battled numerous challenges as listed above, we continued to operate our airports efficiently while ensuring implementation of passenger safety measures. Further, we implemented various cash conservation measures to ensure business continuity. We also ensured enough liquidity so as to continue with expansion CAPEX at Delhi and Hyderabad Airports and construction activities at our greenfield airports.

All this while, we continued to focus on the safety and welfare of the employees. As the Government allowed private companies to vaccinate, we were at the forefront to vaccinate our employees and their immediate family members.

Dividend / Appropriation to Reserves

Your Directors have not recommended any dividend on equity shares for the FY 2021-22.

Reserves

The net movement in the major reserves of the Company on standalone basis for FY 2021-22 and the previous year is as follows:

Composite Scheme of Amalgamation and Arrangement

The Board of Directors of your Company at its meeting held on August 27, 2020 had approved the Composite Scheme of Amalgamation and Arrangement amongst GMR Power Infra Limited ("GPIL"), Company and GMR Power and Urban Infra Limited ("GPUIL") and their respective shareholders under Section 230 to 232 read with Section 66 of the Companies Act, 2013 ("Scheme"). The necessary consent to the Scheme was also received from the shareholders and creditors of the Company. The Scheme inter-alia provided for (i) Merger of GPIL with GIL and (ii) Demerger of EPC Business and Urban Infrastructure Business of GIL into GPUIL.

The Scheme was sanctioned by Hon''ble National Company Law Tribunal, Mumbai Bench on December 22, 2021 and the same was effective from December 31, 2021. The Appointed Date of the Scheme was April 1, 2021.

Management Discussion and Analysis Report (MDA)

MDA Report for the year under review, as stipulated under the 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 developments of each of the major subsidiaries'' business is presented below. Further, MDA, forming part of this Report, also brings out review of the business operations of major subsidiaries and jointly controlled entities.

Airport Sector

The Company''s airport business comprises of four operating airports viz., Indira Gandhi International Airport at Delhi, Rajiv Gandhi International Airport at Hyderabad & Bidar Airport at Karnataka in India and Mactan Cebu International Airport in Philippines. Further two assets are under construction viz., Greenfield Airports at Mopa,

Goa and Crete International Airport in Greece. Also, post signing of the Bhogapuram International Airport (new Vishakhapatnam Airport) concession agreement in June 2020, the Company has been working on various preparatory activities even as the authorities seek clearances to meet their obligations for initiating the construction work.

GMR Group is actively pursuing opportunities for new airports as and when they arise. We are actively tracking the next round of regional airports being privatized by the Government of India. On the international front, in the near future, the Group is strategically focusing on opportunities in South and South East Asia and the Middle East. GMR Group recently won the bid to manage, develop and operate the brown field Kualanamu International Airport (KNO) in Indonesia. The project SPV took charge of Commercial Operations on July 7, 2022. The Group also pursued and won the right to develop Nagpur Airport post favorable decision from Supreme Court on the same.

We also continue to explore opportunities in Africa, Latin America and Eastern Europe. GMR Airports is looking to drive growth not only through Airport Concessions, but also through provision of airport related services including EPC, Project Management, Engineering & Maintenance, Duty Free, Cargo, other non-aero concessions etc.

FY 2021-22 was mostly a post-pandemic recovery year. Although it was marked by various COVID waves across the world, since most of the countries had rationalized travel restrictions, demand had gradually recovered led by domestic traffic. International traffic recovery has been more gradual in the same period. Given frequent disruptions, the airports and the airlines have also evolved to be more operationally flexible to deal with abrupt changes in business scenario and regulations. Given the limited impact of Omicron wave, the sector has seen renewed investments to cope with rising demand. Various new airlines came up and existing ones started to resume with capacity expansion initiatives.

An overview of the operations at our assets during the year is briefly given below:

Delhi International Airport Limited (DIAL)

DIAL is a subsidiary of the Company and its shareholding comprises of GMR Airports Limited ("GAL") (64%), Airports Authority of India (AAI) (26%) and Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi.

Highlights of FY 2021-22:

FY 2021-22 brought number of major challenges for the Indian Aviation Sector.

Indian Aviation Sector continued to face disruptions from Covid-19 but amid normalization of consumer sentiment and rationalization

of travel restrictions, exhibited tremendous recovery in passenger traffic towards the end of the financial year. The year started with second wave of Covid-19 which led to the reset in passenger traffic level to 10% - 15% of pre-Covid level. With the phase wise capacity deployment in domestic operation, passenger traffic started to pick up in 2nd half of the year though there was temporary setback with the onset of third wave of Covid-19.

During FY22, International operations were limited to Vande Bharat flights, charter operations and bubble flights with different countries. Despite the ban on scheduled operation, IGIA remained operational throughout the year supporting various government initiatives in combatting COVID. During the COVID-19 2nd wave, IGIA played a major role in the nation''s efforts to fight the pandemic by handling and distribution of medical supplies, which poured in from around the world. DIAL also played a major role as a hub for distribution of vaccines.

Throughout the year, DIAL proactively engaged with all stakeholders in development of safe travel policy and pushing passenger growth through Bubble Airport arrangements. DIAL worked with stakeholders including government authorities to develop uniform health and safety protocols within India.

Operational Performance:

DIAL responded to the adversities brought by pandemic promptly and with considerable flexibility. As a result, we witnessed significant growth of traffic at IGI Airport. Passenger traffic at IGIA was 39.3 mn in FY 2021-22, a growth of 74.2% over previous year with 103.3% growth in international traffic and 69.4% growth in domestic traffic. During the year, IGI Airport handled 319,571 Air Traffic Movements (ATMs) and clocked 0.92 MMT cargo volume with an overall growth of 25.3% over previous year, driven by 17.9% growth in the domestic cargo and 29.7% in international cargo. Despite the pandemic, DIAL performed relatively better on cargo recovery as compared to pre-Covid levels.

DIAL''s focus on operational excellence and customer experience backed by a strong organizational culture has helped sustain its leadership position in Airport Service Quality. As a result, DIAL was once again recognized as the Best Airport for service quality in the region by ACI and Best Airport in Central Asia by Skytrax.

Capacity augmentation initiatives of FY 2021-22

In spite of operational and logistical challenges thrown by the pandemic, DIAL continued its focus on its expansion plan of airside infrastructure and terminal capacity as per the approved Master Development Plan in order to cater to the future growth in passenger and air traffic. The Phase 3A expansion includes, among others, expansion of Terminal 1 and Terminal 3, construction of a fourth runway along with enhancement of airfields and construction of taxiways, which will expand capacity of IGI Airport to 100 Mn passengers annually. Key highlights on the developments:

• Cumulative physical progress on phase 3A expansion as on 31st March 2022 is ~61%.

• During the year, new arrival terminal at Terminal 1 was competed and operationalized.

• DIAL has successfully completed the rehabilitation work of British-era Runway 09/27 and handed over the refurbished runway to Air Traffic Control (ATC) for commercial operations.

Passenger convenience initiatives of FY 2021-22

• Launched India''s first airport Rapid RT PCR testing at COVID testing facility at IGIA.

• Implemented contactless check-in through Scan & Fly, i-CUSS (intelligent CUSS), e-BCR (boarding card readers) at terminal.

• Ensured provision of contactless commerce for retail and F&B ordering and payments.

• 24 X 7 real time updates through social media on changing guidelines and helping passenger through their queries.

• As part of social media responsiveness, IGI Airport achieved First Response Time of 7 minutes which is best among world airports.

Awards and Accolades of FY 2021-22

• Delhi Airport has once again emerged as Best Airport in the over 40 million passengers per annum (MPPA) category in Asia Pacific region by ACI in the Airport Service Quality Programme (ASQ) 2021 rankings.

• IGI Airport has been voted as Best Airport in India / Central Asia for 4th consecutive years in Skytrax ranking. IGIA has also been voted as Cleanest Airport in India / South Asia in 2022.

• In terms of Skytrax world airports ranking, Delhi airport jumped from rank 50 in 2020 to 45th in 2021 and further to rank 37 in 2022.

• IGI Airport has been re-accredited with ACI''s Airport Health Accreditation (AHA) for its efforts in providing a safe travel experience to all travelers without any risk to their health.

• IGI Airport has been conferred with ACI World''s "Voice of Customer" recognition for second time in a row for its continuous efforts to listen to its passengers, engage and gather feedback.

Sustainability Focus

DIAL has always had a strong focus on Sustainability and has received

various awards and accolades in this regard for many years now. In

FY 2021-22:

• DIAL won the Platinum Recognition in the Green Airports Recognition run by ACI Asia Pacific in over 25 million passenger category. This is the 5th consecutive year where DIAL has been appreciated and awarded for undertaking sustainable initiatives.

• DIAL was declared the prestigious ''Energy Excellent Unit'' and

bestowed with ''National Energy Leader Award 2021'' by CII -Green Business Centre based on the consistent performance of the highest level in the last four years.

• In Wings India 2022 organized by Ministry of Civil Aviation, IGIA was bestowed with "Aviation Sustainability and Environment Award" and "Covid Champion Award".

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a subsidiary of the Company and its shareholding comprises of GAL (63%), AAI (13%), Government of Telangana (13%) and MAHB (Mauritius) Private Limited (11%) and has a long-term agreement to operate, manage and develop the Rajiv Gandhi International Airport (RGIA), Hyderabad.

Highlights of FY 2021-22:

The pandemic continued to disrupt traffic recovery in FY 2021-22 with new variants and multiple waves, adversely affecting people''s health and country''s economic situation as a whole. These undesirable developments had led to overall dampening of consumer sentiment impacting air passenger traffic across the country. However, with the help of learnings from the 1st wave, and proactive steps being taken to counter the impact of pandemic, GHIAL passenger traffic in FY 2021-22 recovered to a level of 58% of traffic in FY 2019-20.

During the first quarter of FY 2021-22, the outbreak of 2nd COVID wave led to limited passenger throughput at the airports. Although the restrictions were imposed on air travel, the learnings from first wave helped in quickly responding to the subsequent waves by taking the necessary steps to safeguard staff & passenger health and business interests of the company. The domestic passenger traffic gradually recovered in sync with the phased increase in flight activity after the impact of second wave of pandemic.

It is noteworthy that during these testing times, GHIAL played a major role in the nation''s fight against pandemic and became an important hub for handling and distribution of medical supplies including vaccines throughout India. GMR Hyderabad Air Cargo handled the largest import shipment of Sputnik V COVID-19 vaccines in June 2021.

Operational Performance:

The Indian aviation industry has witnessed the impact of COVID 2nd wave with the entire aviation ecosystem including airlines, airport operators, various service providers and stakeholders facing the brunt of the lockdowns and the government-imposed restrictions on air travel. However, RGIA continued to lead the recovery of passenger traffic (recovering by over 93% Domestic and 69% International in March 2022) amongst the other major airport operators despite the impact of the second and third COVID waves.

During the financial year, RGIA handled 12.42 million passengers, over 1,14,000 Air Traffic Movements ("ATMs") and more than 1,40,000 Metric Tonnes ("MTs") of Cargo. On a year-on-year basis, passenger movements and ATMs witnessed a growth of 54% and 33%, respectively. Cargo witnessed around 24% YoY growth.

Due to the COVID pandemic the connectivity to various domestic and international destinations was impacted. However, by end of the year, RGIA was connected to 70 domestic destinations as compared to pre-COVID level of 55 domestic destinations. Although the international scheduled operations remain suspended during the year, by the end of the year 16 international destinations were connected under Air Bubble arrangements as compared to 16 pre-COVID destinations.

Out of the 15 new destinations added post COVID, eight new domestic destinations were added in the Financial Year 2021-22 including Srinagar, Dehradun, Pondicherry, Udaipur, Jamnagar, Jodhpur, Dimapur and Gondia and four international destinations were reconnected after the second wave viz. Chicago, Singapore, Kuala Lumpur and Male. Air India started a new route to London, becoming the first ever Indian carrier to connect Hyderabad to London.

On the Cargo front, Cathay Pacific cargo started operating B747 freighter turnaround flight on a weekly basis on HKG-HYD-HKG route, earlier they used to operate via Delhi with shared capacity. SpiceXpress started scheduled freighter flights to Delhi, Bombay and Bangalore. Also, SpiceXpress started operating non-scheduled freighter to Bangkok once weekly, aiming to convert into scheduled operations, subject to market demand. In Financial Year 2021-22, RGIA had second best recovery in terms of overall cargo tonnage, and best recovery in terms of domestic cargo tonnage among the metro airports in India.

With a vigorous rollout of the vaccines to all age groups where RGIA played an important role as a hub for vaccine distribution and given the strategic and competitive advantage RGIA holds amongst its peers, it is returning to its growth path as the situation gradually returns to normalcy.

Capacity augmentation initiatives FY 2021-22

As part of the capital expansion works, further progress was made as follows:

> On Airside,

• New RETs (04 nos.) have been commissioned taking the total number of RETs to 08 nos. These will benefit significantly in reducing the runway occupancy time (ROT) and thereby enable to augment the runway capacity.

• A new GSE Tunnel connecting the remote stands on the east and the expanded terminal building has been commissioned. The Tunnel will enhance safety and minimize the time loss during the crisscross movement of Ground Service Equipment (GSE) vehicles and Aircrafts.

• Northeast Apron is nearing completion and Northwest Apron works are in progress. Both the facilities are expected to be operational by 2022 progressively and will increase the contact stand capacity once completed.

> On Passenger Terminal Building ("PTB") expansion,

• Straight portion of East Pier of about 15,750 sqm has been

constructed and is in trails for operational readiness. In addition to enhancing passenger experience, this will add more passenger and retail spaces on the domestic side. Also 3 more contact stands will be made operational.

• West Processor is in advanced stage of construction and is targeted to be made operational very soon. All systems are substantially complete and finishing works are in progress.

• Remaining areas of PTB expansion are also in progress and gaining momentum. Deliverables are planned in the sequence of East Pier Bulb, West Pier and East Processor in line with Operational requirements.

• Several areas within the existing terminal building have been modified and handed over. These are critical for seamless integration of new and old facilities and enhancing passenger experience.

• Despite challenges posed by pandemic, all imported materials pertaining to critical Airport Systems like BHS have been delivered. Delivery of other systems are also on track and will complete very soon.

> It may be noted that due to the constant efforts made by GHIAL, the construction works did not stop due to the second or third waves of the pandemic but kept progressing at a slow pace with available resources at priority areas.

GHIAL has also obtained the necessary Regulatory and Statutory approvals as applicable from Authorities like DGCA, BCAS, Fire Occupancy and TSPCB.

• As on March 2022 the Airport expansion works clocked an overall physical progress of ~73%.

• Vaccination program for the entire work force was rigorously monitored and the initiative has greatly benefited our employees. Works have recovered faster than after earlier waves and only specific areas of work (material supplies impacted due to continued restrictions) took a little more time for recovery.

The revised project execution strategy factoring the impact of the 3rd wave has been worked out and the balance deliverables are expected to be delivered by March 2023 progressively.

Passenger convenience initiatives FY 2021-22

RGIA focuses on creating and delivering a well-rounded shopping, retail and commercial services experience for the passengers and visitors at RGIA, which in turn provides a strong and fast-growing source of revenues for the airport.

Highlights from FY 2021-22 include:

• Increasing non passenger income by operationalization of "Aero Plaza" at RGIA.

• RGIA has started online food ordering and home delivery facility via HOI app for F&B outlets at the airport for GMR Township/ offices through its food delivery partner, ''Foodys''.

• All key Non Aero KPIs are higher than pre-COVID level.

Despite the challenges faced due to the pandemic, RGIA added 22 new stores / concepts and outlets including various renowned brands for further improving the range of choices available to the passengers and driving further growth in non-aero and non-passenger income for GHIAL.

During the financial year under review, GHIAL launched many promotions, campaigns and a Raffle draw for growth of sales and improved customer engagement. RGIA launched first of its kind Anniversary offer which included various offers/staff discounts.

Other Initiatives- Operations

Continuing with our relentless focus to offer the best possible service quality and passenger experience and achieve world-class levels of operational efficiency, several new milestones were attained during the year.

Some of the highlights for FY 2021-22 are as below:

• Primary Runway was recommissioned on 10/07/2021 after rehabilitation work of pavement and construction of four new Rapid Exit Taxiways (RETs).

• HYD Airport became the first & only Airport to publish comprehensive ''Electronic Terrain & Obstacle Data (eTOD)'' in India.

• Telangana State Pollution Control Board (TSPCB) renewed the Airport - Consent for Operation (CFO) till January 2025.

• TSPCB granted the Consent for Operation (CFO) order dt. 01/ 02/2022 for the 25 MPPA airport expansion project of RGIA with validity till 31/01/2026.

• RGIA Aerodrome license was renewed till March 2024.

• Installation of ILS equipment for Secondary Runway 09L completed on 14th Aug 2021 and installation of RWY 27R-09L RVR completed on 24th Sep 2021.

• Testing and Calibration work for newly equipped Mid RVR was completed which is the mandatory part of CAT II operations.

• Commissioned additional 5MW Solar Power Plant on 8th July 2021.

• Operationalized New Water T reatment Plant at R2 Reservoir with a total capacity of 1000KLD. The Treated Water is used for Domestic/ Flushing Purpose in PTB resulting in total cost saving of approximately INR 48 Lakhs per annum.

Awards and Accolades

• Ranked 64th in Skytrax Annual Awards (Moved up by 7 places from 71st) and further to 63rd rank in 2022 (ahead of BOM and

BLR), Best Regional Airport in Central Asia & India Award;

• ACI- Airport Health Accreditation- HYD was among first few airports to achieve this certification in the Asia Pacific Region;

• ACI - Best Airport by Size and Region (15 to 25 million passengers per year in Asia-Pacific);

• ACI Voice of Customer Recognition.

• Best Airport Award at Wings India 2022.

Sustainability Focus

GHIAL has always had a strong focus on Sustainability and has received various awards and accolades in this regard for many years now. In FY 2021-22, GHIAL:

• Received the ACI Green Airport recognition 2021- Gold for the Air Quality management.

• Awarded the "Gold Award" at the Telangana State Energy Conservation Awards 2020 & "Excellence Award" in 2021.

• Winner of CII''s National Energy Leader & Energy Excellence Unit Award 2021.

• Received the "Certificate of Merit" at BEE''s National Energy Conservation Awards (NECA) 2021.

GMR Goa International Airport Limited (GGIAL)

At Goa Airport, Construction and Development works resumed at site in February 2020 post the reaffirmation of Environmental Clearance to the Project by Hon''ble Supreme Court of India.

Currently, construction works are in full swing at multiple locations of the project including Runway, Airside, Taxiway, PTB, Apron, Boundary Walls etc. The Project has achieved overall physical progress of ~72% and financial progress of ~70% as of 31st March 2022.

Airports Authority of India (AAI) being the sovereign Airport Navigation Service provider, GGIAL has handed over Technical Building to them in order to install their equipment and set up their offices. Also, the NAVAIDS buildings are under advanced stages of Construction to be handed over to AAI soon.

In Compliance to the provision of the Concession Agreement, Aviation Skill Development Centre (ASDC) has been constructed and inaugurated by Hon''ble Prime Minister of India. ASDC has been established with the purpose of imparting training to youth of the State and make them employable. Skill Development programs affiliated to National Skills Qualifications Framework (NSQF) are expected to commence soon.

Multi-year tariff proposal application has also been filed with Airports Economic Regulatory Authority of India (AERA) seeking tariff determination for first Control Period.

Further, to ensure seamless connectivity to the Airport, LOA for a dedicated 6 Lane Expressway connecting NH66 to Mopa Airport has been awarded by Government of Goa and the project is expected to be completed during Q3 of FY 2023.

GMR Megawide Cebu Airport Corporation (GMCAC)

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

Highlights of FY 2021-22:

The impact of COVID-19 pandemic continued in CY2021 also, significantly impacting Mactan-Cebu International Airport with annual traffic significantly lower than pre-pandemic levels. The passenger footfall for CY 2021 was recorded at ~1.3 Mn, constituting of ~1.15 Mn Domestic passengers and ~0.15 Mn International passengers, thereby witnessing a 52% decline in overall traffic from CY 2020 and 89% decline from CY2019.

Philippines instituted highly restrictive lockdowns and stringent policy restrictions continued for majority of CY2021. MCIA saw meaningful recovery only in the last quarter of CY2021 with the easing of restrictions from the Government. Since then, MCIA witnessed steady traffic ramping which was interrupted by Typhoon Odette that passed through Cebu on December 16, 2021. But traffic has continued its recovery with March 2022 traffic at ~30% of pre-pandemic level.

GMCAC took a Zero-based budgeting approach to further realise cost savings. As part of it, GMCAC achieved reductions in fixed priced contracts by moving towards a slab-based pricing approach and a consolidated single-party facilities management to achieve further savings. The debt restructuring exercise was completed in May 2021 which was underpinned by deferral of principal and part of the interest until 2023, providing a relief on GMCAC''s cash flows.

GMCAC also regularly worked on initiatives that can effectively utilise our infrastructure with activities such as Bazaar Concepts, Health/ Wellness events for Retail and F&B sales generation to improve the use of idle assets and stay relevant and top of the mind of passengers and non-passengers. We also continued sourcing out prospective concessionaires for our Airport Villages and refresh our pool of concepts and brands.

GMCAC continued to implement various tech initiatives such as contactless self-service kiosks and Virtual Information Desks to ensure the safety and well-being of all passengers, employees, and all other stakeholders. The Typhoon Odette caused significant damages to both the terminals. Rectification and repair work was undertaken immediately to support quick resumption of services at the Airport while ensuring the safety of the passengers and users.

In line with our strategy to churn assets and redeploy capital in high growth opportunities, GMR Airports International BV (GAIBV), a stepdown subsidiary of Company holding stake in GMCAC has on September 2, 2022 entered into definitive agreements with Aboitiz InfraCapital Inc (AIC) for sale of stake, subject to necessary customary regulatory approvals. However, we would to operate as a technical

services provider to GMCAC until December 2026.

Crete International Airport

GMR Airports and its Greek partner, TERNA, signed a concession agreement with the Greek State for design, construction, financing, operation, maintenance of the new international airport of Heraklion at Crete in Greece. The concession period is 35 years including the design and construction phase of five years. Concession has commenced on February 6, 2020. With the award of this contract, GMR became the first Indian airport operator to win a bid to develop and operate a European airport. This is also GMR Group''s first foray in the European Union region.

The consortium of GMR Airports and TERNA attained the concession commencement date on February 6, 2020.

Highlights of FY 2021-22:

Physical progress - There has been significant progress on the various construction related activities. Project land has been substantially handed over to the project company and earthworks are progressing well on multiple fronts of Runway-Taxiway, Apron, Terminal building and external access Roads. Concrete works on Flood protection and drainage works are also progressing well. Foundation works are in progress for Police station building. EPC contractor has mobilized adequate manpower and equipment to site. All works are being carried out with Strict adherence to COVID-19 protocols, Safety and Quality.

In April 2021, the project SPV got ISO 9000: 2015 Quality Management Certification by TUV HELLAS.

Project funding - The project SPV received equity infusion of € 101.30 Mn on 27th January 2022. With this the project SPV has received entire committed share capital of € 175.50 Mn. SPV has also started receiving Airport Modernization and Development tax (AMDT) from May 2021 onwards and received € 26.08 Mn till March 2022.

Medan Airport

GMR participated in bid via GMR Airports Limited and its step down subsidiaries for managing, developing and improving performance of Kualanamu International Airport (KNO) which was held by Angkasa Pura II (APII). GMR was awarded the contract in November 2021 and it entered into a strategic partnership with APII. GMR will hold 49% stake in the project SPV. With the award of this contract, GMR became the first Indian airport operator to win a bid to develop and operate an Indonesian Airport. The SPV took charge of Commercial Operations on July 7, 2022.

Highlights of FY 2021-22:

The initial submission of the bid for an award of the project happened in July 2021. Post that, the top 2 bidders were called for negotiations, which lasted for approximately 3 months until the end of October 2021. The final bid submission was made on the 10th of November 2021, post which the notice of award was issued to GMR Airports

Limited on the 23rd of November 2021.

The Share Subscription Agreement (SSA) and the Shareholders Agreement (SA) were signed on 23rd December 2021 and Condition Precedents for Share Subscription Agreement effectiveness were completed on 7th March 2022. All other Condition precedents related to project documents and transition were completed for the takeover of the airport on July 7, 2022.

Airport Adjacencies:

While GMR Airports has emerged as a strong platform for both India and International concessions, as part of our platform strategy, we are proposing to strengthen the same with the addition of various adjacency businesses.

GMR Airports Limited is actively pursuing Non Aero Master Concession opportunities. Under the Master Concession contract, often various Non Aero services are bundled together including duty free & retail, car park, advertising, F&B and lounges. There has been a noticeable shift at various airports towards the master concession model due to its benefits both to the Airport and the concessionaire and GMR Airports Limited would look to leverage this opportunity.

GMR Airports Limited also acquired the license to develop and operate the cargo terminal services at new Goa Airport. The cargo facility will be operational in sync with the operations beginning at the new Goa Airport.

We also participated and got qualified in other international duty free and master concession tenders. However due to the volatile external environment and uncertainty around returns owing to COVID related risks, we decided to eventually not pursue them. However as international travel is returning back strong, we expect to witness higher business certainty in upcoming tenders.

We are currently evaluating multiple opportunities in the cargo, duty free and services business across various geographies and believe that in the short to medium term we will have more adjacency businesses to add to our overall portfolio.

Airport Land Development (ALD)Aerocity Delhi

During the FY 2021-22, DIAL effectuated the Retail and Office transactions with Bharti Realty, pursuant to Delhi Urban Art Commission (DUAC) recognizing DIAL as Local Authority for approval of building/ completion plan approval. The transaction culmination resulted into an inflow of approx. INR 1000 Cr in H1 FY 2021-22.

An international High-end Hotel Chain in India has been awarded the contract by Delhi International Airport Limited (DIAL) to develop a Hotel at the T3 Terminal of Indira Gandhi International Airport (IGIA).

In light of the pandemic affecting the Hospitality sector severely during the 1st quarter, we offered restructured payment measures to the Hospitality District Clients in Aerocity Delhi, basis which entire receivables were recovered in a timely manner.

In addition, we focused on creating a pipeline of digital marketing initiatives including WhatsApp chatbot, Aerocity magazine, Social media handles on Facebook, LinkedIn and Instagram.

Further, pre-construction activities including design & planning commenced for the various construction projects including Terminal Hotel, GA Annex and Airbus facility, which are proposed to be undertaken during FY 2022-23. Infrastructure up-gradation continued to remain a key focus during the said year.

Aerocity Delhi is expected to achieve Indian Green Building Council (IGBC) green certification in FY 2023.

Aerocity Hyderabad

Despite COVID wave gripping the start of FY 2021 -22, the execution teams at project sites continued work with full strength. Overall, it was an excellent year for project deliveries; We completed (i) Safran SAE Project; (ii) Spice Express project; (iii) Renovation of public spaces at Novotel and (iv) Revised master plan for Hyderabad Aerocity.

Aerocity brand was launched in Hyderabad in October 2021 with the intent of unifying the identities of two airports'' (Delhi and Hyderabad) real estate business. Office leasing received greater traction during the FY with approx. 90,000 sft leasing completed. Sale transaction of Amazon warehousing facility commenced in Q4 FY 2021-22 and expected to close in FY 23.

As part of our thrust on creation of social infrastructure at Hyderabad, definitive agreements were signed for with Boston Living, an incubation venture of INCOR Group, to develop co-living and serviced residences. As part of the agreement, GMR Hyderabad Aero City will lease land to Boston Living to develop 0.5 million sq. ft. space. We also signed MoU with Pallavi Education Trust for setting up of CBSE school. With this transaction, Hyderabad Aerocity has presence of both IB and CBSE school.

Further, at our Aviation SEZ, we executed agreement to lease with Skyroot for setting up ~54,000 sqft facility for assembly of small satellite launch vehicles.

In line with our commitment to extend service offerings to Clients / Partners, we inked the EPC contract for 1 million sqft of warehousing facility with GMR Logistics Park Pvt. Ltd (GLPPL). Total project cost for the said works is approx. INR 265 crores. Facility handover expected in FY 23.

In line with our commitment to maintaining Quality along with Sustainability, ALD Projects have been certified under ISO 9001, 14001 and 45001 for their design management, construction & project management and procurement modules. The Amazon facilities at Hyderabad Aerocity have already been certified as Green Buildings. Green certification for other buildings such as Tower-2, SEZ and GMR Arena are also underway.

Aerocity Goa

ALD fast-tracked its design and development activities in order to

align with the commissioning of the Mopa, Goa Airport. Conceptualized as a leisure cum hospitality driven development, the first phase of development to comprise of Retail/Commercial and Hotel/Office. The first set of monetization is expected to take place during FY 23.

Raxa Security Services Limited (RAXA)

Raxa, a pioneer in providing security services, with ISO 9001:2015, ISO 18788:2015, ISO 29993:2017 and ISO 45001:2018 certifications, is the security arm of GMR Group. Raxa was established in the year 2005 to take care of the security of the assets of national importance that the Group has created. Since 2011, apart from providing security to GMR Group assets, the company has also been providing its service to other reputed external clients. Its portfolio of clients includes renowned companies in Aviation, Manufacturing, Pharmaceutical, IT, Hospitality & Educational sectors as well as Government establishments.

Currently it employs more than 6500 security personnel. During the year, Raxa bagged contracts from some premier clients such as Escorts, Sarfran, JLL, Global Calcium, Strides, Bosch, NIINE, Caparo, Godrej Properties, Lee Pharma, Tadano, Hylcon (Pheonix), Solara, Mourya, Schnek Processs, Alsec Technologies, Molex, Amazon, NCRTC, EICI, Hindalco, Rungta Mines, Jindal.

Raxa is undoubtedly the only private security company in India that provides high level security training and has a State-of-the-Art training center, called Raxa Academy, spread over a 100-acre campus. The Academy is affiliated to MEPSC (Management & Entrepreneurship and Professional Skills Council) under the NSDC /Ministry of Skill Development and Entrepreneurship and has been accorded the recognition of "Centre of Excellence" in the security sector by MEPSC. It is a center for higher learning in security and safety and provides both short-term and long-term specialized training for various levels.

Raxa Academy has successfully implemented Learning Management System for running online courses. During the year, it has started an industry focused Corporate Security Management Course for graduates to lay the foundation of their professional career in security vertical with Corporates and private security agencies. It also conducted several short duration thematic security courses, including its flagship Advanced Management Course for senior security professionals as well as Occupational Health and Safety Course.

Apart than providing security man-power solutions, Raxa is well known in the industry for its technical security solutions. Raxa''s Technical Division provides integrated technical security solutions with latest proven technologies either independently or in association with its specialist technology partners. The scope of the solutions includes Access Control, CCTV surveillance, Fire Alarm & Public Address system, Perimeter Intrusion Detection System, Anti-sabotage and Antiterrorism measures, Command & Control Centers, etc.

Raxa has recently established a dedicated cyber division to provide digital security, in addition to physical security. It is the only security

company in India that can provide the entire range of security solutions from physical to electronic to cyber security. Together with its highly acclaimed partners, it offers wide range of cyber security solutions.

Leveraging from the expertise of GMR group in aviation and the inherent strength of Raxa in providing security solutions, Raxa has formed a dedicated consultancy division to provide consultancy services, particularly aviation consultancy.

During the year, Raxa has entered into partnership with several specialized technical/ cyber/ Drone security solution providers such as Redinent, Skyvenger, Evolv, Fluentgrid to further enhance its security capabilities. It has also established a dedicated fire division to offer end-to-end fire-fighting solutions.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Ind AS 110 -Consolidated Financial Statements read with Ind AS 28 - Investments in Associates and Joint Ventures, the audited consolidated financial statements are provided in the Annual Report.

Holding, Subsidiaries, Associate Companies and Joint Ventures

As on March 31, 2022, the Company has 25 subsidiary companies apart from 15 associate companies and joint ventures. During the year under review, GMR Airports Netherland B.V and PT GMR Infrastructure Indonesia became subsidiaries of the Company. PT GMR Infrastructure Indonesia, subsequently ceased to be the subsidiary of the Company owing to Demerger. GMR Bajoli Holi Hydropower Private Limited ceased to be subsidiary and become associate of the Company. During the year under review the entities listed in "Annexure B" to this Report have ceased to be Company''s subsidiaries or associate companies/ JVs.

The complete list of subsidiary companies and associate companies (including joint ventures) as on March 31, 2022 in terms of the Companies Act, 2013 is provided as "Annexure C" to this Report.

The Policy for determining material subsidiaries may be accessed on the Company''s website at the link: https://investor.gmrinfra.com/policies

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 as "Annexure-A" to this Report and therefore not reported here to avoid duplication.

The financial statements of the subsidiary companies have also been placed on the website of the Company at https://investor.gmrinfra.com/ annual-account-of-subsidaries.

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, 2022, 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 no. 2 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, 2022 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 are operating effectively;

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are 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 the said 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 2021-22 with related parties referred in Section 188(1) of the Companies Act, 2013 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 referred in Section 188(1) of the Companies Act, 2013 which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Since all the related party transactions were in ordinary course of business and at arm''s length basis, Form AOC-2 is not applicable.

The Policy on related party transactions as approved by the Board may be accessed on the Company''s website at the link: https://i nvestor.gmrinfra.com/policies. Your Directors draw attention of the members to Note no. 33 to the standalone financial statement which sets out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Policy (CSR Policy), of the Company indicating the activities to be undertaken by the Company, may be accessed on the Company''s website at the link: https://investor.gmrinfra.com/policies The CSR policy has been suitably amended by the Board of Directors in their meeting held on June 11,2021, to align it with amendments made in the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014.

The details of the CSR Committee are provided in the Corporate Governance Report which forms part of Board''s report.

The Company has identified the following focus areas towards the community service / CSR activities, which inter alia includes the following:

• Education

• Health, Hygiene & Sanitation

• Empowerment & Livelihoods

• Community Development

The Company, as per the approved policy, may undertake other need-based initiatives in compliance with Schedule VII to the Companies Act, 2013. For example, in the year 2021-22, the Company (through its subsidiaries) has taken up many relief measures for the Covid affected individuals and families. During the year under review, 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. However, the Company, through its subsidiaries/ associate companies, spent an amount of '' 21.04 Crores during the year on CSR activities. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Business Responsibility Report. The Annual Report on CSR activities is annexed as "Annexure D" to this Report.

Risk Management

The Company has integrated risk management process in entire value chain throughout its businesses for more than ten years. Core objective of this integration of Enterprise Risk Management (ERM) is to enable protection and enhancement of stakeholder value.

Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.

The Company has in place the Risk Management Policy duly approved by the Board of Directors. A detailed assessment of risks is presented periodically to the Risk Management Committee and the Audit Committee of the Board.

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

Internal Financial Controls

The Company has put in place policies and procedures including the design, implementation, and monitoring of internal controls over its operations to ensure orderly and efficient conduct of its businesses, including adherence to Company''s policies and procedures, safeguarding of assets, prevention and detection of fraud, accuracy and completeness of accounting records and timely preparation of reliable financial disclosures under the Companies Act, 2013.

These controls and processes have been embedded and integrated with SAP and / or other allied IT applications, which have been implemented. During the year under review, these controls were reviewed and tested by the Management Assurance Group of the Company. The Statutory Auditors of the Company have also tested the Internal Controls over financial reporting.

There were no reportable material weakness observed in the design or operating effectiveness of the controls except in few areas, where the risk has been identified as low and there is a need to further strengthen the controls. Corrective and preventive actions, as appropriate are taken by the respective functions.

Directors and Key Managerial Personnel

During the year under review, Mr. R.S.S.L.N. Bhaskarudu, Mr. N.C. Sarabeswaran, Mr. S. Sandilya, Mr. S. Rajagopal and Mrs. Vissa Siva Kameswari, who completed their second tenure as Independent Directors, on the conclusion of the 25th Annual General Meeting held on September 09, 2021, have ceased to be Directors of the Company.

During the year under review, Mr. Subba Rao Amarthaluru, Dr. Mundayat Ramachandran, Mr. Sadhu Ram Bansal, Dr. Emandi Sankara Rao and Ms. Bijal Tushar Ajinkya were appointed as Independent Directors by the members of the Company at the 25th Annual General Meeting of the Company held on September 09, 2021 with effect from that date to hold office for a term of three (3) years from the date of their appointment or upto the conclusion of the 28th Annual General Meeting of the Company, whichever is earlier. In the opinion of the Board, all the aforesaid Directors, possess integrity, expertise and experience (including proficiency) required for appointment as Independent Directors of the Company.

Mr. Madhva Terdal, who was appointed as the Whole-time Director of the Company for a term of three years with effect from August 8, 2019, upon completion of his tenure on August 7, 2022, ceased to be

Over the past few years, and particularly in post-pandemic phase, the Group has enhanced its ERM process to fulfill business needs and meet statutory requirements in a changing business environment and evolving risk landscape.

Although geopolitical changes have continued to shape global risk landscape over the past decade, recent war in Ukraine has substantially aggravated the negative impact of geopolitical risks on economies and businesses.

The Group also recognizes the importance of addressing ESG (Environment, Social and Governance) related necessities and requirements. These emerging challenges and uncertainties require a renewed approach to risk forecasting and a risk management framework that addresses the challenges in the post-pandemic business environment.

Significant developments during the year under review are as follows:

• In the post-pandemic phase, economic recovery was expected to support passenger growth. Our airports have continued to witness fast recovery in domestic traffic. This growth is expected to be sustained as further risk of pandemic has receded. Our airports however continue to face slower than expected recovery in international traffic, primarily due to cautious approach to easing of international travel in South-East Asian region.

• Russian military operations in Ukraine in February 2022, initially did not have any noticeable impact on global economy. However, as Western countries responded to Russian invasion with a wide array of sanctions against Russia, the negative impact of sanctions are now being felt across the world.

• While India continues to import crude oil from Russia despite sanctions, recent trend in depreciation of Indian Rupee may have noticeable impact on economy. Higher oil prices in recent months have aggravated the economic slowdown.

• The Senior Leadership of the company along with senior stakeholders of businesses worked closely in resolving the above issues at each business / function level and key issues were escalated to the Management Committee of the Company.

• Risk Framework and processes have undergone review and updates to factor in the changes in risk landscape in the postpandemic phase. The Group continues to work on several fronts to address the financing risks associated with the nature of its business. We have successfully raised financing for our airport assets/ projects under DIAL and GHIAL to mitigate any liquidity risks that could impact us during the pandemic. The management has continued thrust on greater cash flow from operations with greater profitability focus, asset monetisation and collection of regulatory receivables. The Company continues to work closely with lenders for debt repayment/ restructuring wherever applicable.

an Executive Director and continues to serve as a Non-Executive & Non-Independent Director of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. B.V.N Rao and Mr. Madhva Terdal, Directors retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment. The Nomination and Remuneration Committee and the Board on the basis of performance evaluation, recommends the re-appointment of Mr. B.V.N Rao and Mr. Madhva Terdal as Directors of the Company, liable to retire by rotation.

Annual performance evaluation of the Board, its Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have 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 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 has devised a Nomination and Remuneration Policy ("NRC Policy") which inter alia sets out the guiding principles for identifying and ascertaining the integrity, qualification, expertise and experience of the person for the appointment as Director, Key Managerial Personnel (KMP) and Senior Management Personnel. The NRC Policy further sets out guiding principles for the Nomination and Remuneration Committee for determining and recommending to the Board the remuneration of Managerial Personnel, KMP and Senior Management Personnel. There has been no change in NRC Policy during the year.

The Company''s Nomination and Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is available on the Company website at https://investor.gmrinfra.com/policies

Declaration of independence

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 ("Act") and Regulation 16 of SEBI LODR and there has been no change in the circumstances affecting their status as independent directors of the Company. The Company has also received a declaration from all the Independent Directors that they have registered their names in the Independent Directors Data Bank.

Further, the Independent Directors have confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and also complied with the Code of Conduct for directors and senior management personnel, formulated by the Company.


Auditors and Auditors'' Report Statutory Auditors

M/s Walker Chandiok & Co. LLP, Registration No. (001076N/N500013), were appointed as Statutory Auditors of the Company for a term of 5 (five) years from the conclusion of the 23rd Annual General Meeting held on September 16, 2019, till the conclusion of the 28th Annual General Meeting of the Company.

The Auditors'' Report does not contain any qualification, reservation, adverse remark. The notes on financial statement referred in Auditor''s Report are self -explanatory and do not call for further comment.

Pursuant to provisions of the Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor Secretarial Auditors have reported any incident of fraud to the Audit Committee or Board during the year under review.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, your Company with reference to its EPC business was required to maintain the cost records and the said cost records were also required to be audited. Your Company was maintaining all the cost records referred above and M/s Rao, Murthy & Associates, Cost Auditors, were appointed as the Cost Auditors for the FY 2021 -22.

However, pursuant to the effectiveness of the Scheme from December 31, 2021 and taking effect from the Appointed Date viz. April 1, 2021, the EPC business of the Company was demerged into GPUIL.

Since the EPC business stood vested into GPUIL with the Appointed Date i.e. April 1, 2021, the cost audit with effect from the same date of April 1, 2021 was no longer applicable for the Company and accordingly no cost audit was conducted for the FY 2021 -22.

There being no requirement for the audit of cost records for the FY 2022-23, hence no Cost Auditors were appointed by the Board for the FY 2022-23.

Secretarial Auditor

The Board had appointed M/s. V. Sreedharan & Associates, Company Secretaries in Practice, to conduct Secretarial Audit for the FY 202122. The Secretarial Audit Report of the Company as prescribed under Section 204 of the Companies Act, 2013 read with Regulation 24A of the Listing Regulations, for the FY ended March 31, 2022 is annexed herewith as "Annexure E" to this Report. The Secretarial Audit report does not contain any qualification, reservation or adverse remarks.

Further, the Secretarial Audit reports of material unlisted subsidiaries of the Company incorporated in India, as required under Regulation 24A of the SEBI LODR for the financial year ended March 31, 2022 have been annexed as "Annexure F-1 to F-2".

It may be noted that based on the audited financial statements of the Company as on March 31, 2021, the Company had 7 (seven)

material subsidiaries, incorporated in India. However, post effectiveness of the Scheme, which took effect from the Appointed Date of April 01, 2021, the Company has only 2 material subsidiaries i.e. GMR Airports Limited and Delhi International Airport Limited during the year under review.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Disclosures:CSR Committee

The CSR Committee comprises of Dr. Emandi Sankara Rao as Chairman, Mr. B.V.N. Rao and Mr. Sadhu Ram Bansal as members.

Audit Committee

The Audit Committee comprises of Mr. Subba Rao Amarthaluru as Chairman, Dr. Mundayat Ramachandran, Mr. Sadhu Ram Bansal, Dr. Emandi Sankara Rao as members.

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

Further details on the above committees and other committees of the Board are given in the Corporate Governance Report.

Vigil Mechanism

The Company has a Whistle Blower Policy, which provides a platform to disclose information regarding any purported malpractice, fraud, impropriety, abuse or wrongdoing within the Company, confidentially and without fear of reprisal or victimization. Your Company has adopted a whistleblowing process as a channel for receiving and redressing complaints from employees, directors and third parties, as per the provisions of the Companies Act, 2013, SEBI LODR and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The details of the Whistle Blower Policy is provided in the Corporate Governance Report and also hosted on the website of the Company.

Meetings of the Board

A calendar of Board and Committee Meetings is prepared and circulated in advance to the Directors. During the year, Seven (7) Board Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between two consecutive board meetings was within the period prescribed under the Companies Act, 2013 and SEBI LODR.

Particulars of Loans, Guarantees and Investments

A statement regarding Loans/ Guarantees given and Investments covered under the provisions of Section 186 of the Companies Act, 2013 is made 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 G" to this report.

Annual Return

Pursuant to Section 134 and Section 92(3) of the Companies Act, 2013, as amended, draft of the Annual Return for the financial year 2021-22 has been placed on the Company website at https://investor.gmrinfra.com/annual-reports

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 (including amendments thereto), is attached as "Annexure H" to this Report.

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), 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.

Dividend Distribution Policy

The Board has adopted Dividend Distribution Policy in terms of Regulation 43A of the SEBI LODR. The Dividend Distribution Policy is disclosed on the website of the Company at the link: https://investor.gmrinfra.com/policies

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

During the year under review, pursuant to the effectiveness of the Scheme the Authorised Share Capital of the Company stood altered from '' 1950,00,00,000 divided into 1350,00,00,000 equity shares of '' 1/- (Rupee one only) each and 60,00,000 (Sixty lakhs) preference shares of '' 1,000 (Rupees One Thousand only) each, to '' 1455,00,00,000 divided into 1355,00,00,000 equity shares of '' 1/-(Rupee one only) each and 10,00,000 (Ten lakhs) preference shares of '' 1,000 (Rupees One Thousand only) each.

There was no change in the issued and paid-up share capital of the Company.

Debentures

During the year under review, the Company has not issued and allotted debentures.

Foreign Currency Convertible Bonds

The Company, on December 10, 2015, had issued and allotted 7.5% Foreign Currency Convertible Bonds (FCCBs) aggregating to US$ 300,000,000 (United State Dollars Three Hundred Million Only) due 2075 to Kuwait Investment Authority (KIA/ Bondholder) having face value of US$ 50,000,000 each. The tenure of the FCCBs is 60 years. These FCCBs, if converted would have accounted for 111,24,16,667 equity shares of the Company.

The Hon''ble National Company Law Tribunal, Mumbai Bench vide its Order pronounced on December 22, 2021 sanctioned the Composite Scheme of Amalgamation and Arrangement (Scheme) amongst inter-alia the Company and GMR Power and Urban Infra Limited ("GPUIL"), providing inter-alia for the demerger of the Demerged Undertaking of the Company comprising of the EPC Business and the Urban Infrastructure Business, into GPUIL ("Demerger"). Pursuant to the Scheme the said FCCBs, were allocated between the Company and GPUIL based on their respective asset ratio (and other allied changes) in accordance with the provision of Section 2(19AA) of the Income Tax Act, 1961 and subject to necessary approval in the manner provided below:.

(i) the 6 FCCBs aggregating to US$ 300,000,000 were redenominated into 300 FCCBs each having a face value of US$ 1,000,000 to facilitate the allocation of the FCCBs between the Company and GPUIL pursuant to the Scheme;

ii) the FCCBs aggregating to US$ 275,000,000 were cancelled by the Company leaving FCCBs of US$25,000,000 with the Company and FCCBs aggregating US$ 275,000,000 stood vested and transferred to GPUIL;

As per terms of the original issuance, Bondholder were entitled for standard conversion price adjustment provision dealing with inter-alia rights issue, share split, bonus issue, capital distribution etc.

In order to maintain the rights of Bondholder intact consequent to split of FCCBs, the conversion price of FCCBs issued by the Company were changed so that Bondholder upon conversion receive the same number of shares as they were entitled at the time of issuance. In other words, conversion of FCCBs of US$ 25,000,000 shall account for 111,24,16,667 equity shares of the Company (as per original entitlement) and conversion of FCCBs of US$ 275,000,000 of GPUIL shall account for 11,12,41,666 equity shares of GPUIL which is effectively in the ratio in which GPUIL allotted the shares to shareholders of GIL upon Demerger i.e. 1 shares of GPUIL for every 10 shares held in GIL.

The necessary approval for the above split have been obtained.

Environment 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. The details of initiatives/ activities on environment protection and sustainability are described in Business Responsibility Report forming part of Annual Report.

Change in Name of the Company

Pursuant to the Demerger of the Non-Airport Business of the Company to GMR Power and Urban Infra Limited, the Company is now the Holding Company for predominantly the Airport Business of the GMR Group.

To reflect the above characteristic of being an airport holding company, that it has emerged post the Demerger, it was deemed appropriate to reflect the Airport Business in the name of the Company as well. Accordingly, the Board of Directors approved the change of name of the Company from "GMR Infrastructure Limited" to "GMR Airports Infrastructure Limited" subject to shareholders'' approval and other necessary statutory/ regulatory approvals.

The change of name was approved by the members of the Company by way of Special Resolution passed on August 27, 2022 through Postal Ballot.

The change of name shall become effective after the necessary approval of the Registrar of Companies, Mumbai.

Change in the nature of business, if any

Pursuant to the Scheme, the existing EPC and Urban Infrastructure Business of GIL were demerged into the GPUIL and now does not form part of the 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 Company''s operations in future.

Deposits

During the year under review, the Company has not accepted any deposit from the public. There are no unclaimed deposits/ unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.

Compliance by Large Corporates:

Your Company does not fall under the Category of Large Corporates as defined under SEBI vide its Circular SEBI/HO/DDHS/CIR/P/2018/ 144 dated November 26, 2018, as such no disclosure is required in this regard.

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.

There were no sexual harassment complaint pending or received during the year ended March 31, 2022.

Proceeding under Insolvency and Bankruptcy Code and One time settlement

During the year under review no proceedings have been initiated against the Company under Insolvency and Bankruptcy Code, 2016

and no proceedings under the Insolvency and Bankruptcy Code, 2016 were pending at the end of the year. Further during the year under review the Company has not made any one time settlement.

Other than the matters disclosed in this Report, there are no other disclosures to be made in terms of the provisions of Companies Act, 2013.

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.


Mar 31, 2018

Board''s Report

Dear Shareholders,

The Board of Directors present the 22nd Annual Report together with the audited financial statements of the Company for the financial year (FY) ended March 31, 2018.

Your Company, GMR Infrastructure Limited (“GIL”), operates in Airports, Energy, Transportation and Urban Infrastructure business sectors in India and few other countries through various subsidiaries, associates and jointly controlled entities. The Company has an Engineering, Procurement and Construction (EPC) business focusing on execution of projects of Group SPVs and external customers like Railways. The Group has acquired a prominent space in airports sector with more than 27.17% of total country''s passenger traffic being routed through the two airports managed by the Group, in addition to its presence in Philippines with an operating airport and has a noticeable presence in Energy sector, with its operations in thermal, solar sectors and project under development in hydro.

Performance highlights - FY 2017-18

Performance Highlights of your Company on consolidated basis for the FY 2017-18:

- Stellar Performance of GMR Hyderabad International Airport Limited

Financial results - FY 2017-18

(GHIAL), Joint Ventures (JVs) of Delhi International Airport Limited (DIAL) contributing significantly to the bottom line. DIAL profit declined on account of implementation of tariff order of Airport Economic Regulatory Authority of India (AERA), however through better operations DIAL could end in positive bottom line;

- Goa airport achieved financial closure and commenced construction of airport;

- Signed share purchase agreement to increase stake in GHIAL from 63% to 74%;

- Energy Sector registers turnaround - GMR Warora Energy Limited achieves net profit of Rs, 193 Crore with positive trend in settlement of regulatory dues;

- EBITDA for the year decreased by 32.36% to Rs, 2,185.90 Crore from Rs, 3,231.48 Crore of the previous year;

- Setting up an ''Aerospace & Defence Manufacturing Hub'' in Krishnagiri SIR on 600 acres of land in JV with Tamil Nadu Industrial Development Corporation (TIDCO);

- Improvement in international coal prices resulted in improved realization;

- Bajoli Holi project is in advanced stage of construction with 70% completed by March 2018.

Analysis of the Company''s audited Ind AS consolidated and standalone financial results is given below:

a) Consolidated financial results

(Rs, in Crore)

Particulars

March 31, 2018

March 31, 2017

Continuing operations

Income

Revenue from operations:

Sales / income from operations (including other operating income)

8,721.21

9,556.82

Other income

553.04

482.28

Total Income

9,274.25

10,039.10

Expenses

Revenue share paid / payable to concessionaire grantors

1,911.50

2,762.93

Operating and other administrative expenditure

4,623.81

3,562.41

Depreciation and amortization expenses

1,028.40

1,018.65

Finance costs

2,316.34

2,128.00

Total expenses

9,880.05

9,471.99

(Loss) / profit before share of (loss) / profit of associate and joint ventures, exceptional items and tax from continuing operations

(605.80)

567.11

Share of (loss) / profit of associates and joint ventures (net of dividend distribution tax)

(431.36)

(68.40)

(Loss) / profit before exceptional items and tax from continuing operations

(1,037.16)

498.71

Exceptional items - (loss) / gains (net)

(385.70)

(Loss) / profit before tax from continuing operations

(1,037.16)

113.01

Tax expenses / (credit)

45.49

744.85

(Loss) / profit after tax from continuing operations

(1,082.65)

(631.84)

EBITDA from continuing Operations (sales / income from operations - Revenue share - Operating and other admin expenses)

2,185.90

3,231.48

Discontinued operations

(Loss) / profit from discontinued operations before tax expenses

(31.96)

283.25

Tax expenses / (credit)

(0.02)

(1.13)

(Loss) / profit after tax from discontinued operations

(31.94)

284.38

(Loss) / profit after tax for the year

(1,114.59)

(347.46)

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations (Net of taxes)

(134.68)

27.54

Net movement on cash flow hedges (Net of taxes)

27.09

(16.84)

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement gains (losses) on defined benefit plans (Net of taxes)

(3.10)

(5.29)

Other comprehensive income for the year, net of tax

(110.69)

5.41

Total comprehensive income for the year, net of tax

(1,225.28)

(342.05)

(Loss) / profit for the year attributable to

(1,114.59)

(347.46)

a) Equity holders of the parent

(1,363.86)

(564.38)

b) Non-controlling interests

249.27

216.92

Total comprehensive income attributable to

(1,225.28)

(342.05)

a) Equity holders of the parent

(1,482.23)

(552.34)

b) Non-controlling interests

256.95

210.29

Earnings per equity share (?) from continuing operations

(2.24)

(1.24)

Earnings per equity share (?) from discontinued operations

(0.03)

0.30

Earnings per equity share (?) from continuing and discontinued operations

(2.27)

(0.94)

FY 2017-18 saw a mixed performance in both operating and financial parameters of the airport sector and EPC division. Airport sector overall performance declined due to reduction in aero revenue in DIAL on account of implementation of tariff order from AERA, while EPC revenues increased significantly on account of pick up in execution of Dedicated Freight Corridor (DFCC) project. There was very good growth in energy revenues, but highways revenue remained stagnant. Consolidated Revenues do not include the revenues of entities which were assessed as jointly controlled entities / JVs under Ind AS, including, GMR Energy Limited (GEL), GMR Kamalanga Energy Limited (GKEL), GMR Warora Energy Limited (GWEL) and Delhi Duty Free Services Private Limited (DDFS). Airport, Energy, Highways, EPC and other segments contributed Rs, 5418.74 Crore (62.13%), Rs, 1,533.53 Crore (17.58%), Rs, 589.70 Crore (6.76%), Rs, 931.12 Crore (10.68%) and Rs, 248.14 Crore (2.85%) respectively to the consolidated revenue from operations.

Decrease in revenue share paid / payable to concessionaire grantors was on account of lower revenue from DIAL. Increase in subcontracting expenses is mainly on account of EPC works.

b) Standalone financial results

(Rs, in Crore)

Particulars

March 31, 2018

March 31, 2017

Revenue from operations

1,106.01

1,179.77

Operating and administrative expenditure

(811.06)

(451.41)

Other Income

52.35

2.65

Finance Costs

(821.61)

(744.74)

Depreciation and amortisation expenses

(19.06)

(16.13)

(Loss)/profit before exceptional items and tax expenses

(493.37)

(29.86)

Exceptional Items:

Provision for diminution in value of investments / advances in subsidiaries / associate

(1,437.29)

(3,654.16)

(Loss)/profit before tax expenses

(1,930.66)

(3,684.02)

Tax expenses / (credit)

(0.09)

(0.09)

(Loss)/profit for the year

(1,930.75)

(3,684.11)

Net (deficit) / surplus in the statement of profit and loss - Balance as per last financial statements

(4,472.77)

(786.07)

Transfer from / (to) debenture redemption reserve

(1.76)

Re-measurement gains (losses) on defined benefit plans (Net of taxes)

0.49

(0.83)

Surplus / (Deficit) available for appropriation

(6,403.03)

(4,472.77)

Appropriations

Net deficit in the statement of profit or loss

(6,403.03)

(4,472.77)

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

(3.21)

(6.12)

During the year ended March 31, 2018, the revenue from EPC segment has increased by 87.42% from Rs, 392.77 Crore to Rs, 736.13 Crore, which was mainly on account of contribution by the ongoing DFCC (Railways) project. Other operating income of the company came down to Rs, 369.88 Crore from Rs, 787.00 Crore on account of reduction in interest income and on account of conversion of loans given to its subsidiaries / joint ventures / associates as they were into equity.

During the year ended March 31, 2018, based on an internal assessment, the Company has made a provision of Rs, 1,437.29 Crore (March 31, 2017: Rs, 3,654.16 Crore) towards diminution in value of its investment in GMR Highways Limited (GHWL), GMR Generation Assets Limited (GGAL) and GMR Aviation Private Limited (GAPL), 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 2017-18.

Reserves

The net movement in the major reserves of the Company on standalone basis for FY 2017-18 and the previous year is as follows:

(Rs,in Crore)

Particulars

March 31, 2018

March 31, 2017

Equity component of compound financial instruments

133.94

Treasury Shares

(101.54)

(101.54)

General Reserve

174.56

40.62

Securities Premium Account

10,010.98

10,010.98

Surplus in Statement of Profit and Loss

(6,403.03)

(4,472.77)

Debenture Redemption Reserve

127.20

127.20

Capital Reserve

141.75

141.75

Foreign currency monetary translation difference account

40.40

33.43

Other comprehensive income

3,990.32

5,913.61

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

Airport Sector

Your Company''s airport business comprises of 3 operating airports viz., Indira Gandhi International Airport at Delhi and Rajeev Gandhi International Airport at Hyderabad in India and Mactan Cebu International Airport in Philippines and one asset under development viz., Greenfield airport at Mopa, Goa. GMR, along with its Greek partner, was also awarded Provisional Contractor status at Heraklion Airport in Greece and now is in process of completing the documentation. The 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 another subsidiary GMR Infrastructure (Singapore) Pte. Limited.

Your Company''s aviation business comprises of GAPL, 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 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.

Highlights of FY 2017-18:

DIAL surpassed the 65 million passenger mark in FY 2017-18, witnessing a growth of ~14% in traffic over previous year with double digit growth in domestic & international traffic at 14.5% and 12.2% respectively. Delhi airport consistently crossed the 5 million passenger per month mark during the year while the maximum Air Traffic Movements (ATMs) handled per day reached 1,364. Strong growth in domestic cargo segment propelled DIAL to retain its number one position in cargo traffic in India with a 12.3% overall growth in FY 2017-18 over the previous year. During the financial year of the reporting period, the tariff for the second control period was implemented from July, 2017.

The non-aeronautical revenues continued its double digit growth led by commercial non-aero sales and DIAL was able to ramp up ~80 new outlets in retail and hospitality. DIAL launched its own Airport magazine “DIALogue” during the year.

Strong focus on developing organizational culture based on operational excellence and customer focused initiatives helped DIAL emerge as the best airport in the World among the group of airports which handle 40 million passengers per annum (mppa) category.

DIAL is also in the process of awarding development rights for the country''s first Terminal Hotel.

Key Awards and Accolades received in FY 2017-18:

- World''s best airport in the 40 million pax category for Airport Service Quality (ASQ) as rated by Airports Council International (ACI).

- Golden Peacock Award for Corporate Ethics.

- Golden Peacock Award for Occupational Health and Safety.

- Silver recognition in the ACI Asia Pacific Green Airports Award.

- Most Sustainable and Green Airport Award at Wings India.

- Network 18 and Honeywell Smart Building award for:

- Smartest Building in India

- Smartest Large Airport In India

- Greenest Building in India

- Safest Building in India

- Most Productive Building in India

- Quality Excellence Award for Best Airport Security and Best Airport Community Development at the World Quality Congress held in Mumbai.

- CII National Lean Award 2017

- Winners in Service Sector for “Deployment of Lean Practices across the Organization”

- First Runners up in the category “Deployment of Lean at Supplier''s Place”

- Winners in six categories at the Public Relations Council of India Communication Awards.

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 2017-18:

Serving 56 destinations (18 international and 38 domestic) with 17 foreign carriers and 9 domestic carriers, Hyderabad Airport has been among the fastest growing major airports in the country during 2017-18.

During the year, the strong growth momentum continued at Hyderabad Airport, with the annual passenger traffic crossing 18.3 million passengers between April 2017 - March 2018 period. Overall passenger traffic growth has been over 20% year-on-year (Y-o-Y), with domestic traffic increasing by 23% and international by 9% over the prior fiscal year. Cargo tonnage totaled 137,822 tons in fiscal year 2017-18, resulting in a Y-o-Y increase of 11%.

On the International connectivity front, new services/frequencies were added to Washington (Air India), Doha and Sharjah (IndiGo). On the domestic front several new destinations were linked, which include Trivandrum, Nagpur, Calicut, Guwahati, Surat, Patna, Shirdi etc.

FY 2017-18 also saw the airport continue its focus and leadership in the area of passenger experience and service quality, with groundbreaking new initiatives first of its kind Express Security Check for domestic passengers traveling only with hand baggage, deployment of Automated Tray Retrieval System (ATRS) for enhanced throughput at security check lanes and a host of new and improved facilities for Passengers with Reduced Mobility (PRM), senior citizens and women traveling with infants.

Hyderabad Airport was once again ranked as World Number One in ASQ survey by ACI for the calendar year 2017 in 5-15 million passenger category, marking the 9th consecutive year of Global top 3 ranking and second consecutive year of World #1 ranking in the size category.

In October 2017, GHIAL successfully raised USD-350 million bond from overseas investors at a very attractive pricing. With this, GMR Group has adopted alternate source of funding at both the operating airports in a view to rationalize borrowing costs.

On March 23, 2018, Hyderabad Airport successfully completed a decade of operations and on the same day, the foundation stone was laid for expanding the Airport''s capacity from 12 MPPA to 34MPPA in a phased manner to cater to the rapid growth of passengers travelling via Hyderabad Airport. The expansion works are presently underway and are progressing on schedule.

Awards and Accolades received in FY 2017-18:

- CAPA Chairman''s Order of Merit for Environment Sustainability.

- Golden Peacock Business Excellence Award 2017.

- ‘Excellent Energy Efficient Unit'' by CII.

- CII ‘5S Excellence Award'' for 2017.

- HMTV Business Excellence Award.

- India Travel Award - South 2017 for Destination Marketing efforts.

- CSR Excellence Award 2017 jointly by Indywood and Government of Telangana for responsible and sustainable CSR practices.

- Smart Air Cargo Port by Maritime Gateway.

- ‘Cold Chain Team of the Year'' at Cold Chain Strategy Summit & Industry Awards 2017.

- Recognized among ‘Top 26 Innovative Companies'' in CII Industrial Innovation Awards 2017.

- ‘Active Customer Engagement Award'' in the inaugural edition of CII Customer Obsession Awards 2017.

- Great Indian Workplace Award for Customer Obsession.

- First Prize for its garden maintenance in 3rd Garden Festival of Govt. of Telangana.

- ACI - Asia Pacific Green Airports Recognition under ‘Gold'' category.

- Retained ACI Airport Carbon Accreditation Level 3 (Carbon Neutral) status in the year 2017-18.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC, a JV between GMR group (40%) and Megawide Corporation (60%), 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 successfully operating the airport for nearly 42 months.

Highlights of FY 2017-18:

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, Australia, United States and the Middle East. As a result, GMCAC has seen international traffic grow by 24% while the domestic traffic has also grown at 8%. In terms of international connectivity, GMCAC has added some key routes viz., Cebu - Dubai, Cebu - Los Angeles, Cebu- Taipei, Cebu- Xiamen, Cebu- Guangzhou, Cebu - Hangzhou, Cebu -Chengdu, Cebu- Muan and Cebu-Shenzhen.

GMCAC is also steadily working towards successful operations of the new terminal. To mitigate the delay in handover of land which was under occupation of the Philippines Air Force, GMCAC had started work on the land parcels made available to it in June 2015. The structural works for the new terminal building were completed and specialized systems like Baggage handling system, Passenger Boarding bridges, Elevators and escalators had already been installed and Operation trials were completed. GMCAC was able to comply with the timelines specified in the concession agreement despite many challenges and commissioned the new terminal T2 on July 1, 2018.

GMR Goa International Airport Limited (GGIAL)

GGIAL has been granted exclusive right, license and authority to develop, operate and maintain the Mopa airport at Goa for 40 years with extension option for another 20 years. GGIAL has secured Rs.1,330 Crore loan through consortium of banks for development of First Phase of the airport at Mopa. September 4, 2017 has been set as the Appointed Date as per the Concession norms. Government of Goa (GoG) has already provided vacant access and Right of Way (RoW) to GGIAL for more than 99% of the land identified for the project. Megawide Construction Corporation (MCC) of Philippines has been selected as the EPC contractor for the project. The construction and development has commenced and the first phase of airport is expected to be operational by September 2020.

GMR Aviation Private Limited (GAPL)

GAPL owns and operates one of the youngest fleets in the country and addresses the growing need for charter services. In order to boost revenues and rationalize overhead costs, GAPL has entered into a 2 years management contract with Jet Set Go - a general aviation fleet aggregator, commonly referred to as the “Uber of the Skies”. As per the agreement, Jet Set Go has taken responsibility for operations and marketing of the aircrafts and the business has shown marked improvement over the past years with 2 aircrafts recording the highest number of hours flown on an annual basis. All maintenance contracts have also been renegotiated leading to a reduction in costs. We are confident that GAPL will continue on the turnaround path.

Energy Sector

The Energy Sector companies are operating around 4,425 MWs of Coal, Gas, Liquid fuel and Renewable power plants in India and around 2,205 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 (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.

- During the year, the Plant has achieved availability of 72% and Gross Plant Load Factor (PLF) of 71%.

- Plant achieved lower plant availability and PLF due to severe coal supply shortage across the industry.

- We expect the coal supply levels will increase during the year and more coal will be taken through alternative modes like e-auction of coal.

- Regulatory orders for Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) Power Purchase Agreement (PPA) for “change in law” was received during the year. GWEL has started billing for Change in Law to TANGEDCO.

- Weir for water availability by Maharashtra Industrial Development Corporation (MIDC) was commissioned during the year.

- Plant was awarded with many prestigious awards during the year, some of them are as below:

- “National Energy Conservation Award 2017” by Bureau of Energy Efficiency, Govt. of India & Ministry of Power.

- “IMC Ramakrishna Bajaj National Quality Award 2017 “ in service category.

- “Shrestha Suraksha Puraskar Award 2017” for effective implementation of Occupational Safety and Health management system by Hon''ble Minister of Labour and Employment, Govt. of India.

- “National Award for Excellence in Water management” by Confederation of Indian Industry.

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

- GKEL, subsidiary of GMR Energy Limited, 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 Fuel Supply Agreement (FSA) for 2.14 MTPA firm linkage from Mahanadi Coalfields Limited (MCL). GKEL secured another 1.5 MTPA long-term FSA under SHAKTI linkage auction during the year.

- CERC issued favorable order in bill dispute petition filed against Haryana and directed to release overdue claims to GKEL. This will help in easing of cash flows.

- During this period, GKEL achieved availability of 75% and PLF of 61%. Lower Availability & PLF was due to discontinuation of tapering linkage of 550 MW in FY 2017, however, now based on the new SHAKTI linkage of 1.5 MTPA availability and PLF will improve significantly.

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

- GCEL is a 1,370 MW (2 x 685 MW) pulverized coal- fired super critical technology based plant in Raipur district in the State of Chhattisgarh.

- During the year GCEL supplied 500 MW to Gujarat discom (GUVNL) under short-term case 4 bid PPA. We expect the same to be extended during FY 2019 also.

- Lenders have invoked Strategic Debt Restructuring (SDR) for GCEL. As per the SDR scheme, out of the total outstanding debt (including accrued interest) of Rs, 8,800 Crore, debt to the extent of Rs, 2,992 Crore has been converted into equity by which the consortium lenders have 52.4% shareholding and balance 47.6% is held by GMR Group.

- A process for divestment of controlling stake in GCEL initiated by the lenders under the RBI Circular dated February 12, 2018 is currently underway.

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.

- GVPGL which operated at a PLF of 9% in FY 2017 under E-RLNG scheme, did not operate in the last financial year due to scarcity of gas, lack of government initiatives and no demand from DISCOMs.

- Due to unfavorable decision in RLNG matter, other avenues for gas supply in this scenario are being explored continuously.

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

- GREL is a 768 MW (2 x 384 MW) combined cycle gas based power project at Rajahmundry, Andhra Pradesh.

- Lenders have invoked SDR. As a consequence, outstanding debt of Rs, 1,413.99 Crore (Rs, 1,308.57 Crore of principal and Rs, 105.42 Crore of interest accrued thereon) was converted into equity amounting to 55% shareholding in GREL. The balance is being held by the GMR Group.

- GREL has submitted a resolution plan to the lenders for the outstanding debt of Rs, 2,352.00 Crore which is under active consideration by the lenders.

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

- GEL owns the 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, 2018 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.

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

- GPCL, a subsidiary of GEL, owns the 200 MW diesel powered power plant and was selling power to TAGENDCO.

- Plant had long term PPA with TANGEDCO for 15 years, which was extended for additional period of one year. PPA has since expired. The plant was in preservation mode.

- The group has decided to dismantle the plant, which is presently in progress.

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

GGSPL, a wholly owned subsidiary of GEL, operates 25 MW Solar power project at Charanka village, Patan district, Gujarat. GGSPL has entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for supply of entire power generation. GGSPL has achieved commercial operation on March 4, 2012 and received certificate of commissioning from M/s. Gujarat Energy Development Agency (“GEDA”). M/s. Solarig Gensol has been awarded O&M contract for the Plant for subsequent period of 5 years. Plant has achieved a Gross DC PLF of 18% for FY 2017-18 and recorded revenue of Rs, 38 Crore for the FY 2017-18. Plant has maintained ISO 9001, 14001, 18001 certifications since June 2015.

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 January 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. M/s Enerpac has been awarded O&M contract for the Plant for a period of 5 years. Plant has achieved PLF of 14% for FY 2017-18 and recorded revenue of Rs, 0.85 Crore for the FY 2017-18.

10 GMR Generation Assets Limited (Formerly GMR Renewable Energy Limited) (GGAL), Kutch:

GGAL, a wholly owned subsidiary of the Company, commissioned a 2.1 MW wind based power plant at Moti Sindhodi Village, Kutch District, Gujarat in July 2011. GGAL has signed a 25 year PPA with Gujarat Urja Vikas Nigam Limited (“GUVNL”) with respect to the entire power generated from the Plant. M/s Suzlon has been re-awarded O&M contract for the Plant for subsequent period of 5 years.

11. GMR Power Infra Limited (GPIL), Tamil Nadu:

GPIL, a wholly owned subsidiary of GIL, commissioned a 1.25 MW wind based power plant at Muthayampatty Village, Tirupur District, Tamil Nadu in December 2011. GPIL has signed a 20 year PPA with TANGEDCO with respect to the entire power generated from the Plant. M/s. Suzlon has been re-awarded O&M contract for the Plant for subsequent period of 5 years.

B. Projects:

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

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

- GBHHPL has already achieved financial closure and tied-up the debt requirement of Rs, 1,380 Crore.

- 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 including HRT excavation, Dam Concreting and Power House Concreting along with E&M works are in full swing. Majority of the underground works like Surge/Pressure Shaft, Tunneling etc. have been completed or are in advanced stage of completion. Overall progress of 70% has been achieved till end of FY 2017-18.

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.

- Post execution of Project Development Agreement (PDA), several key activities have been completed. Technical design of the Project has been finalized post detailed technical appraisal by a seven member Panel of Experts (empaneled with IFC) and Hydraulic model studies.

- MoU for sale of power to Bangladesh executed in April 2017, in the presence of HonRs,ble PM of Bangladesh and Cabinet Minister of Government of India (GoI). PPA negotiations with Bangladesh is in advanced stage.

- EPC Bids have been received and first round technical discussions have been completed.

- Total land identified for the Project comprises of forest land and private land. As for private land, negotiation has been completed and MoU has been executed with Rehabilitation Action Plan (RAP) committees for acquisition and approx. 6 Ha of private land has been acquired till March 2018. Whereas for forest land, Deed of Agreement for forest land was executed with Department of Forest (DoF), Government of Nepal (GoN) in October 2017 post cabinet approval and tree cutting process initiated. Already acquired 12.45 Ha of forest land for infra works and tree cutting work completed.

- Power Evacuation is proposed through 400KV D/C transmission line from Bus bar of project to Bareilly Pooling point of PGCIL in Uttar Pradesh, India. Nepal portion transmission line (from project''s Bus bar up to Indo-Nepal border) to be developed by Karnali Transmission Company Pvt. Ltd. (KTCPL), a GMR Group Company and Indian portion up to Bareilly will be developed by GoI. Post execution of the Power Trade Agreement (PTA) between GoI and GoN and the SAARC energy pact between SAARC nations, cross border policy has been notified by GoI on December 5, 2016 and cross border regulations are under formulation by CERC.

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

- GBHPL, a subsidiary of GEL, is in the process of developing a 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).

- Implementation Agreement has been executed with the Government of Uttarakhand. However, the project construction is under hold on account of stay order dated May 7, 2014 by the Hon''ble Supreme Court on 24 Hydro Electric Projects (HEPs) in Uttarakhand which includes our 300 MW Alaknanda HEP.

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

- HHCPL, a subsidiary of GEL, is developing a 600 MW Upper Marsyangdi-2 Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts of Nepal.

- Binding term sheet has been executed for 100% stake sale with Chinese and Nepalese investors on an Enterprise Value basis for which Share Purchase Agreement (SPA) has been signed on May 5, 2018.

- The whole transaction is expected to be closed by September 2018.

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

GLHPPL, a subsidiary of GGAL, 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 & CC or MoEF) has recommended for Environmental Clearance and accordingly MoEF & CC had issued in-principle clearance to this project. However, formal Environmental Clearance shall be granted by MoEF & CC after obtaining the Forest- stage-I clearance. Defence clearance for setting up the project has been received from Ministry of Defence, GoI. The forest land diversion proposal is under scrutiny of MoEF & CC.

C. Mining Assets:

1. PT Barasentosa Lestari, (PTBSL):

Group holds 100% stake in PTBSL which has coal mine in South Sumatra Province with more than 393 MT Coal Resources in -23,300 Hectares and total mineable reserves of about 195 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 by barging and distressed market conditions. A conditional share purchase agreement (CSPA) was signed with PT GEMS on May 12, 2017 for sale of PTBSL. The transaction is subject to the regulatory approvals by both the parties. The parties have obtained all the major approvals and the transaction is expected to be closed by August 2018.

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

Group through its overseas subsidiary, GMR Coal Resources Pte. Limited, holds 30% stake in PT GEMS, a group company of Sinarmas 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. 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 off take coal for 25 years. GEMS earned a record profit after tax of USD 120 million, during 2017. Out of 2017 profits, GEMS has declared the interim dividend of USD75 million in 2017 and the final dividend of USD40 million in 2018 of which GMR share is USD 34.5 million. The Coal Supply Agreement (CSA) with GEMS became operational from November 2017, pursuant to the SGX approval in August 2017.

Transportation Highways

GMR Highways Limited, a subsidiary of your Company, is one of the leading highways developers in India with 7 operating highways including minority stake (36.01%) in GMR OSE Hungud Hospet Highways Private Limited (GOHHHPL). The Group is looking at ways to consolidate its presence in the sector progressively. After divestment of 14.99% stake in GOHHHPL, remaining stake sale of 36.01% is underway and shall be completed post approvals from NHAI and lenders. During FY 2018, the focus was on cash flow improvement and resolving the pending arbitration claims and filing the new ones to contest undue policy factors which have impacted the projects adversely. Sufficient progress was made in this regard.

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 an SIR at Hosur, Tamil Nadu, just 45 kms 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 & Ancillary

- Defence 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 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, truly “selfcontained”.

Project Progress:

The company made good progress in securing the clearances and is aggressively marketing the SIR for client tie-ups. During the year, the group, in a JV with TIDCO, has approached Government to consider GMR Krishnagiri SIR as a defence corridor at Hosur under the nodes recognized by the Government.

Kakinada SEZ/ SIR

GMR Group owns 51% in Kakinada SEZ Limited (KSEZ), which is developing Kakinada SEZ / SIR in the State of Andhra Pradesh in proximity to the cities of Kakinada and Visakhapatnam. With an area spanning over 10,000 acres,

Kakinada SEZ / SIR will be a 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 zones. Kakinada SEZ / SIR is designed for balancing the sensitivity to culture and heritage of the region with the economic development of the region.

Project Progress:

- Six companies (Grasim, Standard, OWS, Pals Plush, Nekkanti & Petropath) have evinced interest in establishing their manufacturing units in Kakinada and have signed MoUs with Govt. of Andhra Pradesh stating that they have chosen KSEZ''s project area for the same. Cumulatively 195 acres of land is envisaged to be used with an investment of over '' 3,000 Crore, generating employment opportunities for -6,000 people.

- Nekkanti Sea Foods Limited has signed a lease deed and started construction of its sea food processing factory in an area of 5 acres.

- M/s Devi Fisheries signed an agreement for establishing its sea food processing unit in an area of 6 acres.

- Kakinada SEZ Limited has been declared as a selected bidder for development of commercial port from the earlier permit to develop a captive port. Received Environmental Clearance Approval from MoEF for Port development. The port will have capacity of 16 MTPA containing 4 berths - 1 coal, 2 general cargo and 1 port craft berth.

- Kakinada SEZ project area has been declared as Industrial Area Local Authority, which will enable focused and seamless approvals for infrastructure & building permits.

- The Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) has constructed a 33/11 KV in-zone sub-station and the same is operational.

- A site administrative office building has been constructed and the project personnel are operating out of it.

- Developed the necessary infrastructure at site like road network, power lines etc.,

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 2014, the Group has started construction of 2 Dedicated Freight Corridor Corporation (DFCC) projects (201 and 202) in the State of Uttar Pradesh and package 301 and 302 in the states of Haryana, Uttar Pradesh and Punjab. The construction work is in full swing and significant progress has been achieved. Further, track laying work also commenced in 201 and 202. The Company also achieved substantial completion of two other smaller Rail Vikas Nigam Limited (RVNL) projects in the States of Andhra Pradesh and Uttar Pradesh that were awarded in FY 2014.

RAXA

Raxa Security Services Ltd., an ISO 9001: 2008 certified company, provides Integrated Security solution, man guarding solutions and technical security to industrial and business establishments. Raxa was established in July 2005 keeping the above requirements in view, with a mission to provide world class safety and security to Industrial and Business establishments. To enable delivery of quality services, a state-of-art security training academy was established with best in class training and administrative infrastructure on the outskirts of Bangalore. Raxa employs over 5,000 personnel and has operations across 18 states. Raxa bagged some prestigious contracts such as with British School and Tirumala Tirupathi Devasthanam (TTD), Alipiri in FY 2018. It also provided security services to important events held at Pragati Maidan and at Hyderabad.

Consolidated Financial Statement

In accordance with the Companies Act, 2013 and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 - Investments in Associates and Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

Holding, Subsidiaries, Associate Companies and Joint Ventures

GMR Enterprises Private Limited remains the holding company of the Company.

As on March 31, 2018, the Company has 118 subsidiary companies apart from 33 joint ventures and associate companies. During the year under review, the entities listed below have become or ceased to be Company''s subsidiaries or associate companies/ JVs. The Policy for determining material subsidiaries 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 and associate companies (including joint ventures) as on March 31, 2018 is provided in “Annexure - F” to this Report.

GMR Infrastructure Airports (Mauritius) Limited (GIAML) became subsidiary of the Company during the year under review. However, GIAML was amalgamated into GMR Infrastructure (Mauritius) Limited in the month of March 2018. GMR Hosur EMC Limited was amalgamated into GMR Krishnagiri SIR Limited in the month of July 2017.

The status of Asia Pacific Flight Training Academy Limited was changed to subsidiary from associate whereas the status of GMR Mining and Energy Private Limited was changed to associate from subsidiary during the FY 2017-18 .

During the year under review, East Delhi Waste Processing Company Limited ceased to be associate. Further, during FY 2017-18, PT Kuansing Intis Sejahtera and PT Bungo Bara Makmur became associates of the Company and Shanghai Jingguang Energy Co. Ltd ceased to be associate.

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 as “Annexure A” to this Report.

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, 2018, 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 no. 2 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, 2018 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 are operating effectively;

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are 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 the said 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 2018 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. Since all the related party transactions were in ordinary course of business and at arm''s length basis, Form AOC-2 is not applicable.

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 no. 33 to the standalone financial statement 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 & Sanitation

- Empowerment & 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, directly. However, the Company, through its subsidiaries/ associate companies and group companies, spent an amount of '' 31.24 Crore during the year. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Business Responsibility Report. The Annual Report on CSR activities is annexed as “Annexure B” to this Report.

Risk Management

The GMR Group''s Enterprise Risk Management (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.”

With significant changes in business environment over the last couple of years, your Company''s businesses face emerging risks that require effective risk management framework and dedicated resources to implement the framework.

Your Company''s ERM framework follows the current best practices in order to achieve Company''s objectives.

Significant developments during the year under review are as follows:

- Risk assessment was carried out in detail at bid stage for Bhogapuram International Airport (Andhra Pradesh), Belgrade International Airport (Serbia), Clark International Airport (Philippines), Bijwasan Railway Station Development (New Delhi), Hybrid-Annuity Highway projects (NHAI). The ERM made a comprehensive risk assessment on key business assumptions for the bid for enabling informed decision-making;

- ERM also carried out risk analysis for select business operations. The risk management function is also being established at the sectors with expert advice from outsourced partners.

- For the ongoing railway projects under DFCC and the new projects, ERM leads the project risk assessment in coordination with the project teams. The deployment of Project Risk Management (PRM) framework has enabled effective control over project costs.

The Group is working on several fronts to address the financing risks associated with the nature of its business.

The Company is focused on unlocking the value potential of its Airports business. In addition, the management has continued thrust on greater cash flow from operations with greater profitability focus, asset monetization and collection of regulatory receivables. Taking into account the stress in the banking sector, the Group, where market conditions are favourable, has decided to raise bonds for its financing needs as against depending on loans from the banks. We have successfully done the same at both our Delhi and Hyderabad airport operations. The Company is also working closely with lenders for two of our stressed energy projects which have undergone Strategic Debt Restructuring, to address issues keeping in view the most recent RBI guidelines.

With rapidly changing business environment, the Group feels the need for a measurable approach to decide the amount of risks it can take in achieving its business objectives. 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 Airport and Energy assets.

Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.

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

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

Internal Financial Controls

Internal financial control systems of the Company have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards.

The Company has a well-defined and documented delegation of powers (DOP) manual with specified limits for approval of expenditure, both capital and revenue. The Company has a state-of-the-art Shared Services Centre (SSC) which centrally handles payments made by the Company. While compliance with the policies are well integrated with the underlying processes, SSC acts as a second line of defence to ensure adherence to certain laid down policies.

The Company uses an established ERP system to record day to day transactions for accounting and financial reporting. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of accounts.

The Company periodically conducts physical verification of inventory, fixed assets and cash on hand and matches them with the books of account. Explanations are sought for any variances noticed from the respective functional heads.

The Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates. There are adequate policies, authorization matrices governing financial transactions and approvals.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with Statutory Auditors.

The Company in preparing financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also audited by Statutory Auditors and reviewed by the Audit Committee.

For each major element in the financial statement, the inherent reporting risks have been identified by the Company. Controls have been put to mitigate these risks. The risks and mitigation controls are revisited periodically. Corporate Integration Group (CIG) function of the Group is actively involved in designing large process changes as well as validating changes to IT systems that have a bearing on the books of account.

During 2017-18, the limited review of Company''s quarterly standalone financial statements and the year-end audit of consolidated financial statements were undertaken by its Statutory Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of the Company as well. The accounts of the subsidiary and joint venture companies were audited by their respective Statutory Auditors for consolidation.

Directors and Key Managerial Personnel

During the year under review, based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its Meeting held on November 14, 2017, appointed Mr. Vikas Deep Gupta as an Additional Director with effect from November 14, 2017 to hold office upto the date of ensuing Annual General Meeting of the Company. Accordingly, the resolution for regularization of appointment of Mr. Vikas Deep Gupta is recommended by the Board to the shareholders and forms part of notice of ensuing AGM.

During the year under review, Mr. T. Venkat Ramana was appointed as Company Secretary of the Company with effect from November 15, 2017 in place of Mr. Adi Seshavataram Cherukupalli.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Srinivas Bommidala, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible has offered himself for re-appointment.

Pursuant to the SEBI (Listing Obligations and Disclosure Requirement) Amendment Regulations, 2018, a listed entity shall not appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy five years unless a special resolution is passed to that effect, in which case the explanatory statement shall indicate the justification for appointing such person. Accordingly, the special resolution(s) for obtaining members'' approval for continuation of Mr. R.S.S.L.N. Bhaskarudu, Mr. N.C. Sarabeswaran and Mr. S. Rajagopal as independent directors beyond the age of 75 years form part of notice of ensuing AGM.

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

Mr. S Sandilya, Independent Director of the Company was named (during September 2017) in the Ministry of Corporate Affairs (MCA) list of disqualified directors for being a director in a Section 8 Company, Association of Indian Automobile Manufactures (AIAM) and for AIAM not having filed annual returns continuously for three years.

The petitioners had filed a petition in the Hon''ble High Court of Delhi challenging the MCA order which was heard on December 19, 2017. The petitioners chose to withdraw the petition based on the Condonation of Delay Scheme, 2018 (“CODS 2018'' or “the Scheme”) offered by the Ministry of Corporate Affairs in the interest of speedy resolution of the matter without any consequence and the Hon''ble High Court ordered stay on the disqualification.

Since AIAM had already filed all its overdue documents and had in terms of the Scheme, applied for condo nation of delay by filing e-form CODS with MCA, the DIN of Mr. Sandilya had been activated and his disqualification stands withdrawn permanently. Mr. S Sandilya had also resigned from AIAM Board w.e.f. March 16, 2018.

Further, the Registrar of Companies, Delhi & Haryana has confirmed that the disqualification of Mr. S Sandilya has been removed and his name would be removed from the list of disqualified Directors, as and when the same is updated by the MCA.

Annual performance evaluation of the Board, its Committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have 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.

Declaration of independence

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 Regulation 16 of SEBI LODR.

Auditors and Auditors'' Report

Statutory Auditors

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 21st AGM upto the conclusion of 23rd AGM of the Company subject to ratification of the appointment by the members at 22nd AGM.

At the 21st Annual General Meeting (AGM) of the Company held on September 29, 2017, the members approved appointment of S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W) as Statutory Auditors of the Company to hold office for a period from the conclusion of the 21st AGM of the Company till the conclusion of 23rd AGM, subject to ratification of their appointment by members at the 22nd Annual General Meeting. The Ministry of Corporate Affairs, vide its notification dated May

7, 2018, has done away with the requirement of seeking ratification of members for appointment of auditors at every Annual General Meeting. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the 22nd Annual General Meeting of the Company.

Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

1) GMR Generation Assets Limited (‘GGAL'') along with its subsidiaries/ joint ventures and associates have been incurring losses. Based on the valuation assessment carried out by an independent expert during the year ended March 31, 2018, there is a diminution in the value of the Company''s investment in GGAL as at March 31, 2018 of '' 2,830 crore. The Company has not accounted for the aforesaid diminution in the value of investment in the accompanying standalone Ind AS financial results for the quarter and year ended March 31, 2018. In the opinion of the Statutory Auditor, the aforesaid accounting treatment is not in accordance with the relevant accounting standards. Had the management provided for the aforesaid diminution, the loss after tax for the quarter and year ended March 31, 2018 would have been higher by '' 2,830 crore with a consequent impact on the reserves as at March 31, 2018.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

Considering that GCEL and GREL were under Strategic Debt Restructuring with consortium of banks acquiring majority stake, the management of the Group is not in a position to precisely assess the impact of the uncertainties on the carrying costs of various projects, though valuation assessment was done which placed the diminution at '' 2,830 Crore. Management is of the view, considering that the lenders of some of these projects are actively pursuing resolution plans to make these projects viable in the near future, the assessed diminution may significantly come down on successful implementation of resolution plans. Further in case of some of the projects, the diminution may not be permanent and significant improvements in the viability of these projects are likely in the near future. Taking in account the above factors, management is of the view that the assessed diminution need not be provided for in the standalone Ind AS financial statements for the year ended March 31, 2018.

Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

2) GMR Energy Limited (‘GEL'') and GMR Vemagiri Power Generation Limited (‘GVPGL''), joint ventures of the Company have ceased operations and have been incurring losses with a consequent erosion of net worth resulting from the unavailability of adequate supply of natural gas. GMR Rajahmundry Energy Limited (‘GREL''), a joint venture of the Company have rescheduled the repayment of project loans with the consequent implementation of the Strategic Debt Restructuring Scheme to convert part of the debt outstanding into equity and to undertake flexible structuring of balance debt for improving viability and revival of the project pending linkage of natural gas supply. Continued uncertainty exists as to the availability of adequate supply of natural gas which is necessary to conduct operations in these entities at varying levels of capacity in the future and the appropriateness of the going concern assumption of these entities is dependent on the ability of the aforesaid entities to establish consistent profitable operations as well as raising adequate finance to meet short term and long term obligations and accordingly the statutory auditors are unable to comment on the carrying value of the Company''s investment (including advances) in these entities as at March 31, 2018.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

The Management along with various stakeholders, including Central and State Governments have formulated schemes for efficient utilization of these facilities, though these efforts have not brought in permanent resolutions to the operations. The management and the Association of Power Producers continue to monitor the macro situation and are evaluating various approaches / alternatives to deal with the situation and the management of the Group is confident that Government of India (‘GoI”) would take further necessary steps / initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. Currently the lenders for GREL are actively pursuing the resolution plan as per the directives of RBI and management is confident that suitable plans would be implemented in the near future which would improve the profitability and consequently the carrying cost of these companies. Taking into account the uncertainties associated with the efforts of various stakeholders, management is not in a position to assess the impact of these measures on the carrying values.

Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

3) The Company''s internal financial control with regard to assessment of carrying value of investments in certain subsidiaries/ joint ventures as more fully explained in notes 5(4) and 5(7) to the standalone Ind AS financial statements were not operating effectively and could potentially result in the Company not providing for adjustments that may be required to be made to the carrying value of such investments.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

Qualification in the report on internal financial controls over financial reporting regarding assessment of carrying value of investments in GGAL & GEL - 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.

Statutory Auditors'' Qualification / Comment on the Company''s consolidated financial statement

1) GMR Chhattisgarh Energy Limited (‘GCEL'') and certain other entities, have been incurring losses. Based on the valuation assessment carried out by an independent expert during the year ended March 31, 2018, there exists an impairment as at March 31, 2018 of '' 2,250 crore. The Group has not accounted for the aforesaid impairment loss in the accompanying consolidated Ind AS financial results for the quarter and year ended March 31, 2018. In the opinion of statutory auditor, the aforesaid accounting treatment is not in accordance with the relevant accounting standards. Had the management provided for the aforesaid impairment loss, the loss after tax and minority interest for the quarter and year ended March 31, 2018 would have been higher by '' 2,250 crore with a consequent impact on the consolidated reserves as at March 31, 2018.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s consolidated financial statement

Considering that GCEL and GREL were under Strategic Debt Restructuring with consortium of banks acquiring majority stake, the management of the Group is not in a position to precisely assess the impact of the uncertainties on the carrying costs of various projects, though valuation assessment was done which placed the diminution at Rs, 2,250 crore. The management of the Group, including the lenders who also collectively are the majority shareholders, have initiated a process for ‘change of control'' of GMR Chhattisgarh Energy Limited (‘GCEL''), which entails sale of up to 100% equity stake of GCEL. The process is in an advanced stage and is expected that the process of change in control would be completed by August 2018. Management is of the view, considering that the lenders of some of these projects are actively pursuing resolution plans to make these projects viable in the near future, the assessed diminution, which is based on some critical assumptions made by current management, may significantly come down on successful implementation of resolution plans.

Further in case of some of the projects, the diminution may not be permanent and significant improvements in the viability of these projects are likely in the near future with various policy initiatives of the government taking shape. Taking in account the above factors, management is of the view that the assessed diminution need not be provided for in the consolidated Ind AS financial statements for the year ended March 31, 2018.

Statutory Auditors'' Qualification / Comment on the Company''s consolidated financial statement

2) GMR Energy Limited (‘GEL'') and GMR Vemagiri Power Generation Limited (‘GVPGL''), joint ventures of the Group have ceased operations and have been incurring losses with a consequent erosion of net worth resulting from the unavailability of adequate supply of natural gas. GMR Rajahmundry Energy Limited (‘GREL''), a joint venture of the Group have rescheduled the repayment of project loans with the consequent implementation of the Strategic Debt Restructuring Scheme to convert part of the debt outstanding into equity and to undertake flexible structuring of balance debt for improving viability and revival of the project pending linkage of natural gas supply. Continued uncertainty exists as to the availability of adequate supply of natural gas which is necessary to conduct operations in these entities at varying levels of capacity in the future and the appropriateness of the going concern assumption of these entities is dependent on the ability of the aforesaid entities to establish consistent profitable operations as well as raising adequate finance to meet short term and long term obligations and accordingly the Statutory Auditor are unable to comment on the carrying value of the Group''s assets (including advances) in these gas based entities as at March 31, 2018.

Management''s response to the Statutory Auditors'' Qualification /

Comment on the Company''s consolidated financial statement

The Management of the Group along with various stakeholders, including Central and State Governments have formulated schemes for efficient utilization of these facilities, though these efforts have not brought in permanent resolutions to the operations. The management of the Group and the Association of Power Producers continue to monitor the macro situation and are evaluating various approaches / alternatives to deal with the situation and the management of the Group is confident that Government of India (‘GoI”) would take further necessary steps / initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. Currently the lenders for GREL are actively pursuing the resolution plan as per the directives of RBI and management is confident that suitable plans would be implemented in the near future which would improve the profitability and consequently the carrying cost of these companies. Taking into account the uncertainties associated with the efforts of various stakeholders, management is of the view that carrying values of these projects do not require any adjustment as of date.

Statutory Auditors'' Qualification / Comment on the Company''s

consolidated financial statement

3) The tax authorities of Maldives have disputed certain transactions not considered by the management of GMR Male International Airport Private Limited (‘GMIAL''), a subsidiary of the Company, in the computation of business profit taxes and withholding tax during the period 1st April, 2013 to 31st May, 2017 and during the year ended December 31, 2017 and have issued notice of tax assessments on business profit taxes and withholding tax together with the applicable fines and penalties. The management of the Group is of the view that such disputes from the tax authorities are not tenable and have disclosed the tax exposures as a contingent liability in the accompanying consolidated Ind AS financial statements for the year ended March 31, 2018. In the absence of comprehensive analysis on the above tax exposures, the Statutory Auditor are unable to determine whether any adjustments might be necessary to the accompanying consolidated financial results for the quarter and year ended March 31, 2018. The auditors of GMIAL have qualified their audit report issued for the year ended March 31, 2018 with regard to the aforesaid matter.

Management''s response to the Statutory Auditors'' Qualification /

Comment on the Company''s consolidated financial statement

GMR Male International Airport Private Limited (‘GMIAL''), a subsidiary of the Company entered into an agreement on June 28, 2010 with Maldives Airports Company Limited (‘MACL'') and Ministry of Finance and Treasury (‘MoFT''), Republic of Maldives, for the Rehabilitation, Expansion, Modernization, Operation and Maintenance of Male International Airport (‘MIA'') for a period of 25 years (“the Concession Agreement”). On November 27, 2012, MACL and MoFT issued notices to GMIAL stating that the Concession Agreement was void ab initio and that neither MoFT nor MACL had authority under the laws of Maldives to enter into the agreement and MACL took over the possession and control of the MIA and GMIAL vacated the airport effective December 8, 2012. The matter was under arbitration. During the year ended March 31, 2017, the arbitration tribunal delivered its final award in favour of GMIAL, pursuant to which GMIAL received USD 27.10 Crore from MACL, in view of which GMIAL has recognized the difference between the claims received and the amount recorded as claims recoverable by GMIAL with regard to the aforesaid takeover. The arbitration award has clearly mentioned that the award is net of any tax applicable and GMIAL is entitled to receive the entire award amount.

During the current year, Maldives Inland Revenue Authority (‘MIRA'') has issued tax audit reports and notice of tax assessments on business profit tax computations and the withholding tax computations of GMIAL for the periods 1st April 2013 to 31st May 2017 and for the year ended March 31, 2017. However, management of the Group is of the view that the notice issued by MIRA is not tenable. Accordingly, no adjustments have been made to the accompanying consolidated financial results of the Group for the quarter and the year ended

March 31, 2018. The statutory auditor of the GMIAL have modified their Audit Report in this regard which has been continued by the auditor of the GMR Infrastructure Limited in their audit report on the consolidated financial statements.

Statutory Auditors'' Qualification / Comment on the Company''s consolidated financial statement

4) The Holding Company''s internal financial control with regard to assessment of carrying value of investments in certain joint ventures and associates as more fully explained in notes 9(b)(13)(ii), 9(b)(13)(iv) and 9(b)(13)(v) to the consolidated Ind AS financial statements were not operating effectively and could potentially result in the Group not providing for adjustments that may be required to be made to the carrying value of such investments.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s consolidated financial statement

Qualification in the report on internal financial controls over financial reporting regarding assessment of carrying value of investments in certain joint ventures and associates - 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.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, your Company with reference to its EPC business is required to maintain the cost records as specified under sub-section 1 of section 148 of the Companies Act, 2013 and the said cost records are also required to be audited.

Your Company is maintaining all the cost records referred above and M/s. Rao, Murthy & Associates, Cost Auditors, have issued a cost audit report for FY 2017-18 which does not contain any qualification, reservation or adverse remark.

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 FY 2018-19.

Accordingly, a resolution seeking members'' ratification for the remuneration to M/s. Rao, Murthy & Associates, Cost Accountants is included in the Notice convening the ensuing AGM.

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 FY 2017-18. The Secretarial Audit Report for the FY ended March 31, 2018 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 hosted on the website of the Company.

Meetings of the Board

A calendar of Board and Committee Meetings is prepared and circulated in advance to the Directors. During the year, five (5) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between two consecutive board meetings was within the period prescribed under the Companies Act, 2013.

Particulars of Loans, Guarantees and Investments

Details of Loans/ Guarantees given 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”.

Annual Return

Pursuant to Section 134 of the Companies Act, 2013, as amended vide the Companies Act, 2017, the Extract of Annual Return/ Annual Return of the Company shall be placed at the website of the Company at the following link: http://investor.gmrgroup.in/Investors/annual-report.html.

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 (including amendments thereto), is attached as “Annexure G” to this Report.

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), 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, is related to any Director of the Company.

Dividend Distribution Policy

The Board has adopted Dividend Distribution Policy in terms of Regulation 43A of the SEBI LODR. The Dividend Distribution Policy is provided as “Annexure H” and is disclosed on the website of the Company at the link: http://investor.gmrgroup.in/Investors/GIL-Policies.html.

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

There was no change in authorized, issued and paid-up share capital of the Company during the year under review.

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. The details of initiatives/activities on environmental protection and sustainability are described in Business Responsibility Report forming part of Annual 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, 2018 and Board''s Report dated August 14, 2018.

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 Company''s operations in future.

Deposits

During the year under review, the Company has not accepted any deposit 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 of during the FY ended March 31, 2018:

Number of complaints received : NIL Number of complaints disposed of : 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 14, 2018 Chairman


Mar 31, 2017

Dear Shareholders,

The Board of Directors present the 21st Annual Report together with the audited financial statements of the Company for the financial year (FY) ended March 31, 2017.

Your Company, GMR Infrastructure Limited (“GIL”), operates in Airports, Energy, Transportation and Urban Infrastructure business sectors in India and few other countries through various subsidiaries, associates and jointly controlled entities. The Company has an Engineering, Procurement and Construction (EPC) business focusing on execution of projects of Group SPVs and external customers like Railways in many infrastructure sectors like Railways, Transportation, Energy etc. The Group has acquired a prominent space in airports sector with more than 27% of total country''s passenger traffic being routed through the two airports managed by the Group and has a noticeable presence in Energy sector. The year under review was very eventful, as we had a new investor coming-in at the Energy sector and being the 1st year of Indian Accounting Standards (Ind AS) implementation.

Performance highlights - FY 2016-17

Performance Highlights of your Company on consolidated basis for the financial year 2016-17:

- Gross Debt came down significantly to '' 19,554 Crore in 2016-17 from '' 37,482 Crore in 2015-16

- Stellar Performance of Airports Sector driving the Group''s financials -Increase in Profits for both DIAL and GHIAL; DIAL and GHIAL declared dividend for the first time; Goa airport added to the portfolio

- Energy Sector registers turnaround - GMR Warora achieves net profit of '' 143 Crore for the first time

- Restructuring of Energy Sector with induction of Tenaga Nasional Berhad as Strategic Partner

- Financial results are presented under Ind AS for the first time

- EBITDA for the year increased by 16.75% to '' 3,219.97 Crore from '' 2,757.69 Crore of the previous year.

Financial results - FY 2016-17

a) Ind AS implementation

Your Company has successfully adopted Ind AS for the first time during the FY 2016-17 and the financial statements for all the group companies, including subsidiaries, joint ventures and associates have been prepared under Ind AS. Consequently, the consolidated financial results for the year ended March 31, 2016 have also been restated in accordance with Ind AS.

Consolidation principles under Ind AS are different from the earlier IGAAP, especially with respect to assessment of control of the subsidiaries and consolidation of joint ventures. Ind AS goes by substance and any entity which is under joint control of two or more shareholders is treated as jointly controlled entity and accounted as a joint venture (“JV”), irrespective of the shareholding pattern. Consequently, many of our subsidiaries have been assessed as jointly controlled entities on account of participative rights held by other partners / investors. Further, under Ind AS, JVs are accounted under equity method as against the proportionate line by line consolidation under previous IGAAP. Accordingly, only the net profit / (loss) of the JVs and associates is reported as a single line item in the statement of profit and loss.

The GAAP differences on account of differential treatment of Subsidiaries and JVs have significant impact on the financial results, which need to be taken into account while analyzing the results by stakeholders. Note no. 56 of the consolidated financial statements present reconciliation of the Net profit / (loss) of the previous year ended March 31, 2016 reported as per the previous GAAP (IGAAP) and restated Ind AS financials. Further the presentation of Statement of Profit and Loss as per Schedule III of the Companies Act, 2013 require separation of continuing and discontinued operations and this also significantly impacted the presentation of results.

Analysis of the Company''s audited Ind AS consolidated and standalone financial results is given below:

b) Consolidated financial results

(Rs, in Crore)

March 31, 2017

March 31, 2016

Continuing operations

Income

Revenue from operations:

Sales / income from operations

9,768.63

8,260.96

Other income

465.44

416.54

Total Income 1

10,234.07

8,677.50

‘excluding turnover of discontinued operations of '' 1,397.79 crore (March 31, 2016 :'' 2,556.44 crore)

Expenses

Revenue share paid / payable to concessionaire grantors

2,762.93

2,412.29

Operating and other administrative expenditure

3,785.73

3,090.98

Depreciation and amortization expenses

1,059.92

1,196.66

Finance costs

2,128.52

2,196.49

Total expenses *

9,737.10

8,896.42

‘excluding expenes of discontinued operations of '' 3,265.11 crore (March 31, 2016 : Rs, 4,663.66 crore)

Profit / (loss) before share of (profit) / loss of associate and joint ventures, exceptional items and tax from continuing operations

496.97

(218.92)

Share of (loss) / profit of associates and joint ventures (net)

(68.40)

16.17

Profit / (loss) before exceptional items and tax from continuing operations

428.57

(202.75)

Exceptional items - (loss) / gains (net)

(385.70)

(64.15)

Profit / (loss) before tax from continuing operations

42.87

(266.90)

Tax expenditure

737.03

181.51

(Loss) / profit after tax from continuing operations

(694.16)

(448.41)

EBITDA from continuing Operations (sales/income from operations - Revenue share - Operating and other admin exp)

3,219.47

2,757.69

Discontinued operations

Profit / (loss) from discontinued operations before tax expenses

336.55

(2,293.95)

Tax expenditure

6.69

6.92

Profit / (loss) after tax from discontinued operations

329.86

(2,300.87)

Total (Loss) / profit after tax for the year

(364.30)

(2,749.28)

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations

27.54

33.43

Other comprehensive income not to be reclassified to profit or loss in subsequent periods:

Re-measurement gains (losses) on defined benefit plans

(5.29)

(0.72)

Other comprehensive income for the year, net of tax

22.25

32.71

Total comprehensive income for the year, net of tax

(342.05)

(2,716.57)

(Loss) / profit for the year attributable to

(364.30)

(2,749.28)

a) Equity holders of the parent

(574.59)

(2,712.50)

b) Non controlling interests

210.29

(36.78)

Total comprehensive income attributable to

(342.05)

(2,716.57)

a) Equity holders of the parent

(552.34)

(2,679.79)

b) Non controlling interests

210.29

(36.78)

Earnings per equity share (Rs,) from continuing operations

(1.30)

(1.07)

Earnings per equity share (Rs,) from discontinued operations

0.34

(3.74)

Earnings per equity share (Rs,) from continuing and discontinued operations

(0.96)

(4.81)

Financial Year 2016-17 saw a very strong performance in both operating and financial parameters of the airport sector, which has contributed significantly to the increase in consolidated revenues. There was very good growth in energy and EPC revenues also, but highways revenue remained stagnant. Revenues don''t include the revenue of the entities which were assessed as jointly controlled entity / JV under Ind AS, including GMR Kamalanga Energy Limited (GKEL) and Delhi Duty Free Services Private Limited (DDFS). Consequent to investment by Tenaga in Energy sector, GMR Energy Limited (GEL) and its subsidiaries were assessed as JV and accordingly the revenues for 2016-17 do not include revenue of GEL and its subsidiaries, post investment by Tenaga. Airport, Energy, Highways, EPC and other segments contributed Rs, 7,080.54 Crore (72.48%), Rs, 1,485.89

Crore (15.21%), Rs, 408.49 Crore (4.18%), Rs, 380.86 Crore (3.90%) and Rs, 412.85 Crore (4.23%) respectively to the consolidated revenue from operations.

Increase in revenue share paid / payable to concessionaire grantors was on account of higher revenue from DIAL. Reduction in other operational cost, finance cost and depreciation charge was mainly on account of no consolidation of GEL and its subsidiaries post investment by Tenaga and GREL and GCHEL, post SDR.

Your Company was successful in bringing in a strategic investor Tenaga, who has invested USD 300 million in the Energy sector.

c) Standalone financial results

(Rs,in Crore)

Particulars

March 31, 2017

March 31, 2016

Revenue from operations

1,179.77

1,239.17

Operating and administrative expenditure

(451.41)

(221.61)

Other Income

2.65

16.68

Finance Costs

(744.74)

(708.31)

Depreciation and amortization expenses

(16.13)

(15.77)

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

(29.86)

310.16

Exceptional Items:

Provision for diminution in value of investments / advances in subsidiaries / associate

(3,654.16)

(2,015.73)

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

(3,684.02)

(1,705.57)

Tax expenses

(0.09)

(14.67)

(Loss)/profit before minority interest and share of (loss)/ profit of associates

(3,684.11)

(1,720.24)

Net (deficit) / surplus in the statement of profit and loss - Balance as per last financial statements

(785.56)

938.76

Transfer from debenture redemption reserve

(1.76)

(4.11)

Surplus / (Deficit) available for appropriation

(4,471.43)

(785.56)

Appropriations

(0.01)

Net deficit in the statement of profit or loss

(4,471.43)

(785.56)

Earnings per equity share (Rs,) - Basic and diluted (per equity share of Rs, 1 each)

(6.12)

(3.05)

During the year ended March 31, 2017, the revenue from EPC segment has increased by 120.65% from Rs, 178.01 Crore to Rs, 392.77 Crore, which was mainly on account of contribution by the ongoing DFCC (Railways) project. Other operating income of the company came down to Rs, 787 Crore from Rs, 1,061.16 Crore on account of reduction in interest income and on account of on conversion of loans given to its subsidiaries / joint ventures / associates as they were converted into equity.

During the year ended March 31, 2017, based on an internal assessment, the Company has made a provision of Rs, 3,654.16 Crore (March 31, 2016: Rs, 2,015.73 Crore) towards diminution in value of its investment in GMR Highways Limited (GHWL), GMR Generation Assets Limited (GGAL), GMR Aviation Private Limited (GAPL), GMR Rajahmundry Energy Limited (GREL) and 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 2016-17.

Reserves

The net movement in the major reserves of the Company on standalone basis for 2016-17 and the previous year is as follows:

(Rs, in Crore)

Particulars

March 31, 2017

March 31, 2016

Equity component of compound financial instruments

133.94

133.94

Treasury Shares

(101.54)

(101.54)

General Reserve

40.62

40.62

Securities Premium Account

10,010.99

10,010.99

Surplus in Statement of Profit and Loss

(4,471.47)

(785.57)

Debenture Redemption Reserve

127.21

125.44

Capital Reserve

141.75

141.75

Foreign currency monetary translation difference account

33.45

(0.89)

Other comprehensive income

(1.34)

(0.51)

5,913.61

9,564.24

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 developments of each of the major subsidiaries'' business is presented below. Further, MDA, forming part of this Report, also brings out review of the business operations of major 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 and one asset under development viz., Greenfield airport at Mopa, Goa. The 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 another subsidiary GMR Infrastructure (Singapore) Pte. Limited.

Your Company''s aviation business comprises of GAPL, 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 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.

Highlights of FY 2016-17:

DIAL surpassed the 57 million passenger mark in FY 2016-17, witnessing a growth of ~20% in traffic over previous year led by domestic growth of ~24%. Delhi airport crossed the 5 million passenger/month mark twice during the year while the maximum Air Traffic Movements (ATMs) handled per day reached 1,238. Strong growth in domestic cargo segment propelled DIAL to retain its number one position in cargo traffic in India with an 8% overall growth in FY 2016-17 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 continued its double digit growth led by commercial non-aero sales and land / space rentals. Delhi airport became the first airport to launch an e-shopping platform.

Strong focus on developing organizational culture based on operational excellence and customer focused initiatives helped DIAL to emerge as the 2nd best airport in the Asia Pacific region as well as the 2nd best airport in the group of airports which handle 40 million passengers per annum (mppa) category.

DIAL also successfully completed the 2nd phase of land monetization by awarding a 23 acre land parcel to Bharti Realty for an Integrated Retail development project.

Key Awards and Accolades received in FY 2016-17:

- World''s second best airport in the 40 million pax category as well as second best airport in Asia Pacific region as rated by Airports Council International.

- Best Airport Staff in India and Central Asia in 2017.

- SKYTRAX World Airport Awards for Third year in a row.

- Best Airport - Central and South Asia, FTE Asia Awards 2016.

- ‘Golden Peacock Award for Social Responsibility'' in the Aviation Transport Category in 2016.

- First Airport in Asia Pacific region to achieve Carbon Neutral Accreditation.

- First Airport in the world to adopt Green Building Monitoring Platform System - ARC.

- Platinum Rating from Indian Green Building Council for Terminal 3.

- Network 18 and Honeywell Smart Building award for -

- Smartest Airport in India

- Smartest Building in India.

- Best PR case study, Best corporate event and social media campaign of 2016 at the Public Relations Council Summit.

- Excellence in Cost Management.

- Overall Social Media Strategy Award 2016 for various travellers -friendly social media initiatives.

- Special Recognition in the 29th Quality Circle Competition by CII.

- CII National Excellence Practice Competition-2016.

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 2016-17:

GHIAL continued to record strong traffic growth in its 9th year of operation. Passenger traffic touched 15.29 million, registering a growth of 22% year on year (Y-o-Y). Similarly, Cargo also registered impressive growth to reach 123,489 MT, a growth of 9% Y-o-Y. ATMs also had a strong growth of 23% Y-o-Y, ending the year with 130,455. 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 Air Asia and Go Air launching their passenger operations. With this, all major Indian carriers have a presence at Hyderabad airport.

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. The same tariffs continued through 2016-17 with Airports Economic Regulatory Authority (AERA), still working on the consultation paper for determining tariff for GHIAL for the control period 2016-20.

To enhance the passenger experience, GHIAL has operational zed an end-to-end E-Boarding process for domestic passengers, becoming the first 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.

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 as the best airport in the world for ASQ in the 5-15 million passenger category with a score of 4.94.

With regard to real estate development, GHIAL is proud to share that Amazon has selected Hyderabad airport for setting up its fulfillment center. Further, a pharmaceutical company has also signed a long term lease with GHIAL for 33 acres of land.

Awards and Accolades received in FY 2016-17:

- World''s Best Airport 2016 in ASQ Rating by ACI, in 5-15 mn passenger category.

- “Order of Merit” awarded in the field of environment by CAPA.

- Fastest Growing Cargo Airport 2016 at India Cargo Awards - West and South.

- ASSOCHAM''s Corporate Governance Excellence Award as Runners up under the unlisted private sector category.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC, a JV between GMR group (40%) and Megawide Corporation (60%), 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 nearly 30 months.

Highlights of FY 2016-17:

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, Australia, United States and the Middle East. As a result, GMCAC has seen international traffic grow by 15% while the domestic traffic has also grown at 8.8%. In terms of international connectivity, GMCAC has added some key routes viz., Cebu - Dubai, Cebu -Los Angeles, Cebu- Taipei, Cebu- Xiamen and Cebu - Chengdu.

GMCAC is also steadily working towards development of the new terminal. To mitigate the delay in handover of land which was under occupation of the 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 nearly complete and we are confident of completing the terminal within the timelines specified in the concession agreement. One of the key features of the new international terminal being developed by GMCAC is a wooden roof - the first time such a roof is being installed in Asia.

Awards and Accolades received in FY 2016-17:

- Routes Asia Marketing award.

- CAPA Asia Pacific Regional Airport of the Year 2016.

GMR Male International Airport Private Limited (GMIAL)

GMR Group along with its partner, Malaysia Airports, was engaged in an international arbitration with Government of Maldives (GoM) and Maldives Airport Company Limited (MACL) after the latter repudiated the agreement in December 2012. Your Company is happy to report that the 3 members tribunal awarded a compensation of $270 million to the GMR-MAHB consortium covering equity, debt and termination costs incurred by GMR-MAHB consortium as a result of the repudiation of the concession by GoM. The entire compensation has been received from GoM and dues to the lenders have been settled.

GMR Goa International Airport Limited (GGIAL)

The Company, through its wholly owned subsidiary GAL, won the right to develop and operate new greenfield international airport at Mopa, North Goa through international competitive bidding. The Concession Agreement was signed with Government of Goa in November, 2016. As per the Concession Agreement, the Group will design, build, finance and operate the international airport for 40 years with extension option for another 20 years. The construction period for the first phase of the project is three years and is expected to be operational by mid of 2020. The project envisages 7.7 mn passenger capacity in Phase-1 and 232 acres of land for commercial city side development for a period of 60 years. Financial close for the project has been recently achieved.

GMR Aviation Private Limited (GAPL)

GAPL owns and operates one of the youngest fleets in the country and addresses the growing need for charter services. In order to boost revenues and rationalize overhead costs, GAPL has entered into a 2 years management contract with Jet Set Go - a general aviation fleet aggregator, commonly referred to as the “Uber of the Skies”. As per the agreement, Jet Set Go has taken responsibility for operations and marketing of the aircrafts and the business has shown marked improvement over the past years with all 3 aircrafts recording the highest number of hours flown on an annual basis. All maintenance contracts have also been renegotiated leading to a reduction in costs. We are confident that GAPL will continue on the turnaround path.

Energy Sector

The Energy Sector companies are operating around 4,600 MWs of Coal, Gas, Liquid fuel and Renewable power plants in India and around 2,330 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.

- Regulatory orders for Dadra Nagar Haveli (DNH) and Maharashtra State Electricity Distribution Company Ltd (MSEDCL) were received during the year. GWEL has started billing for Change in Law to both these customers.

- During the year, the Plant has achieved availability of 86% and Gross Plant Load Factor (PLF) of 71%.

- 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 August 2017.

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

- GKEL, subsidiary of GMR Energy Limited, and in which

IIF & IDFC also hold equity 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 was for tapering linkage. GKEL has signed Fuel Supply Agreement (FSA) for firm linkage for 500 MW and is getting coal supply accordingly.

- During this year, Ministry of Coal has discontinued the extension of MoU for coal (earlier tapering linkage) to GKEL w.e.f June 30, 2016.

- During this period, GKEL achieved availability of 84% and PLF of 65%.

- GKEL received favourable order from CERC for Change in Law in Bihar PPA, on the basis of which GKEL has raised supplementary bills of '' 33 Crore to Bihar.

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

- GCHEL, 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. GCHEL 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, 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.

- Following High Court order for Jaiprakash Power Ventures and Others, GCHEL has decided to surrender the mines asking the Govt. to return the Bank Guarantee.

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

- Further, the lenders have invoked Strategic Debt Restructuring (SDR) for GCHEL. As per the SDR scheme, out of the total outstanding debt (including accrued interest) of Rs, 8,800 Crore, debt to the extent of Rs, 2,992 Crore has been converted into equity by which the consortium lenders have 52.4% shareholding and balance 47.6% is held by GMR Group.

- Post the conversion, the balance project debt stands at Rs, 5,800 Crore with Rs, 2,992 Crore equity held by lenders and Rs, 2,721 Crore equity held by GMR Group, resulting in the debt-to-equity ratio of 1.0x. The lower debt levels would result in improving the long term viability of the project.

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.

- GVPGL won bid and operated under phase-III of E-RNLG scheme but could not sell under phase - IV power because of no demand from Discoms.

- GVPGL received refund of MAT credit of Rs, 6.88 Crore.

- Term sheet signed with GAIL for 0.9 mmscmd gas under HELP and 0.5 mmscmd natural gas in October 2016.

- Enhancement of working capital limits from Rs,75 Crore to Rs, 175 Crore from IDBI.

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

- GVPGL operated at a PLF of 9% in FY 17.

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

- GREL is a 768 MW (2 x 384 MW) combined cycle gas based power project at Rajahmundry, Andhra Pradesh.

- GREL secured gas for operations through e-bid RLNG scheme at 30% PLF for the period April 2016 to September 2016. The plant continued operations from April 2016 to September 2016 based on the roster decided by AP - Transco. 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 exploring the PPA opportunities available.

- Further, lenders have invoked SDR, with lenders owning 55% and balance being held by GMR Group. As a consequence, outstanding debt of Rs,1,413.99 Crore (Rs,1,308.57 Crore of debt and Rs,105.42 Crore of Interest accrued thereon) was converted into equity amounting to 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 owns the 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, 2017 on account of nonavailability of gas.

- Plant is kept under preservation since March 2013.

Preservation methods were adopted based on Original Equipment ManufacturersRs, (OEM) procedures.

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

- GPCL, in which GEL holds 51% stake, owns the 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.

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

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

GGSPL, a wholly owned subsidiary of GEL, operates 25 MW Solar power project at Charanka village, Patan district, Gujarat. GGSPL has entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for supply of entire power generation. GGSPL 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% for FY 2016-17 and recorded revenue of Rs,61 Crore for the FY.

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 January 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. M/s Enerpac has been awarded O&M contract for the Plant for a period of

5 years. Plant has achieved PLF of 14.35% for FY 2016-17 and recorded revenue of ''0.86 Crore for the FY. Net metering for the Plant was completed in June 2016.

10. GMR Generation Assets Limited (Formerly GMR Renewable Energy Limited) (GGAL), Kutch:

GGAL, a wholly owned subsidiary of GIL commissioned a 2.1 MW wind based power plant at Moti Sindhodi Village, Kutchh District, Gujarat in July 2011. The Company has signed a 25 year PPA with Gujarat Urja Vikas Nigam Limited (“GUVNL”) with respect to the entire power generated from the Plant. M/s Suzlon has been awarded O&M contract for the Plant for a period of 5 years and is doing the O&M for the plant.

11. GMR Power Infra Limited (GPIL), Tamil Nadu:

GPIL, a wholly owned subsidiary of GIL, commissioned a 1.25 MW wind based power plant at Muthayampatty Village, Tirupur District, Tamil Nadu in December 2011. The Company has signed a 20 year PPA with TANGEDCO with respect to the entire power generated from the Plant. M/s Suzlon has been awarded O&M contract for the Plant for a period of 5 years and is doing the O&M for the plant.

II Transmission:

GEL had entered into definitive agreements with Adani Transmission Limited agreeing to transfer its interest in Aravali Transmission Services Limited (ATSCL) and Maru Transmission Services Limited (MTSCL). The aforesaid transaction concluded in FY17.

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 has already achieved financial closure and tied-up the debt requirement of ''1,380 Crore.

- 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 Power House and Dam concreting have commenced. Overall progress of 42% has been achieved till end of FY 2016-17.

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.

- Post execution of Project Development Agreement (PDA), several key activities have been completed. Technical design of the Project has been finalized post detailed technical appraisal by a seven member Panel of Experts (empaneled with IFC) and Hydraulic model studies.

- The bid submissions for two EPC Packages; EPC-1 for Civil and HM works and EPC-2 for Electro mechanical works are expected to be completed by September 2017 in first half of FY18.

- Total land identified for the Project comprises of forest land and private land. As for private land, negotiation has been completed and MoU has been executed with Rehabilitation Action Plan (RAP) committees for acquisition and the acquisition process will start soon. Whereas for forest land, some forest land for infrastructure works has already been acquired. For

balance forest land acquisition, the coordination with the Government of Nepal is underway.

- Power Evacuation is proposed through 400KV D/C transmission line from Bus bar of project to Bareilly Pooling point of PGCIL in Uttar Pradesh, India. Nepal portion transmission line (from project''s Bus bar up to Indo-Nepal border) to be developed by Karnali Transmission Company Pvt. Ltd. (KTCPL), a GMR Group Company and Indian portion up to Bareilly will be developed by GoI. Post execution of the PTA between Government of India (GoI) and Government of Nepal (GoN) and the SAARC energy pact between SAARC nations, cross border policy has been notified by GoI on December 5, 2016 and cross border regulations are under formulation by CERC.

- The Project has received Letter of Intents (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 5, 2016. Appointment of consultants is underway. 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 a 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).

- Implementation Agreement has been executed with the Government of Uttarakhand. However, 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, is in effect till date.

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

- HHCPL, a subsidiary of GEL, is developing a 600 MW Upper Marsyangdi-2 Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts of Nepal.

- Environment Clearance for the project is already in place. PDA negotiation and execution is underway and post its completion, tender level engineering and procurement plan will be prepared.

- Power Evacuation is proposed through 400kV D/C transmission line from Bus bar of project to Gorakhpur pooling point of PGCIL in Uttar Pradesh, India. Nepal portion transmission line (from project''s Bus bar upto Indo-Nepal border) to be developed by Marsyangdi Transmission Company Pvt. Ltd. (MTCPL), a GMR Group Company and Indian portion upto Gorakhpur will be developed by GoI. Post execution of PDA and formulation of cross border regulations, MoU/PPA for power sale will be executed with selected buyers in India and Bangladesh for tie-up of power on long term route.

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

GLHPPL, a subsidiary of your Company, 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 & CC" or "MoEF") has recommended for Environmental Clearance and accordingly MoEF & CC had issued in-principle clearance to this project. However, formal Environmental Clearance shall be granted by MoEF & CC after obtaining the Forest- stage-I clearance. Defence clearance for setting up the project has been received from Ministry of Defence, GoI.

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 by barging and distressed market conditions. A conditional share purchase agreement (CSPA) was signed with PTGEMS on May 12, 2017 for sale of PTBSL. Post the approval of CSPA from Singapore Exchange and other statutory approvals, shares of PTBSL will be transferred to PTGEMS.

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

GEL through its overseas subsidiary, GMR Coal Resources Pte. Limited, had acquired 30% stake in PT GEMS, a group company of Sinarmas 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. 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 off take coal for 25 years.

Transportation Highways

GMR Highways Limited, a subsidiary of your Company, is one of the leading highways developer in India with 7 operating highways including minority stake (36.01%) in GMR OSE Hungud Hospet Highways Private Limited (GOHHHPL). During the FY 2017, the Group entered into definitive agreements to divest its entire stake (51%) in GOHHHPL and divestment of 14.99% was completed. Remaining stake sale is underway and shall be completed post approvals from NHAI and lenders. The Group also divested minority stakes in Ulunderpet Expressways Private Limited and Jadcherla Expressways Private Limited during the year. For Kishangarh-Udaipur-Ahmadabad (KUA) project which had been terminated in December 2012, a dispute notice to NHAI was served, invoking arbitration to settle the dispute. In FY17, the matters with NHAI were resolved for the KUA project.

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 kms 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 & Ancillary

- Defence 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 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, truly “self-contained”.

Project Progress:

Notwithstanding the political uncertainties in the state in the past year, the company made good progress in securing the clearances and is aggressively marketing the SIR for client tie-ups.

Kakinada SEZ/ SIR

GMR Group owns 51% in Kakinada SEZ 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 a 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 zones. 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:

- MoU with GAIL/HPCL for setting up a petrochemical complex with a proposed investment of ''40,000 Crore has been signed. Other MoUs have also been signed with Deepak Nitrate, DCM Shriram, IIFT among others.

- Regarding our plans to develop Port for the SEZ, public hearing was successfully held and the implementation plan is on right track.

- Executed lease deeds with AP Transco and Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) for substations.

- Approach roads to existing industries has been completed.

- 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.

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 (201 and 202) in the State of Uttar Pradesh. Mobilization and design for the projects is substantially completed and construction is in full swing. In the Package 201, the construction progress achieved is 18% whereas in the Package 202, the progress is 11%. Your Company has successfully completed the Kasauli Housing project in the FY 2016-17 and 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.

Your Company also won two more packages worth '' 2,280 Crore on the Eastern Dedicated Freight Corridor railway project in FY 2016-17. The first package comprises 175 km single line connecting Sahnewal and Pilkhani that passes through Uttar Pradesh, Haryana and Punjab. The other package is a 46 km double line corridor in Uttar Pradesh connecting Dadri and Khurja.

Consolidated Financial Statement

In accordance with the Companies Act, 2013 and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 - Investments in Associates and Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

Holding, Subsidiaries, Associate Companies and Joint Ventures

Pursuant to the order of Hon''ble Madras High Court, conforming a Scheme of Amalgamation, GMR Holdings Private Limited (GHPL) was merged with GMR Enterprises Private Limited (GEPL) with an appointed date of March

30, 2015. Accordingly, GEPL became the Holding Company in place of GHPL.

As on March 31, 2017, the Company has 119 subsidiary companies apart from 33 joint ventures and associate companies. During the year under review, the entities listed below have become or ceased to be Company''s subsidiaries or associate companies/ JVs. The Policy for determining material subsidiaries 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 and associate companies (including joint ventures) as on March 31, 2017 is provided in Section III of Annexure - F to this Report (Extract of Annual Return).

Kakinada Gateway Port Limited, GMR Goa International Airport Limited, GMR SEZ Infra Services Limited and GMR Infra Developers Limited became subsidiaries during the FY 2016-17.

Aravali Transmission Service Company Limited, Maru Transmission Service Company Limited and GMR Airport Global Limited ceased to be subsidiaries during FY 2016-17. Hyderabad Duty Free Retail Limited, a subsidiary, was merged with GMR Hotels and Resorts Limited, also a subsidiary of your Company.

Further, the names of GMR Airport Handling Services Company Limited and GMR Hyderabad Multiproduct SEZ Limited were struck off from the list of companies by Registrar of Companies during the FY 2016-17 and accordingly they ceased to be subsidiaries. GMR Highway Projects Private Limited is in the process of striking off. Further, GMR Chhattisgarh Energy Limited and GMR Rajahmundry Energy Limited ceased to be subsidiaries and became associates during the year under review.

During the year under review, Jadcherla Expressways Private Limited and Ulundurpet Expressways Private Limited ceased to be associate.

During the year under review, as per the accounting principles of newly adopted Ind AS, the status of GMR Energy Limited and its subsidiaries including GMR Kamalanga Energy Limited, GMR Warora Energy Limited, Himtal Hydro Power Company Private Limited, GMR Upper Karnali Hydropower Limited, GMR Vemagiri Power Generation Limited, GMR (Badrinath) Hydro Power Generation Private Limited, GMR Energy (Mauritius) Limited, GMR Lion Energy Limited, GMR Consulting Services Limited, GMR Bajoli Holi Hydropower Private Limited, GMR Maharashtra Energy Limited, GMR Bundelkhand Energy Private Limited, GMR Rajam Solar Power Private Limited, GMR Gujarat Solar Power Limited, Karnali Transmission Company Private Limited, Marsyangdi Transmission Company Private Limited, GMR

Indo-Nepal Energy Links Limited and GMR Indo-Nepal Power Corridors Limited and few other entities including Delhi Duty Free Services Private Limited, GMR Chhattisgarh Energy Limited, GMR Rajahmundry Energy Limited and GMR Mining and Energy Private Limited was assessed as jointly controlled entities.

Further, PT Era Mitra Selaras, PT Wahana Rimba and PT Berkat Satria Abadi became Joint Ventures to the Company during the FY 2016-17.

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 as “Annexure A” to this Report.

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, 2017, 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 no. 2 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, 2017 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 the said 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 2017 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. Since all the related party transactions were in ordinary course of business and at arm''s length, hence, Form AOC-2 is not applicable.

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 no. 33 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 & Sanitation

- Empowerment & 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, directly. However, the Company, through its subsidiaries/ associate companies, spent an amount of ''38.27 Crore during the year. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Business Responsibility Report. The Annual Report on CSR activities is annexed as “Annexure B” to this Report.

Risk Management

The GMR Group''s Enterprise Risk Management (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.”

With significant changes in business environment over the last couple of years, your Company''s businesses face emerging risks that require effective risk management framework and dedicated resources to implement the framework.

Your Company''s ERM framework follows the current best practices in order to achieve Company''s objectives.

Significant developments during the year under review are as follows:

- Risk assessment was carried out in detail at bid stage for Mopa International Airport (Goa) and Navi Mumbai International Airport. Key Risk Areas were also identified for Kastelli International Airport (Greece). The ERM made a detailed risk assessment on key business assumptions for the bid for enabling informed decision-making;

- ERM also carried out risk analysis for select business operations. The risk management function is also being established at the sectors with expert advice from outsourced partners.

- For the ongoing railway projects under Dedicated Freight Corridor Corporation in UP and the new projects, ERM leads the project risk assessment in coordination with the project teams. The deployment of Project Risk Management (PRM) framework has enabled effective control over project costs.

With rapidly changing business environment, the Group feels the need for a measurable approach to decide the amount of risks it can take in achieving its business objectives. 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 Airport and Energy assets.

Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.

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

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

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

During the year under review, 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 were re-appointed as Independent Directors of the Company for a second term for a period of five years or upto the conclusion of Twenty Fifth Annual General Meeting (AGM) of the Company, whichever is earlier.

During the year under review, Dr. Prakash G. Apte and Mr. V. Santhanaraman ceased to be the Independent Directors with effect from September 14, 2016 consequent upon completion of tenure of their appointment.

Further, Mr. Jayesh Desai was regularized (i.e., as Director from Additional Director) by the members at the 20th AGM of the Company held on September 14, 2016. However, during the year, Mr. Jayesh Desai resigned from the directorship of Company with effect from February 13, 2017.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. G.M. Rao, Executive Chairman of the Company, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible has offered himself for re-appointment.

Further, the Nomination and Remuneration Committee has recommended the re-appointment of Mr. G.M. Rao, Executive Chairman and Mr. Grandhi Kiran Kumar, Managing Director of the Company, for a further period of 3 years respectively. Subsequently, Board at its meeting held on August 11, 2017 has recommended the said re-appointments.

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

Annual performance evaluation of the Board, its Committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have 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.

Declaration of independence

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 Regulation 16 of SEBI LODR.

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.

In terms of Section 139(1) of Companies Act, 2013 read with Rule 6 of Companies (Audit and Auditors) Rules 2014 (including any amendments thereto), the Board, on recommendation of Audit Committee, has recommended the appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants as the Statutory Auditors of the Company to hold office from the conclusion of ensuing AGM up to the conclusion of 23rd AGM of the Company.

A resolution proposing appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants as Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice for the ensuing AGM.

Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

GMR Hyderabad Vijayawada Expressways Private Limited (GHVEPL) has been incurring losses since the commencement of its commercial operations. Based on a valuation assessment, a legal opinion and for reasons explained in the said note, the management of the Company believes that no further provision for diminution in the value of investments is considered necessary in the accompanying standalone Ind AS financial results for the quarter and year ended March 31, 2017. We are unable to comment on the final outcome of the matter and its consequential impact on the carrying value of the Company''s investment in GHVEPL in the accompanying standalone Ind AS financial results of the Company.

Management''s response to the Statutory Auditors'' Qualification / Comment on the Company''s standalone financial statement

GHVEPL has been incurring losses since the commencement of its commercial operations. The management believes that these losses are primarily due to loss of revenue arising as a result of drop in commercial traffic on account of bifurcation of State of Andhra Pradesh and ban imposed on sand mining in the region. The management of GHVEPL based on its internal assessment and a legal opinion, believes that these events constitute a Change in Law as per the Concession Agreement and GHVEPL is entitled to a claim for losses suffered on account of the aforementioned reasons and accordingly filed its claim of ''222.79 Crore for the loss of revenue till the year ended March 31, 2016 with NHAI. Subsequently, NHAI rejected the aforementioned claims and consequently GHVEPL invoked dispute resolution process as per the provisions of the Concession Agreement. Subsequently, NHAI has intimated GHVEPL that conciliation has failed and the management of GHVEPL has initiated arbitration proceedings.

GHVEPL has also issued notice of force majeure (Political Event) as per article 34 of the Concession Agreement vide its letter dated June 13, 2016. Based on the preliminary discussions with NHAI, the management is confident that matter will be amicably settled and the loss on account of Change in Law will be received in due course.

The management of GHVEPL is confident that it will be able to claim compensation from the relevant authorities for the loss it suffered due to aforementioned reasons and based on valuation assessment carried out by an external expert, which is significantly dependent on the fructification of the aforesaid claims, believes that the carrying value of its investments in GHVEPL (net of provision for diminution in the value of investments) as at March 31, 2017 is appropriate.

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.

M/s. Rao, Murthy & Associates, Cost Auditors, have issued cost audit report for FY 2016-17 which does not contain any qualification, reservation or adverse remark.

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 FY 2017-18.

Accordingly, a resolution seeking members'' ratification for the remuneration to M/s. Rao, Murthy & Associates, Cost Accountants is included in the Notice convening the ensuing AGM.

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 FY 2016-17. The Secretarial Audit Report for the FY ended March 31, 2017 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 hosted 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 given 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” to this Report.

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 (including amendments thereto), is attached as “Annexure G” to the said Report.

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), 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, is related to any Director of the Company.

Dividend Distribution Policy

During the year under review, the Board has adopted Dividend Distribution Policy in terms of Regulation 43A of the SEBI LODR. The Dividend Distribution Policy is provided as “Annexure H” and is disclosed on the website of the Company at the link: http://investor.gmrgroup.in/Investors/GIL-Policies. html.

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

There was no change in authorized, issued and paid-up share capital of the Company during the year under review.

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. The details of initiatives/activities on environmental protection and sustainability are described in Business Responsibility Report forming part of Annual 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, 2017 and Board''s Report dated August 11, 2017.

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 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 of during the FY ended March 31, 2017:

Number of complaints received : NIL Number of complaints disposed of : 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 11, 2017 Executive Chairman


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


Mar 31, 2012

The Directors have pleasure in presenting the 16th Annual Report together with the audited accounts of your Company for the year ended March 31, 2012.

Financial Results

Your Company, as a holding company, operates in different business sectors like Energy, Airports, Highways and Urban Infrastructure. Engineering,

Procurement and Construction (EPC) business is a separate operating division which mainly caters to the requirements for implementing projects undertaken by subsidiaries.

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, 2012 March 31, 2011

Revenue from operations 8,473.03 6,465.26

Revenue share paid / payable to concessionaire grantors (830.97) (651.26)

Operating and administrative expenditure (5,883.83) (4,258.51)

EBITDA 1,758.23 1,555.49

Other Income 243.42 311.30

Interest and Finance Charges (1,653.13) (1,230.06)

Utilisation fees (98.71) (71.92)

Depreciation / Amortisation (935.81) (789.00)

Exceptional Items :

Provision for diminution of investment - (938.91)

Amounts written off in earlier years written back - 140.33

Interest on loans against development fund (162.12) -

Provisions for taxation (including deferred tax, MAT credit entitlement) (210.72) (23.90)

Profit/(loss) after tax and before minority interest and share of profits / (losses) from associates (PAT) (1,058.84) (1,046.67)

Share of profits / (losses) of associates - (3.46)

Minority Interest – (profits) / losses 455.50 120.49

Profit/(loss) after tax and after minority interest and share of profit / (losses) from associates (603.34) (929.64)

Surplus / (Deficit) brought forward from previous year (79.15) 895.61

Profit / (Loss) available for appropriation (682.49) (34.03)

Appropriations / adjustments (31.68) (45.12)

Available surplus/(deficit) carried to balance sheet (714.17) (79.15)

Earnings per share (Rs.) (Face value of Re. 1/- each) - Basic and Diluted (1.55) (2.40)

Consolidated revenue from operations grew by 31.05 % from Rs. 6,465.26 Crore to Rs. 8,473.03 Crore. Airport, Energy, Highways, EPC and other segments contributed Rs. 4,381.29 Crore (51.71%), Rs. 2,374.99 Crore (28.03%), Rs. 405.64 Crore (4.79%), Rs. 970.89 Crore (11.46%) and Rs. 340.22 Crore (4.01%) respectively to the revenue from operations.

EBITDA grew by 13% from Rs. 1,555.49 Crore to Rs. 1,758.23 Crore. Short supply of gas and non-recognition of Rs. 100 Crore of revenues from Air India impacted the earnings in the energy and airport sector respectively. Losses in DIAL of Rs.573 Crore after minority interest due to non revision of aero tariffs, proportionate operating losses of Istanbul Airport (Rs. 105 Crore, 40% share) and losses in Energy sector due to limited availability of gas resulted in a consolidated loss of Rs.603.34 Crore after minority interest (Loss of Rs.929.64 Crore last year).

Presented below are the standalone financial results of your Company:

(Rs. in Crore)

Particulars March 31, 2012 March 31, 2011

Revenue from operations 1,381.87 727.40

Operating and administrative expenditure (1,084.50) (487.84)

EBITDA 297.37 239.56

Other Income 48.41 5.46

Interest and finance charges (197.35) (174.14)

Depreciation (7.58) (4.91)

Profit before tax 140.85 65.97

Provisions for taxation (including deferred tax and MAT credit entitlement) (20.55) (7.09)

Profit after tax 120.30 58.88

Surplus brought forward from previous year 298.64 277.48

Amount available for appropriation 418.94 336.36

Appropriations

Debenture redemption reserve (36.57) (37.72)

Surplus carried to balance sheet 382.37 298.64

Earnings per share (Rs.) - Basic and Diluted 0.31 0.15

The revenue from operations of your Company has gone up by 90% from Rs. 727.40 Crore to Rs. 1,381.87 Crore on account of increased revenue to the extent of Rs. 583.67 Crore from EPC segment. Growth in the operations of the EPC segment is also the key contributor for the increase in operating and administrative expenditure from Rs. 487.84 Crore to Rs. 1,084.50 Crore. The increase in borrowings from Rs. 2,376.08 Crore to Rs. 2,960.13 Crore to meet the increased requirement of funds for investments in subsidiaries is the reason for the increase in interest expenditure from Rs. 174.14 Crore to Rs. 197.35 Crore.

Dividend

Your Company currently has various projects under implementation and in order to fund these projects in their development, expansion and implementation stages, conservation of funds is of vital importance. Surpluses generated in completed projects are being utilised for funding the projects under implementation. Therefore, your Directors have not recommended any dividend for the financial year 2011-12.

Subsidiary Companies

Your Company carries its business operations through various subsidiary, joint venture and associate companies mainly due to the requirement of concession agreements. As on March 31, 2012, your Company had 128 subsidiary companies apart from other joint venture and associate companies. The complete list of subsidiary companies as on March 31, 2012 is provided in Annexure 'A' to this report.

Review of Operations/Projects of Subsidiary Companies

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 the Report, also brings out a brief review of the business operations of various subsidiaries, joint ventures and associates.

Airport Sector

Airports business of your Company consists of two operating airports in India at New Delhi and Hyderabad, and two airports abroad at Istanbul, Turkey and Malé, Maldives. Significant developments in each of these assets during the year are briefly presented 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 Frankfurt Airport Services Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private Limited (10%) and has entered into a long-term agreement with AAI to operate, manage and develop the Indira Gandhi International Airport (IGIA), New Delhi.

IGIA recorded passenger traffic of 35.88 million in 2011-12, which is an overall growth of 20% over the previous year. Cargo at IGIA witnessed a decline of 5% in line with global trend and was 568,354 MT during the year.

The significant developments during the year were:

- Ranked top in the total passengers handled by Indian airports;

- Completed the first full year of its commercial operations with the new terminal, T3 and other newly created facilities;

- Started construction of the new ATC tower;

- Introduced automated truck control system and bonded tracking services for cargo movement;

- Handled five new international destinations (Manila, Baghdad/Basra, Dushanbe, Hangzhou and Tehran) and two new domestic destinations (Allahabad and Gaya) to the network;

- Handled successfully cargo movement related to the first Formula 1 racing in India.

GMR Hyderabad International Airport Limited (GHIAL) GHIAL is a joint venture Company promoted by the GMR Group (63%) in partnership with Airports Authority of India (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 8.6 Million in 2011-12, which is an overall growth of 12.68% over 2010-11, with domestic passenger traffic increase by 16.40% and the international passenger traffic growth by 1.26%; cargo grew only by 0.86% over the previous year reaching a volume of 81,474 MT during the year.

The key highlights for the year were:

- Rated as the 3rd best airport in Airport Council International (ACI) Airport Service Quality (ASQ) survey in 5-15 million Passenger Per Annum category;

- Lufthansa Cargo certified RGIA to be one of its key cargo hub in South Asia for transport of temperature sensitive pharmaceuticals;

- Directorate General of Civil Aviation (DGCA) accorded approval for conversion of parallel taxiway as standby runway;

- RGIA became the second airport in India and the third in Asia to complete the verification of Greenhouse Gas (GHG) accounting of the airport operations as per ISO 14064-1:2006;

- Conversion of the aviation sector specific SEZ into an SEZ within airport was approved by the SEZ Board of Approvals.

GMR Malé International Airport Private Limited (GMIAL) Ibrahim Nasir International Airport is a Brownfield airport in Malé, 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%).

GMIAL recorded passenger traffic of 2.7 Million in 2011-12, which is an overall growth of 14% over 2010-11 with domestic traffic growth at 39% and International traffic growth at 11%. Cargo traffic declined by 1.5% over 2010-11.

The key highlights for the year were:

- New services by Etihad, Hainan and Alitalia airlines had started to cater to growing tourist interest from China and Russia;

- Achieved ASQ Score of 3.54 on a scale of 5;

- Received ISO Certification (9001, 14001, 10002) and also implemented SAP;

- Initiatives undertaken for improvement in passenger services by introducing lounges among others.

Istanbul Sabiha Gokcen International Airport (ISGIA) ISGIA is promoted and developed by the consortium consisting of GMR Group (40%), Limak Holding (40%) and Malaysia Airports Holdings Berhad (20%). ISGIA has the rights to operate the terminal buildings, multi-storey car park, cargo, aircraft refueling operations, airport hotel and CIP facilities in the airport for 22 years beginning from May 2008. The terminal has a capacity to handle up to 25 million passenger per annum.

ISGIA recorded total passengers of 13.7 million in calendar year 2011, which corresponds to an 18% annual increase in total passenger traffic. Cargo traffic increased by 5% over 2010-11.

The key highlights for the year were:

- ISGIA commenced 8 new airlines flights during the year;

- Technical drawings and plans of ISGIA 2nd runway were finalised and approved, land expropriation is near completion;

- ISGIA served the Formula 1 racing from 6th – 8th May 2011 being closest airport to the race track.

Aviation Business

GMR Aviation Private Limited (GAPL) is a 100% subsidiary of GMR

Infrastructure Limited and was formed in December, 2006.

GAPL operates and owns one of the youngest fleet in the country addressing the growing need for charter services in the country. During the year under review, the external charter business has increased. Special emphasis has been put in place to ensure that all operating assets are profitable and self- sustainable.

Optimum utilisation of the existing fleet was made during the entire year and utilisation rate of aircraft has been one of the highest in the industry. It is expected that growth in charter business would gain momentum in the coming quarters.

Aircraft – Maintenance, Repair and Overhaul During the year under review, your Company made foray into the business of Maintenance, Repair and Overhaul (MRO) of narrow and wide bodied aircraft. The MRO facility is operated by MAS GMR Aero Technic Limited 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.

MAS GMR Aero Technic Limited was inaugurated on March 13, 2012 by Minister of Civil Aviation.

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.

Energy Sector

The year under review has been a significant year for the Energy Sector of your Company which now has six operating assets and eleven projects under different stages of construction or development.

Operating Assets

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

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

New initiatives

- Your Company acquired 30% stake in Golden Energy Mines TBK, Indonesian Coal Company with operating mines. As the domestic supply of coal to power plants has become unreliable and inadequate, this acquisition would insulate and provide fuel security to the coal- based power units coming up for commissioning.

- Your Company has made foray into renewable energy by successfully commissioning a 25 MW solar power unit and two wind mills of 2.1 MW and 1.25 MW.

Operating Assets update

- Vemagiri plant was successfully registered for clean energy benefits under Clean Development Mechanism of United Nations Framework Convention on Climate Change;

- Chennai plant achieved SA-8000 (Social Accountability) and ISO 50001 (Energy Management) certifications.

Projects update

- Achieved Financial Closure of GMR Energy (Singapore) Pte. Limited;

- Achieved Financial Closure of Maru and Aravali transmission projects;

- Environment clearance received for Kamalanga plant expansion;

- Megapower status obtained for Kamalanga and Chhattisgarh plant (provisional);

- Project execution at Kamalanga, EMCO, Singapore Island Power and Chattisgarh plants are progressing as per plan and Kamalanga and EMCO plants are expected to be commissioned in FY 2012-13;

- Project execution at Rajahmundry plant is completed to a large extent and balance works would be completed, subject to gas availability.

Further, your Company is on track to implement several other projects which are under different stages of development. These projects are one coal-based 1370 MW SJK Powergen project and five hydroelectric power projects - (i) 300 MW Alaknanda power project on the Alaknanda River in the State of Uttarakhand; (ii) 160 MW Talong power project in East Kameng district in the State of Arunachal Pradesh; (iii) 180 MW Bajoli Holi project in Himachal Pradesh; (iv) 600 MW Upper Marsyangdi power project in Nepal; and (v) 900 MW Upper Karnali power project in Nepal.

Highways Sector

During the financial year under review, your Company has won the project for six-laning of 555.5 Km long Kishangarh – Udaipur – Ahmedabad (KUA) highway through international competitive bidding. This project is the first mega highway project of the country and will be implemented through the Public Private Partnership (PPP) on Design, Build, Finance, Operate and Transfer (DBFOT) model under National Highway Development Project-V. The Concession Agreement for the Project was signed on November 30, 2011 and the financial closure was achieved on May 24, 2012. In addition, your Company is also expected to start collection of toll in two other projects in FY 2012-13 which are currently under development namely Hyderabad- Vijayawada and Hungund-Hospet projects. The overall highways portfolio of the Company comprises the following:

Operating Assets:

- Tuni–Anakapalli (Annuity);

- Tambaram–Tindivanam (Annuity);

- Adloor Yellareddy–Gundla Pochanpalli (Annuity);

- Ambala– Chandigarh (Toll);

- Thondapalli–Jadcherla (Toll); and

- Tindivanam –Ulundurpet (Toll).

Projects under implementation in the Highways sector are:

- Chennai Outer Ring Road (Annuity);

- Hyderabad – Vijayawada (Toll);

- Hungund–Hospet (Toll); and

- Kishangarh–Udaipur –Ahmedabad (New Project Toll).

Urban Infrastructure Krishnagiri & Kakinada SEZs

The Company is developing large industrial area and Special Economic Zones at Krishnagiri district in the state of Tamil Nadu, in collaboration with Tamil Nadu Industrial Development Corporation. Krishnagiri SEZ is expected to cater to Engineering, Defense and other Hi-tech industries. The Company acquired majority stake in Kakinada SEZ Private Limited and is developing the area as a Special Investment Region. Development of conceptual master- plan is underway.

Engineering, Procurement & Construction (EPC)

The Company had entered the EPC business to mitigate execution risk in new project development. EPC Division is now contributing significantly in developing the new Highway assets. Besides the Highways project, EPC Division has also made foray into Energy Thermal projects and is executing the construction of Coal Handling Plant at one of GMR's thermal energy projects. EPC Division has also undertaken construction of township, non- plant structures and miscellaneous works at another energy project.

Risk Management

Your Company is exposed to a number of risks, if these materialise, it could have varying degrees of impact on the various businesses and sectors that we operate in. The Group realises this and therefore it's enterprise risk management framework and processes have been made robust to identify and address risks and also leverage opportunities so as to ensure achievement of its business objectives.

Significant developments during the year include:

- Preparing risk and opportunity profile of different countries/continents being explored by the Group for investment in infrastructure and resource opportunities;

- Detailed risk analysis (quantitative as well as qualitative) for new bids/ opportunities pursued by the Group;

- Business Continuity Planning and Disaster Recovery Planning for key assets/locations;

- Risk review of important policies impacting the Group such as treasury policy, foreign exchange policy, code of conduct, whistleblower policy, among others;

- Top risks at the Group, Sector and Business Unit level are regularly being profiled for treatment and regular monitoring of risks;

- Strengthened the culture of risk awareness amongst employees through Risk Newsletters, regular updates on risks, case studies and training programmes.

The role of Enterprise Risk Management (ERM) starts with and also ends with the Company's Strategic and Annual Operating plan exercise. The various risks to objectives set at the start of the year identified through the year, serve as a key input to the Annual Planning Exercise for subsequent year. Besides the Management Assurance function draws upon the risk list to develop a Risk Based Audit Plan for the forthcoming year.

The ERM Team presents to the Management and the Audit Committee of the Board, the status and implementation of the risk management framework in the group and the outputs therein 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 your Company is provided in Management Discussion and Analysis.

Developments in Human Resources and Organisation Development

Your Company has robust process of human resources development which is described in detail in Management Discussion and Analysis 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, Profit and Loss account 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 2011-12 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 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 your Company and its subsidiaries, joint ventures and associates, form part of the Annual Report.

Changes in Share capital

During the year under review, there are no changes in the share capital structure of your Company.

Directors

Mr. Srinivas Bommidala, resigned as the Managing Director with effect from October 1, 2011. The Board places on record, its appreciation for the valuable contribution made by Mr. Srinivas Bommidala during his tenure as the Managing Director of the Company.

Mr. B. V. N. Rao has been appointed as the Managing Director of the Company with effect from October 1, 2011 for a period of five years subject to the approval of the members at the Annual General Meeting.

Mr. Srinivas Bommidala retires by rotation as a Director and being eligible, offers himself for reappointment at the Annual General Meeting. Further, Mr. Arun K. Thiagarajan, Mr. Uday M. Chitale and Mr. Udaya Holla, Directors, retire by rotation at the Annual General Meeting and they have expressed their desire not to offer themselves for reappointment in line with the Policy on Retirement of Independent Directors. The Board places on record, its appreciation for the valuable contributions made by them during their tenure as Directors of the Company.

Mr. K. Balasubramanian and Mr. N. C. Sarabeswaran were appointed as Additional Directors on the Board with effect from November 9, 2011 and they hold office till the Annual General Meeting. Notices under Section 257 of the Companies Act, 1956 have been received from a member of the Company, for their appointment as Directors. The profiles of the Directors seeking appointment/reappointment are given in the notice of the annual general meeting.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' responsibility statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the year ended March 31, 2012, 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, 2012, on a going concern basis.

Corporate Governance

Your Company continuously works at improving its governance practices and processes. Your Company strives to ensure that the best practices are identified; adopted and followed and has also developed a framework for Corporate Governance and a roadmap for forward thinking Corporate Governance practices. The Board of Directors have approved Board Governance initiatives which cover the process for appointment, term of Independent Directors, training of Directors, effective time spent by Directors and evaluation process for Directors and the Board. These initiatives will be implemented in a progressive manner.

A detailed report on Corporate Governance practices followed by your 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 Practising 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, 2012, is provided in the Annual Report.

Awards and Recognitions

During the year under review, the following awards and recognitions were received:- - IGIA, New Delhi won the award at the Infrastructure Excellence Awards 2011 in the Main Awards Category - 'Airports', for Operation, Management & Development of the new integrated passenger terminal building T3;

- IGIA, New Delhi was rated as 2nd Best Airport in the 25-40 million passengers per annum (mppa) category in the Airport Service Quality awards given by the Airports Council International;

- IGIA, New Delhi was awarded international recognition for Excellence in Air Cargo at an event organised by Stat Trade Times;

- RGIA, Hyderabad was rated as 3rd Best Airport in the world in the 5-15 mppa category in Airport Service Quality by Airports Council International;

- SATTE-2012 award for RGIA, Hyderabad for the 'Best Performing Domestic Airport' in the aviation sector;

- Washrooms & Beyond Honours 2011 for Intelligent Washroom Design in the Airports Category for IGIA, New Delhi;

- Travel Leisure India's Best Awards - Best Airport (India), 2011 award for T3, IGIA, New Delhi;

- 'National Tourism Award 2010-11' under the 'Best Airport' category for RGIA, Hyderabad;

- SKYTRAX award for IGIA, New Delhi as the World's Most Improved Airport-2012 and No.1 Airport in India and RGIA, Hyderabad has been declared to be India's 3rd Best Airport, 2012;

- RGIA, Hyderabad was honoured with Project Management Institute Award;

- RGIA, Hyderabad received the 'Certificate of Merit' award 2011 for energy conservation from Ministry of Power, Government of India on December 14, 2011;

- ISGIA was selected 'Best Public Services Development Project' at the 2011 Europe International Property Awards organised in association with Bloomberg and Google;

- GEL obtained Leadership and Excellence Award in Safety, Health & Environment from CII – Southern Region;

- GVPGL has achieved the status of 5S model Company, the only Company in power sector, from ABK-AOTS DOSOKAI, Japan;

- GVPGL received National Energy Conservation Award from CEA.

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.

Auditors and Auditors' Report

M/s. S. R. Batliboi & Associates, 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.

There are no qualifications or adverse remarks in the Auditors' Report. However, with reference to auditor's 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. The Notes to Accounts forming part of the financial statements are self-explanatory with respect to the observations in the audit report and need no further explanation.

Corporate Social Responsibility (CSR)

GMR Group undertakes CSR activities on a significant scale through GMR Varalakshmi Foundation (GMRVF). It has its own professional staff drawn from top academic and development institutions who are dedicated to the cause of community development. The Vision of GMRVF is to make sustainable impact on the human development of under-served communities through initiatives in Education, Health and Livelihoods. Towards this, it works with the communities neighbouring GMR Group's businesses for their economic and social development, thus supporting their development, even as the businesses grow. Currently, GMRVF is working in over 200 villages and urban communities across 23 locations.

Environmental Protection and Sustainability

Your Company believes in integrating strong Environmental Management practices into its industrial enterprises across all processes. Several unique schemes have been implemented to prevent pollution and conserve natural resources to achieve sustainable development.

Your Company is aggressively implementing national policies and objectives in Environmental Management and Emission Control. In its quest to march towards business excellence, it is pursuing to attain excellence in the vital area of environmental management.

All the operating units are in compliance with environmental regulations. Hazardous wastes are being disposed through Pollution Control Board authorised agencies. Efficient monitoring systems have been set up at appropriate locations in and around the plants and the Environmental performance indicators like stack emissions, ambient air quality, among others are maintained well within the stipulated norms.

GPCL, Chennai plant was certified with OHSAS 18001, ISO 14001 and ISO 9001. A fully integrated Sewage Water Treatment Plant (STP) was set up including Reverse Osmosis (RO) process for treating 10% of total sewage of Chennai, saving fresh water intake of 5400 m3 per day, which is equivalent to the water consumption by 100000 people. The treated STP water is used for cooling operations and green belt development. Waste Heat Recovery Boilers generate steam for use in indirect heating of fuel storage tanks and pipelines. Solar energy is used to light the boundary fence. GPCL has been certified for Energy Management System (EnMS) ISO 50001:2011 by M/s DNV on October 3, 2011. The Online Stack Emissions of GPCL was connected to TNPCB central monitoring station in July 2011 and energy conservation initiatives resulted in savings of 1.27 Million Units.

GVPGL, Rajahmundry is also certified with OHSAS 18001, ISO 14001 and ISO 9001 and this Gas Turbine uses the advanced Dry Low NOx (DLN 2.0 ) burner system to reduce NOx emissions at source. The waste heat from gas turbine is used for power production in Steam Turbine through Heat Recovery Steam Generator (HRSG). In December 2011, GVPGL received National Energy Conservation Award from CEA and it is the only company in power sector which has achieved the status of 5S model company from ABK- AOTS DOSOKAI, Japan.

GEL, Kakinada obtained the host country approval from Ministry of Environment and Forests, Government of India which is a key milestone in registering this project under Clean Development Mechanism. It has carried on DNV Voluntary Carbon Standard Plant audit, Rain Water harvesting has been implemented and a greenbelt of 8000 trees across has been planted in nine acres of land.

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 DGCA, Airports and Airlines, Community Noise issues discussions along with DGCA and Ministry of Civil Aviation (MoCA) and Collaborative Environment Management Programs with stakeholders are examples of efforts on social concerns.

DIAL has established an Aircraft Noise Monitoring System (ANMS) in order to develop a database of aircraft noise which will help in formulating future mitigation strategies on noise in parity with the working group on airport noise formed by DGCA. 'Track your Aircraft Noise' program is one of the noise mitigation initiatives by the team, which offers an awareness on noise levels 10 decibels(A) below the DGCA standard for both night and day periods for aircraft movements taking place at IGIA.

As part of Corporate Environmental responsibility, GHIAL has voluntarily initiated and completed the GHG accounting for the calendar years 2009, 2010 and 2011. Further, it successfully completed verification of the GHG data of three years by M/s.Bureau Veritas as per ISO 14064-1 specifications. By this, RGIA has accredited its reduction of GHG emission of 1980 tonnes in 2010 and 2363 tonnes in 2011 on 2009 emissions.

Bio-fuel tree plantation (Jatropha) is one of the novel initiatives taken by RGIA towards promoting green environment. RGIA has planted 23,662 Jatropha saplings which is significant approach in terms of reduction in the carbon footprint and conservation of natural resources. Energy conservation practices are being implemented and achieved a reduction of 37,43,805 kWh of power per year. RGIA was awarded the prestigious 'Certificate of Merit' in the General Category Sector for the National Energy Conservation Awards – 2011 by the Government of India, which is in recognition of the initiatives taken at RGIA to conserve energy.

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.

Acknowledgments

Your Directors thank the lenders, banks, financial institutions, shareholders, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities and the society at large for their support and cooperation. 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 9, 2012 Executive Chairman


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting the 15th Annual Report together with the audited accounts of your Company for the year ended March 31, 2011.

Financial Results

You are aware that your Company has a unique business model. Your Company, as a holding company, operates in four different business sectors - Energy, Airports, Highways and Urban Infrastructure through various subsidiaries and associate companies. Your Company in the previous year commenced the Engineering, Procurement and Construction (EPC) business as a separate operating division which mainly caters to the requirements for implementing the projects undertaken by the subsidiaries. During the year, your Company through its subsidiaries took over the Male International Airport in Maldives and has started the operations and development of the Airport.

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

Presented below are the consolidated financial results of your Company:

(Rs. in Crore)

March 31, March 31, Particulars 2011 2010

Gross revenue 6,425.04 5,123.42

Fee paid to Airports Authority 651.26 556.91 of India

Net Revenue 5,773.78 4,566.51

Operating and administrative 4,218.29 3,202.20 expenditure

EBITDA 1,555.49 1,364.31

Other Income 311.30 291.34

Interest and Finance Charges 1,230.06 850.28

Depreciation / Amortisation 860.92 612.24

Exceptional Items :

Provision for diminution of (938.91) - investment

Amounts written off in earlier 140.33 - years written back

Provisions for taxation (including deferred tax and MAT 23.90 (32.21) Credit entitlement)

(Loss)/Profit after tax and before minority interest and share of (1,046.67) 225.34 Profits / (Losses) of associates (PAT)

Share of Profit / (Losses) (3.46) (21.58) of Associates

Minority Interest – 120.49 (45.36) (Profits) / Losses

(Loss)/Profit after tax after Minority interest and share of (929.64) 158.40 profit / (loss) of associates

Surplus brought forward from 914.12 778.36 previous year

Profit / (Loss) available for (15.52) 936.76 appropriation

Appropriations / Adjustments (43.29) 22.64

Available (Deficit)/Surplus carried (58.81) 914.12 to balance sheet

Earnings per share (Rs.) (Face value of Re. 1/- each) (2.40) 0.43 - Basic and Diluted

Consolidated gross revenue grew by 25.41 % from Rs. 5,123.42 Crore to Rs. 6,425.04 Crore and net revenue by 26.44 % from Rs. 4,566.51 Crore to Rs. 5,773.78 Crore. Airport, Energy, Highways, EPC and other segments contributed Rs. 3,021.52 Crore (47.03 %), Rs. 2,185.84 Crore (34.02 %), Rs. 390.25 Crore (6.07 %), Rs. 515.26 Crore (8.02 %) and Rs. 312.17 Crore (4.86 %) respectively to the gross revenue.

EBITDA has grown by 14.01 % as compared to the previous year from Rs. 1,364.31 Crore to Rs. 1,555.49 Crore. PAT has gone down from Rs. 225.34 Crore to a negative PAT of Rs. (1,046.67) Crore mainly due to provision for diminution of investment, higher depreciation and interest charges. Most of the projects are in their initial phase of operations wherein the capacity costs tend to be higher and revenue optimization is yet to accrue.

The negative PAT for the year was primarily on account of exceptional, one time and non-recurring loss of Rs. 938.91 Crore from the divestment of InterGen N.V. Of this loss, Rs.366 Crore was due to the reversal of incomes (success fee, interest on debentures invested for the acquisition of InterGen N.V., asset management fee) earlier accounted.

Presented below are the standalone financial results of your Company:

(Rs. in Crore)

March 31, March 31, Particulars 2011 2010

Gross revenue 727.40 169.36

Operating and administrative 487.84 95.09 expenditure

EBITDA 239.56 74.27

Other Income 5.46 9.42

Interest and finance charges 174.14 69.11

Depreciation 4.91 0.94

Profit before tax 65.97 13.64

Provisions for taxation (including 7.09 0.19 deferred tax and fringe benefit tax)

Profit after tax 58.88 13.45

Surplus brought forward from 277.48 251.04 previous year

Amount available for 336.36 264.49 appropriation

Appropriations

Debenture redemption reserve 37.73 (12.99)

Surplus carried to balance sheet 298.63 277.48

Earnings per share (Rs.) 0.15 0.04 - Basic and Diluted

The gross revenue of your Company on standalone basis has gone up by 329.50 % from Rs. 169.36 Crore to Rs. 727.40 Crore primarily due to increased revenue from EPC segment of Rs. 439.01 Crore. The increase in operating and administrative expenditure from Rs. 95.09 Crore to Rs. 487.84 Crore is mainly due to operating expenses of construction division. Increase in interest expenditure from Rs. 69.11 Crore to Rs.174.14 Crore is on account of interest on borrowings made during the year to meet the increased requirement of funds for investments.

Dividend

Your Company's strength lies in identification, planning, execution and successful implementation of the projects in the infrastructure space. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company currently has several projects under implementation and continues to explore newer opportunities, both domestic and international.

Your Board of Directors considers this to be in the strategic interest of the Company and believes that this will greatly enhance the long term shareholders' value. In order to fund these projects in their development, expansion and implementation stages, conservation of funds is of vital importance. Therefore, your Directors have not recommended any dividend for the financial year 2010-11.

Subsidiary companies

As a purposeful strategy, your Company carries its business operations through several subsidiary and associate companies which are formed either directly or as step-down subsidiaries or in certain cases by acquisition of a majority stake in existing enterprises, mainly due to the requirement of concession agreements. As on March 31, 2011, your Company had 121 subsidiary companies apart from other joint ventures / associate companies. The complete list of subsidiary companies as on March 31, 2011 is provided as Annexure 'A' to this report.

Review of Operations/Projects of Subsidiary Companies

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, the Management Discussion and Analysis, forming part of the Report, also brings out a brief review of the business operations of various subsidiaries and associates.

Airport Sector

Airports business of your Company consists of two operating airports in India at New Delhi and Hyderabad and two airports abroad at Istanbul in Turkey and Male in Maldives. Significant developments in these assets during the year are briefly presented below:

Delhi International Airport Private Limited (DIAL)

DIAL, a Joint Venture (JV) between GMR Group (54%), Airports Authority of India (AAI) (26%), Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%) and Malaysia Airports Holdings Berhad (MAHB) (10%) has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), New Delhi.

DIAL achieved an important milestone of successful delivery of new integrated terminal, T3 at IGIA, New Delhi in time for the Commonwealth Games as per schedule and commencement of T3 commercial operation without any major glitches.

The other significant developments during the current year are:

-Opened Transit Hotel with 40 rooms for domestic and 60 rooms for international passengers;

- On the Airlines marketing front, 5 new airlines have started operations during 2010-11.

DIAL recorded passenger traffic of 29.94 million in 2010-11, which is an overall growth of 14.7 % over the previous year. Cargo volume has touched 600,000 tonnes (MT) for the year 2010-11, an overall growth of 20 % over the previous year.

Indira Gandhi International Airport in the year 2010 has been conferred with the following accolades:

- Rated for the second consecutive year as the 4th Best Airport in the World in the category of airports handling 15-25 million passenger per annum;

- T3 of Indira Gandhi International Airport is the first airport in the world to be awarded the Leadership in Energy and Environmental Design (LEED) NC Gold rating;

- "Best International Project" by British Construction Industry Award (BCIA) for the best International Project among 180 International Projects;

- "Best Infrastructure Award" and "PPP Project of the Year" - KPMG Infrastructure Awards 2010.

GMR Hyderabad International Airport Limited (GHIAL)

GMR Hyderabad International Airport Limited (GHIAL) is a joint venture company promoted by the GMR Group (63%) in partnership with the Airports Authority of India (AAI) (13%), Government of Andhra Pradesh (13%) and Malaysia Airports Holdings Berhad (MAHB) (11%). GHIAL has set up India's first Greenfield Airport, Rajiv Gandhi International Airport (RGIA) at Shamsabad, Hyderabad.

The key highlights for the current year are:

- RGIA was declared world's no.1 airport for the second consecutive year in the 5-15 million passenger category by Airport Council International (ACI) with Airport Service Quality overall score of 4.51 on a scale of 1 - 5. It also won 'Best Airport in India' National Tourism Award 2009-10 by Ministry of Tourism, Government of India;

- Approval received in November, 2010 for hike in User Development Fee (UDF);

- Airline Marketing's efforts aimed at establishing Hyderabad Airport as South and Central India's gateway and hub of choice have resulted in additional routes and schedules. An agreement has been signed with Spice Jet to improve and strengthen regional connectivity out of Hyderabad. Similarly, MOU was signed with Lufthansa Cargo AG (LCAG) for making Hyderabad as Pharma Hub for LCAG and joint marketing of the facility;

- MAS-GMR MRO (Maintenance, Repair and Overhauling) achieved Financial Closure during the year;

- Hyderabad Duty-Free (fully owned subsidiary of GHIAL) operations started during July, 2010. Pharma Zone operations at the Cargo terminal commenced from January 1, 2011.

In the Financial Year 2010-11, GHIAL recorded a passenger traffic of 7.63 million, a growth of 17.6% over the previous year, with international traffic growing by 11% and domestic traffic growing by 20%. Similarly cargo traffic grew by about 22.89% over the previous year reaching a volume of 80,777 tonnes (MT).

Istanbul Sabiha Gokcen International Airport (ISGIA)

Your Company owns 40 % of Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim ve Isletme A.S., the company which is operating ISGIA through a BOT agreement for 20 years (extended by an additional 2 years). Other shareholders of ISGIA are Limak Holdings of Turkey with 40 % and Malaysia Airports Holdings Berhad (MAHB) with 20 % stake. The Consortium took over the operations as of May 2008 and has successfully inaugurated the new integrated passenger terminal with a capacity of 25 million passengers on October 31, 2009.

Important highlights for the year are:

- ISGIA was selected as the Best Airport at the World Low Cost Airlines Awards on September 29, 2010 in London. The award was given post nomination and voting by 38 international airlines;

- The declared airside capacity of ISGIA has increased to 32 Air Traffic Movement (ATM)/ hour from the previous 28 ATM/ hour by building a perimeter road around the airport to reduce runway crossings;

- 16 new airlines started flights out of ISGIA during the year;

- The prestigious journal called Risk Management Monitor named ISGIA to be amongst the 5 safest places on earth with its unique earthquake ready infrastructure;

- ISGIA closed the Calendar Year 2010 with 11.6 million passengers, which corresponds to a 75 % growth compared to the previous year. It continues to rank among the fastest growing airports in the world.

GMR Male International Airport Private Limited

(GMIAL)

GMIAL is a Brownfield airport in Male, capital city of Maldives through a partnership between GMR Group (77 %) and Malaysia Airports Holdings Berhad (MAHB) (23 %). The bid was won through an international bid process run by International Finance Corporation (IFC) amidst stiff competition.

The Concession agreement was signed on June 28, 2010 by the Company. The key highlights are:

- Took over the operations of airport on November 25, 2010 - 4 months ahead of schedule;

- Traffic has grown over 10 % in the months of operation compared to same months last year;

- Rolled out Terminal improvement plan and service quality improvement initiatives to improve service levels.

Energy Sector

The year under review was a significant year for the Energy Sector of your Company which now has 3 operating assets and 13 projects under different stages of construction or development.

New Initiatives

- Your Company has made a foray into transmission sector winning two projects in Rajasthan;

- Your Company has also made a foray into renewable energy undertaking a 25 MW solar project in Gujarat which is expected to be completed in the Financial Year 2011-12; and

- A 2.1 MW Wind Turbine is being set up in Gujarat which is likely to be commissioned by July 2011.

Operating Assets update

- Successfully commissioned GMR Energy Limited barge on combined cycle at Kakinada;

- GMR Vemagiri power plant won the prestigious National Energy Conservation award on December 14, 2010 in recognition of its energy conservation measures;

- Social Accountability - 8000 system was implemented, with initial audit conducted by Det Norske Veritas (DNV) and certification was obtained for the Chennai Power Plant;

- GMR Power Corporation Limited (GPCL) also obtained favorable decision from Appellate Tribunal on commercial issues with Tamil Nadu Electricity Board (TNEB).

Projects update

- The construction activities are in advanced stages in 3 thermal projects (Rajahmundry, Kamalanga and EMCO), which are due to start commercial operations in the calendar year 2012;

- Achieved financial closure of the 768 MW Rajahmundry and 1370 MW Chhattisgarh Energy Projects;

- Approval of the Kamalanga Project expansion by one unit of 350 MW; EPC contract has been awarded for the same;

- Significant progress in development of the coal mines in Indonesia which is expected to start production during Financial Year 2011-12;

- EPC contract placed on consortium of Siemens – Samsung for Island Power Plant at Singapore;

- Environmental Clearance obtained and Implementation Agreement signed with Government of Himachal Pradesh for Bajoli Holi Project;

- Your Company increased its investment to a majority stake in Homeland Energy Group (HEG) towards its long term strategy for fuel security. The management team of HEG has been strengthened to ensure profitable operations.

Your Company is on track to implement several other projects which are under different stages of construction and development. These projects are coal based 1370 MW SJK Powergen project and the hydroelectric power projects - (i) 300 MW Alaknanda power project on the Alaknanda River in the State of Uttarakhand, (ii) 160 MW Talong power project in East Kameng district in the State of Arunachal Pradesh, (iii) 600 MW Upper Marsyangdi power project in Nepal; and (iv) 900 MW Upper Karnali power project in Nepal.

Highways

Your Company operates the following six highways across India measuring a total length of around 1684 lane kms:

Three Annuity based highways:

- Tuni - Anakapalli;

- Tambaram - Tindivanam;

- Adloor Yellareddy - Gundla Pochanpalli.

Three Toll based highways:

- Ambala - Chandigarh;

- Thondapalli – Jadcherla;

- Tindivanam - Ulundurpet.

During the financial year under review, your Company has been successful in achieving financial closure of the three new projects in the Highways Sector and has made significant progress in the execution of these projects. These are:

- The 1090 lane km Hyderabad - Vijayawada toll project;

- The 178 lane km Chennai Outer Ring Road annuity project;

- The 376 lane km Hungund – Hospet toll project.

Urban Infrastructure

Your Company is developing SEZs in Krishnagiri and Kakinada and two Aerotropolis around the Delhi and Hyderabad Airports as part of this sector. The major developments are:

Krishnagiri and Kakinada SEZ

Pursuant to a memorandum of understanding entered into with the State of Tamil Nadu, SEZ is being developed in Krishnagiri district in the State of Tamil Nadu, through a joint venture with Tamil Nadu Industrial Development Corporation. The Krishnagiri SEZ is expected to cater to biotechnology, information technology, traditional electronics and engineering sectors.

The Krishnagiri SEZ is planned to be spread over 3,000 acres, major portion of which has already been acquired. Commercial operation of this SEZ is expected to commence in 2014.

Your Company has acquired a majority stake in Kakinada SEZ Private Limited and is developing the area as a Special Investment Region. Conceptual Master plans have been developed through reputed international consultants.

Aerotropolis Development

Your Company is developing airport cities around the Delhi and Hyderabad Airports to match world class standards. The Delhi Airport Aerocity is in its first phase of development, which may ultimately cover up to 5% of the 5,100 acres of the land area of Delhi Airport. The hospitality district is envisaged to be developed in the first phase of property development to bring in leading national and international brands of hotels. A total of 45 acres of land divided into 14 asset areas has been leased out. 7 asset areas (21.8 acres) were awarded to successful bidders in 2008-09 during the first round of bidding and the remaining 7 assets were successfully awarded during 2009-10. The second phase development is expected to start in Financial Year 2011-12. Delhi Airport Express Metro services commenced operations during the year under review. Infrastructure development activities for the hospitality district will be completed and some of the hotels will start functioning during Financial Year 2011-12.

The Hyderabad Aerotropolis is envisaged on 1,000 acres of commercial land around the Hyderabad Airport. Your Company has plans to develop the Hyderabad Aerotropolis on a theme based development. The Company employed reputed international consultants and has completed the Master planning of the Aerotropolis development. Several themes have been identified and feasibility established for some of them and these are in advanced stage of planning. Financial closure and construction is likely to happen during Financial Year 2011-12. The airport based hotel, Hyderabad Airport Novotel has improved its operations substantially as compared to the previous years.

Aviation Business

The Group's Corporate Aviation business consists of chartering business jets both to the Group companies as well as to third parties. It is presently focusing on external charter growth to reduce dependence on the group for its financing needs. The Company's wholly owned subsidiary, GMR Aviation Private Limited (GAPL) has a young fleet comprising of short-haul and long-haul planes and helicopters with experienced crew and operational staff. The fleet includes Falcon and Hawker aircraft and Bell helicopter. During the year, GAPL has procured one Bell 412 twin engine helicopter and the same is being actively utilized for external charters.

InterGen N.V.

Your Company, through its step-down subsidiary, GMR Energy Global Limited (GEGL), had entered into necessary arrangements to acquire 50% economic stake in InterGen N.V. In this regard it had subscribed to the Compulsory Convertible Debentures (CCDs) issued for this purpose, by a fellow subsidiary, GMR Holding (Malta) Limited (GHML), a step down subsidiary of GMR Holdings Private Limited, the Company's Holding Company. The said fellow subsidiary, GHML, had acquired the 50% stake in InterGen N.V. through its step down subsidiary GMR Infrastructure (Malta) Limited (GIML) for USD 1,135 million through a mix of external borrowings of USD 1,107 million (under the guarantees extended by your Company) and the balance was funded through CCDs as above. Your Company has extended further funding support to GHML by subscribing to additional CCDs to meet the interest, transaction / carrying costs.

Due to the changed economic environment in overseas markets and the group's intention of renewed focus in developing large energy assets within India for which opportunities are opening up due to sustained economic growth of India fuelling huge demand for power, during the year ended March 31, 2011, GIML was advised to sell the investment in InterGen N.V. Accordingly, GIML entered into an agreement with Overseas International Inc. Limited, an associate of China Huaneng Group to sell the investment in InterGen N.V. for USD 1,232 million.

On consummation of the transaction during April 2011, after due regulatory approvals, GHML has repaid the loans availed from the banks in full but could repay the CCDs in part only after meeting the interest, transaction / carrying costs. Thus GEGL has recorded a one time loss of Rs. 938.91 Crore, which is disclosed as an exceptional item in the consolidated financial results.

Though the divestment of InterGen N.V. has resulted in a one time and non-recurring loss of Rs. 938.91 Crore, it has released an equity capital of Rs.958 Crore that would enable the Company to reinforce its focus and deploy resources on more profitable Assets.

Risk Management

As an enterprise with presence in different segments of Infrastructure industry, your Company is exposed to a number of risks, having potential to impact the businesses in varying measures. Your Company realizes that it is imperative to identify and address these risks and leverage opportunities in order to achieve the objectives that it has set for itself.

During the year, your Company revised the risk management framework in line with ISO 31000 in order to bring it in line with current Enterprise Risk Management (ERM) best practices and effectively address the emerging challenges in a dynamic business environment.

Significant developments during the year include:

- Revised ERM Framework deployed across all Key Business Sectors;

- Top risks at the Group, Sector and Business Unit level are being profiled for treatment and regular monitoring of risks;

- Awareness of risks among employees being improved through Risk Newsletters, regular updates on risks and training programmes;

- Development of a Bid / Opportunity screening framework with detailed parameters;

- Extended the scope of ERM to build resilience through Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP).

The output of ERM process in the form of identified top risks served as a critical input for the Company's Strategic / Annual Operating planning exercise.

The 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 your Company is provided in Management Discussion and Analysis.

Developments in Human Resources and Organisation Development

Your Company has robust process of human resources development which is described in detail in Management Discussion and Analysis 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 and Profit and Loss account of its subsidiary companies to its Annual Report. The Ministry of Corporate Affairs (MCA), Government of India vide its 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 2010-11 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 are 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 Accounting Standard - 21 and Listing Agreement with the Stock Exchanges, the audited consolidated financial statements of your Company and its subsidiaries are attached.

Changes in Share capital

As you are aware, during the year under review your Company completed issue of 225,080,390 equity shares of Re.1 each at a price of Rs.62.20 per equity share, including premium of Rs.61.20 per equity share, aggregating to Rs.1,400 Crore to Qualified Institutional Buyers (QIBs) as per Chapter VIII of SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009, through the Qualified Institutional Placement (QIP). The QIP opened for subscription to QIBs on April 15, 2010 and closed on April 19, 2010. The entire money amounting to Rs.1,400 Crore was received and allotment of shares was made on April 21, 2010. Consequent to this allotment, the listed equity share capital has increased from Rs. 3,667,354,392 to Rs. 3,892,434,782.

The Company has paid the listing fees payable to the BSE and the NSE for the Financial Year 2011-12.

Directors

Mr. O. Bangaru Raju, Mr. R. S. S. L. N. Bhaskarudu, Dr. Prakash G Apte and Mr. Kiran Kumar Grandhi, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their reappointment for your approval. The profiles of the above Directors are given under the section "Board of Directors" in the Report of Corporate Governance attached to the Annual Report.

Group

Pursuant to intimation from the Promoters, the names of the Promoters and entities comprising 'Group' are disclosed in the Annual Report for the purpose of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Directors' responsibility statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' responsibility statement, it is hereby confirmed:

1. That in the preparation of the annual accounts for the year ended March 31, 2011, 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 the year;

3. That the Directors have taken proper and sufficient care for 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, 2011, on a going concern basis.

Corporate Governance

Your Company continuously works at improving its governance practices and processes. Your Company strives to ensure that the best practices are identified, adopted and followed and has also developed a framework for corporate governance and a roadmap for forward thinking corporate governance practices.

A detailed report on Corporate Governance practices followed by your 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, 2011, is provided in the Annual Report.

Awards and Recognitions

During the period under review, your Company and its subsidiaries / associates have received the following awards / recognitions:

- Indira Gandhi International Airport (IGIA), New Delhi has been ranked 12th out of 154 participant Airports in overall category based on Airport Service Quality (ASQ) score and selected for Airport Council International (ACI) Director General's Recognition Award;

- Award for "Airport with Most New 'Non – Regional' Routes" for IGIA;

- Greentech Gold Award for Environmental Excellence in Infrastructure Sector for the year 2010 for IGIA; and

- Rajiv Gandhi International Airport (RGIA), Hyderabad was adjudged world's no.1 airport for second consecutive year in 5 -15 million passenger category by ACI.

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.

Auditors and Auditors' Report

M/s. S.R. Batliboi & Associates, 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 re-appointment 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.

The Notes to Accounts forming part of the financial statements are self-explanatory and need no further explanation. There are no qualifications or adverse remarks in the auditors' report which require any clarification or explanation.

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 this, GMRVF works with the communities neighbouring GMR Group's businesses for their economic and social development thus making them to grow along with the business. Currently, Foundation is working in about 190 villages / urban communities across 22 locations including two in Nepal. The locations in India are spread across different states namely Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, New Delhi, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu and Uttarakhand. The activities of GMRVF under its various thrust areas are covered elsewhere in the Annual Report.

Environmental Protection and Sustainability

Your Company believes in integrating strong Environmental Management practices into its industrial enterprises across all processes. Several unique schemes have been implemented to prevent pollution and conserve natural resources to achieve sustainable development.

All the operating units are in compliance with environmental regulations. Hazardous wastes are being disposed through Pollution Control Board authorized agencies. Continuous Ambient Monitoring systems have been set up at appropriate locations in and around the plants and the Environmental performance indicators like Stack emissions, ambient air quality, etc are maintained well within the stipulated norms.

Vemagiri and Chennai units are certified with OHSAS 18001, ISO 14001 and ISO 9001. At Chennai plant, fully integrated Sewage Water Treatment Plant (STP) has been set up including Reverse Osmosis (RO) process for treating 10% of Chennai plant's total sewage saving fresh water intake of 5400 m3 per day, which is equivalent to the water use by 100000 people. The treated STP water is used for cooling operations and green belt development. Waste Heat Recovery Boilers generate steam for use in indirect heating of fuel storage tanks and pipelines. Solar energy is used to lighten the boundary fence.

At Vemagiri Plant, the Gas Turbine uses the advanced Dry Low NOx (DLN 2.0 ) burner system to reduce NOx emissions at source. Waste heat from Gas Turbine is used for power production in Steam Turbine through Heat Recovery Steam Generator (HRSG). Reuse of Steam Condensate and HRSG is designed for zero make up.

At GHIAL, special environmental friendly design features have been incorporated for power savings by using natural sun light. The Lighting per square foot in the passenger terminal block uses only 0.9 watts of energy as against the minimum of 1.3 watts prescribed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. Process has been put in place for effective waste management system and for reduction of carbon footprint.

DIAL has won Greentech Gold Award for Environmental Excellence in Infrastructure Sector for the year 2010. The Greentech award is presented to company in recognition of outstanding achievements in the field of environment protection on the basis of evaluation of performance every year. T3 of Indira Gandhi International Airport is the first amongst the world's airports to be awarded the Leadership in Energy and Environmental Design (LEED) NC Gold rating. DIAL is certified for its implemented Environmental Management System ISO 14001:2004. At DIAL, an integrated Aircraft Noise Monitoring System (ANMS) has been put in place in conjunction with the airlines and other airport stakeholders such as AAI, Directorate General of Civil Aviation and Air Traffic Control which will help DIAL to monitor and measure the aircraft noise.

DIAL has undertaken the following pollution abatement steps during the reporting period:

- Sewage Treatment Plant operational with advanced tertiary treatment viz. ultra filtration and RO technique and latest water treatment equipment to achieve zero water discharge plan. The entire treated water is being utilized for air-condition cooling i.e. Heating Ventilating and Air Conditioning (HVAC) and horticulture activities;

- Advanced stage of issuance of Certified Emission Reduction (CER) for energy reduction measure taken at T3 terminal by United Nations Framework Convention on Climate Change (UNFCCC) - Clean Development Mechanism (CDM); and

- In new T3 terminal, DIAL has incorporated capability for segregation of waste at source using twin bin system i.e. food and recyclables by passengers, concessionaires and all service providers.

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.

Acknowledgments

Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from customers, investors, lenders, business associates, banks, financial institutions, shareholders, various statutory authorities and society at large. Your Directors also place on record, their appreciation for the contribution, commitment and dedication of the employees of the Company and its subsidiaries at all levels.

For and on behalf of the Board

Sd/-

G. M. Rao

Executive Chairman Place: Bengaluru

Date : May 30, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 14th Annual Report together with the audited accounts of your Company for the year ended March 31, 2010.

Financial Results

Your Company, as a holding company, operates in four different business sectors – energy, airports, highways and urban infrastructure through subsidiary and associate companies. During the year under review, your Company commenced the Engineering, Procurement and Construction (EPC) business as a separate operating division mainly to cater to the requirements for implementing the projects undertaken by the subsidiaries. This strategy would enable the Company to insulate the risks associated with third party contractors, ease in accessing funds, servicing debt through operating revenues, enhancement of project management, procurement and construction skills, reinforce risk management processes, better cost management besides enhancing the synergies and operational advantages thereof. The company’s revenue, expenditure and results of operations are presented through consolidated financial statements and the details given below show both the consolidated and standalone financial results.

Presented below are the consolidated financial results of your Company:

(Rs. in Crore)

March 31, March 31, Particulars 2010 2009

Gross revenue 5,123.42 4,476.19

Fee paid to Airports Authority of India 556.91 456.97

Net revenue 4,566.51 4,019.22

Operating and administrative expenditure 3,202.20 2,952.43

EBITDA 1,364.31 1,066.79

Other Income 163.39 21.37

Interest & finance charges 722.33 368.20

Depreciation / amortisation 612.24 389.83

Profit before tax 193.13 330.13

Provisions for taxation (including (32.21) 53.02 deferred tax, MAT credit entitlement and fringe benefit tax)

Profit after tax 225.34 277.11

Minority interest - (Profts)/ Losses (45.36) 2.34

Share of Profts/(Losses) of Associates (21.58) _

Profit after tax and Minority interest and 158.40 279.45 share of Profts/(Losses) of associates

Surplus brought forward from 778.36 524.21 previous year

Amount available for appropriation 936.76 803.66 after minority interest

Appropriations / Adjustments 22.64 25.30

Available surplus carried to Balance Sheet 914.12 778.36

Earnings per share (Rs.) (Face value 0.43 0.77 of Re.1/- each) -Basic and Diluted

Consolidated gross revenue grew by 14.46% from Rs. 4,476.19 Crore to Rs. 5,123.42 Crore and net revenue by 13.62% from Rs. 4,019.22 Crore to Rs. 4,566.51 Crore. Airport, Energy, Highways,

EPC and other (net of inter segment) segments contributed Rs. 2,045.53 crore (39.93%), Rs. 2,039.47 crore (39.81%), Rs. 346.07 crore (6.75%) Rs. 409.85 crore (8.00%) and Rs. 282.50 crore (5.51%) respectively to the gross revenues.

EBITDA has grown by 27.89% as compared to the previous year from Rs.1,066.79 Crore to Rs. 1,364.31 Crore. PAT has gone down from Rs. 277.11 Crore to Rs. 225.34 Crore as compared to the previous year mainly due to the higher depreciation and interest charges. Most of the projects are in their initial phase of operations wherein the capacity costs tend to be higher and revenue optimization yet to accrue.

Presented below are the standalone fnancial results of your Company:

(Rs. in Crore)

March 31, March 31, Particulars 2010 2009

Gross revenue 169.36 159.20

Operating and administrative 95.09 37.13 expenditure

EBITDA 74.27 122.07

Other Income 9.42 5.82

Interest & fnance charges 69.11 23.79

Depreciation 0.94 0.11

Profit before tax 13.64 103.99

Provisions for taxation (including 0.19 6.32 deferred tax and fringe benefit tax)

Profit after tax 13.45 97.67

Surplus brought forward from 251.04 149.62 previous year

Amount available for appropriation 264.49 247.29

Appropriations Debenture redemption reserve (12.98) (3.75)

Surplus carried to Balance Sheet 277.48 251.04

Earnings per share (Rs.) - Basic 0.04 0.27 and Diluted

The total revenues of your Company on standalone basis have gone up by 6.38% from Rs. 159.20 Crore to Rs. 169.36 Crore primarily due to revenue from EPC division of Rs.101.39 Crore. The increase in operating and administrative expenditure from Rs. 37.13 Crore to Rs. 95.09 Crore is mainly due to operating expenses of construction division. Increase in interest expenditure from Rs. 23.79 Crore to Rs. 69.11 Crore is on account of interest on borrowings made during the year to meet the increased requirement of funds for investments. During the year under review, the Company allotted unsecured debentures of Rs. 500 Crore on private placement basis which are listed on National Stock Exchange.

Dividend

The strength of your company lies in identification, planning, execution and successful implementation of the projects in the infrastructure space. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your company to evaluate various opportunities in the different business verticals in which your company operates. Your company currently has several projects under implementation and continues to explore newer opportunities, both domestic and international.

Your Board of Directors considers this to be in the strategic interest of the Company and believe that this will greatly enhance the long term shareholders’ value. In order to fund these projects in their development, expansion and implementation stages, conservation of funds is of vital importance. Therefore, your Directors have not recommended any dividend for the financial year 2009-10.

Subsidiary companies

As stated earlier, your Company carries its business operations through several subsidiary and associate companies which are formed either directly or as step-down subsidiaries or in certain cases by acquisition of a majority stake in existing enterprises, mainly due to the requirement of concession agreements. As on March 31, 2010, your Company has total 89 Subsidiary Companies apart from other joint ventures / associate companies.

The total list of subsidiary companies as on March 31, 2010 is provided as annexure ‘A’ to this report.

Review of Operations / Projects of Subsidiary Companies

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 and associates.

Airport Sector

Airports business of your Company consists of two airports at Delhi and Hyderabad in India and one airport abroad in Istanbul, Turkey. Briefy presented below are the significant developments in these three assets during the year:

Delhi International Airport Private Limited (DIAL)

DIAL is a joint venture between your Company (54%), Airports Authority of India (26%), Fraport AG (10%) and Malaysia Airports (10%). DIAL has entered into a long term agreement to operate, manage and develop the Indira Gandhi International Airport, Delhi. The significant progresses achieved during the current year are:

y Work on the new integrated Terminal 3 construction has been completed in a record time of 37 months and commercial operations are slated to commence from July 2010.

- DIAL has signed agreements for 11 Joint Venture partnerships which include Duty-free, F&B, Cargo, IT, Fuel Farm, Car Parking, Advertising and Bridge Mounted Equipments.

- In Phase I of the hospitality district, the Company awarded all asset areas (45 acres) to successful bidders for commercial property development.

- Delhi Airport has been declared the World’s 4th Best Airport and Asia Pacifc’s Most Improved Airport for Airport Service Quality (ASQ) in the 15 to 25 million passengers category by Airports Council International (ACI). It has improved its ASQ score from 3.15 in 2008 to 4.16 in 2009.

DIAL recorded 7% and 18% growth in international and Domestic passenger traffic respectively for the year 2009-10. With overall growth of 14%, DIAL recorded 26.1 million passengers traffic for 2009-10 making it the busiest airport in India.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL has set up India’s first Greenfield Airport, Rajiv Gandhi International Airport (RGIA) in Shamshabad, Hyderabad through the Public Private Partnership (PPP) route. GHIAL is a joint venture between your Company (63%), Airports Authority of India (13%), Government of Andhra Pradesh (13%) and Malaysia Airports Holdings Berhad (11%). The progresses achieved during the current year are:

- RGIA was declared world’s best airport in 5 to 15 million passengers category and 5th best overall by ACI (ASQ 4.44 in 2009) on service quality standards. It also won the “Best Airport Award” at the Skytrax World Airports Awards, 2010.

- On Airlines marketing, Jet Airways and Etihad have started one new route each to Dubai and Abu Dhabi respectively; Indigo has added new routes, Silk Air, Etihad and Malaysian Airlines have increased their frequency. RGIA has been successful in bringing Lufthansa Cargo to Hyderabad.

- GMR Aviation Academy in collaboration with Jeppesen Aviation Training Services, a subsidiary of Boeing, is in process of initiating Flight Operations Management training courses at its training academy at Rajiv Gandhi International Airport.

- CFM International, world’s leading aircraft engine manufacturer, inaugurated the engine Maintenance Training Center at Hyderabad Airport Aerospace Park.

GHIAL has seen a 5% growth in overall passenger traffic during Financial Year 2009-10 with the international traffic growing by 9% and domestic traffic by 3%. Cargo volumes have also recorded growth of 14.8% reaching a volume of 65.727 tonnes in Financial Year 2009-10.

The Istanbul Airport

Your Company owns 40% of Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim Ve Isletme A.S., (ISGIA), the company that is operating and expanding the Istanbul Sabiha Gokcen International Airport at Istanbul, Turkey for a concession period of 20 years. The other shareholders of ISGIA are Limak Insaat Sanayi Ve Tic A.S. with 40% and Malaysia Airports Holdings Berhad with 20%. The consortium took over the operations of the Istanbul airport in May 2008. Key milestones achieved during the year at ISGIA are:

- Inauguration of the new passenger terminal building on October 31, 2009 (the building was completed 12 months ahead of schedule in 18 months).

- The airport can now handle 25 million passengers annually.

- Developed Cargo Handling capacity of over 1,000 tons monthly.

- All the contracts are in place and the concessions fully operational (F&B, Duty Free, Advertising etc).

- The airport achieved a 48% increase in the passenger traffic and handled 6.3 million passengers in the year 2009.

- The airport won the anna.aero Airport Traffic Growth Award for highest traffic growth in the 5 to 10 million passengers category. The airport also won the Routes Airport Marketing Award 2009 for European Region.

Energy Sector

The year under review was a significant year for the Energy Sector of your Company. To further strengthen presence in the power generation; your Company acquired two power projects with a total capacity of 1,970 MW. They are (i) 600 MW coal based EMCO Power project in Warora, Maharashtra and (ii) 1,370 MW coal based SJK power project in Shahdol, Madhya Pradesh.

The year was significant for three operating power plants which your company currently owns:

- Owing to availability of gas, the 388.5 MW GMR Vemagiri Power Plant achieved its first full year of operation since it was commissioned recording 89% PLF for the year.

- The 220 MW barge mounted power plant was successfully relocated from Mangalore to Kakinada and converted to operate on gas. This plant is expected to commence operation by June 2010.

- O&M operations at the 200 MW contracted capacity LSHS- fired Chennai power plant was taken over by the Company achieving significant cost savings.

During the year, your Company achieved significant milestones for different projects which are under different stages of implementation:

- Kamalanga Project: Achieved financial closure for the 1050 MW plant;

- Chhattisgarh Project: EPC order for BTG package has been placed for the 1370 MW plant;

- EMCO Project: Achieved financial closure and order for BTG equipment placed for the 600 MW plant; and

- Rajahmundry Energy Project: EPC contract placed for the capacity of 768 MW.

Your Company is on track to implement the other projects which it is developing and due progress has been made in these projects during the year. These projects are coal based 1,370 MW SJK Powergen Project, gas based 800MW Island power project in Singapore and the fve hydroelectric power projects - (i) 300 MW Alaknanda power project on the Alaknanda River in the state of Uttarakhand, (ii) 160 MW Talong power project in the East Kameng district in the state of Arunachal Pradesh, (iii) 180 MW Bajoli Holi power plant in the Chamba district in the state of Himachal Pradesh, (iv) 600 MW Upper Marsyangdi power project in Nepal; and (v) 900 MW Upper Karnali power project in Nepal.

Highways

Your Company has six highway projects under operation across India measuring a total length of around 421 kms. These include three Annuity based projects: Tuni - Anakapalli, Tambaram - Tindivanam, Adloor Yellareddy - Gundla Pochanpalli and three Toll based projects: Ambala - Chandigarh, Thondapalli - Jadcherla and Tindivanam - Ulundurpet. The Company commenced this business in October 2004, when the Tambaram - Tindivanam road project entered into commercial operation. The Group has been maintaining safety standards by continuous monitoring of traffic and accident analysis. Several accident mitigation measures have been put in place.

During the financial year under review, the sixth road project, namely Tindivanam - Ulundurpet was completed and commenced commercial operations as per schedule.

Your Company has been successful in winning three new projects in the Highways Sector. These are the 181.6 kms Hyderabad - Vijayawada toll project, 29.65 kms Chennai Outer Ring Road annuity project and 99.05 kms Hungund – Hospet toll project.

Urban Infrastructure

Your Company is developing SEZ in Krishnagiri and two Aerotropolis around the Delhi and Hyderabad Airports as part of this sector. The major developments are: Krishnagiri SEZ.

Pursuant to a memorandum of understanding entered into with the state of Tamil Nadu, SEZ is being developed at Krishnagiri district in the state of Tamil Nadu, through a joint venture with Tamil Nadu Industrial Development Corporation. The Krishnagiri SEZ is expected to cater to biotechnology, information technology, traditional electronics and engineering companies.

The Krishnagiri SEZ is planned to be spread over 3,300 acres, approximately 60% of which has already been acquired. Commercial operation of this SEZ is expected to commence by 2014.

Aerotropolis Development

Your Company is developing airport cities around the Delhi and Hyderabad Airports to match world class standards.

The Delhi Airport Aerocity is in its frst phase of development, which may ultimately cover up to 5% of the 5,100 acres of the land area of Delhi Airport. The hospitality district is envisaged to be developed in the frst phase of property development to bring in leading national and international brands of hotels. A total of 45 acres of land divided into 14 asset areas has been leased out. 7 asset areas (21.8 acres) were awarded to successful bidders in 2008-09 during the first round of bidding and the remaining 7 assets were successfully awarded during the current year. Second phase development is expected to start in financial year 2010-11.

The Hyderabad Aerotropolis is envisaged on a 1,000 acres of commercial land around the Hyderabad Airport. Your Company plans to develop the Hyderabad Aerotropolis on a theme based development and it is in the conceptualization stage. Some of these theme based developments is likely to happen during financial year 2010-11.

Corporate and International Business

The Corporate business includes provision of common services and resources to all Group businesses. It also includes the Group’s Corporate Aviation business which consists of chartering business jets both to the Group companies as well as to third parties. The Company’s wholly owned subsidiary, GMR Aviation Private Limited (GAPL) has a young feet comprising of short-haul & long-haul planes and helicopters with experienced crew & operational staff. The feet includes Falcon and Hawker aircrafts and Bell helicopter.

GMR International was set up by the Group as a dedicated division for expanding its presence in the global market place especially in Energy and Airport sectors. GMR International is pursuing a region-based strategy with a focus on building strong local relationships with strategic partners, investors, financial institutions and governmental bodies. Competing globally, the Group will capitalize on new business opportunities in emerging markets, access global talent, raise capital from international market at competitive rates, diversify the portfolio and strengthen the GMR brand globally.

This division, headquartered in London, leverages the Group’s bidding, financing, project management, and partnership development skills to develop, own and operate assets abroad. GMR International focuses on a few ‘hot spot’ regions characterized by high growth, high demand - supply gap and openness to Indian investment. The regions of interest for growing GMR’s footprint are Middle East and North Africa (MENA), South East Asia (ASEAN) and Emerging Europe.

Till date, GMR International has opened two regional offices in Istanbul and Singapore to target opportunities in MENA and ASEAN regions respectively.

Your Company is also developing the Island Power Project in Singapore after acquisition of its 100% stake last year in the gas based 800 MW private power utility.

Your Company continuously monitors overseas investment made by the Group. The Company has taken efforts to strengthen the managerial focus in respect of investments made in InterGen N.V. The investment in Homeland Energy Group is for long term strategic requirements to meet the fuel needs of the energy companies of the Group. The management team has been strengthened in the Homeland Energy to ensure proftable operations.

Risk Management

Like all businesses in the Infrastructure sector, your Company is exposed to a number of risk factors, both known and unknown, not all of which are wholly within our control. All of them have the potential to impact our business, revenues, profits, assets, liquidity and capital resources adversely.

We realize that it is imperative to identify and address these risks and leverage opportunities in order to achieve the objectives that it has set for itself. Enterprise Risk Management (ERM) Framework is aimed at institutionalizing a culture of risk awareness and facilitating risk based decision making across the Group by establishing a suitable balance between harnessing opportunities and containing risks.

Your Company has well defined processes for risk identification, risk assessment, appropriate risk mitigation treatment and monitoring actions thereof at various stages of the value chain, i.e. Bid, Project and Asset stages.

Your Company also continuously seeks to bring the existing risk policies in line with current ERM thinking, revisit the risk management organization structure, refine roles and responsibilities, strengthen the process for risk treatment and ensure regular reviews at all levels of the organization.

As a measure of derisking its business, your Company seeks to follow a policy of undertaking diversified projects in different segments, geographies and revenue models.

A process exists to inform the Board / Audit Committee Members about the risk assessment and minimization procedures. These procedures are subjected to a periodical review to ensure that the management controls the risk through means of a properly defined framework.

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

Developments in Human Resources and Organisation Development

Your company has robust process of human resources development which is described in detail in Management Discussion and Analysis 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 and Profit and Loss account of its subsidiary companies to its Annual Report. The Ministry of Corporate Affairs, Government of India (GoI) has granted exemption to your Company for not attaching the above documents of subsidiary companies with the Annual Report of the Company for the financial year 2009-10. Accordingly, this Annual Report does not contain the reports and other statements of the subsidiary companies. Your Company will make available the annual audited accounts and related detailed information of the subsidiary companies to the investors of the company and its subsidiaries seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection during business hours at the head / registered office of the Company and that of the subsidiary companies concerned.

The statement pursuant to above stated approval of Government of India, about financial information of each subsidiary company, containing details of (a) capital, (b) reserves, (c) total assets, (d) total liabilities, (e) details of investment (except in case of investment in subsidiaries), (f) turnover, (g) profit before taxation, (h) provision for taxation, (i) profit after taxation and (j) proposed dividend is provided as annexure ‘B’. 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 Accounting Standard – 21 and Listing Agreement with stock exchanges, the audited consolidated financial statements of your Company and its subsidiaries are attached.

Changes in Share capital

Sub-division of Equity Shares

During the year under review, your Company has sub-divided its equity shares from a face value of Rs.2 to Re.1 in order to facilitate the benefits like more liquidity, less volatility and broad basing of small investors.

Qualified Institutional Placements (QIP)

Your Company successfully completed issue of 22,50,80,390 equity shares of Re.1 each at a price of Rs.62.20 per equity share, including premium of Rs.61.20 per equity share, aggregating Rs.1400 Crore to Qualified Institutional Buyers (QIBs) as per Chapter VIII of SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009, through the QIP. The QIP opened for subscription to QIBs on April 15, 2010 and closed on April 19, 2010.

The entire money amounting to Rs.1400 Crore was received and allotment of shares was made on April 21, 2010. The BSE and the NSE had given trading permission for the equity shares issued to QIBs on April 22, 2010. Consequent to this allotment, the listed equity share capital has been increased from Rs. 366,73,54,392 to Rs. 389,24,34,782.

The Company has paid the listing fees payable to the BSE and the NSE for the financial year 2010-11.

Directors

Mr. G.B.S. Raju, resigned as the Managing Director with effect from May 12, 2010. He continues as a Director on the Board of Directors of the Company. The Board places on record, its appreciation for the valuable contribution made by Mr. G.B.S. Raju during his tenure as the Managing Director of the Company.

Mr. Srinivas Bommidala has been appointed as the Managing Director of the Company with effect from May 24, 2010 for a period of 5 years subject to the approval of the members at the ensuing General Meeting.

Mr. G.B.S. Raju, Mr. B.V. Nageswara Rao, Mr. Arun K. Thiagarajan and Mr. K.R. Ramamoorthy, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their reappointment for your approval.

The professional background of the above Directors is given under the section “Board of Directors” in the Report of Corporate Governance attached to the Annual Report.

Group

Pursuant to intimation from the Promoters, the names of the Promoters and entities comprising ‘group’ are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Directors’ responsibility statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors’ responsibility statement, it is hereby confrmed:

1. That in the preparation of the annual accounts for the year ended March 31, 2010, 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 the year.

3. That the Directors have taken proper and sufficient care for 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, 2010, on a going concern basis.

Corporate Governance

Corporate Governance at GMR is driven by a simple principle - ‘Achieve right results through right means’. Your Company continually works at improving its practices and processes as it is spreading its presence through continents. Your Company has a Corporate Governance Committee which was constituted in 2009 to ensure that the best practices are identified, adopted and followed. Your company has also developed a framework for corporate governance and a roadmap for forward thinking corporate governance practices.

A detailed report on Corporate Governance practices followed by your 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, Secretarial audit is being carried out at specific periodicity by a Practising Company Secretary. The findings of the audit have been satisfactory.

Awards and Recognitions

During the period under review, your company and its subsidiariesf / associates have received the following awards / recognitions:

- GMR Varalakshmi Foundation, the CSR arm of the Group, received the Silver Plate Award for supporting cause of Elders – on October 1, 2009, New Delhi for the CSR works with elderly. The award aims to recognize and applaud the highest contribution given to the cause of disadvantaged older persons.

y Delhi’s Indira Gandhi International Airport (IGIA) was ranked 4th best airport in the world at the Airport Council International’s (ACI) Annual Airport Service Quality (ASQ) Awards. It received this prestigious rating for airports in the 15 to 25 million passenger traffic per annum category in ACI’s announcement on February 16, 2010.

- IGIA was also declared the winner of the ‘Best Improved Airport’ award in the Asia Pacific Region by ACI.

- Rajiv Gandhi International Airport (RGIA) was adjudged as the best airport in the 5 to 15 million passenger capacity airports in the world.

- Further, RGIA secured the fifth position amongst all airports, both worldwide and in the Asia-Pacific region. This unique achievement comes within less than two years of the green field airport having commenced operations.

- RGIA also won the ‘Essar Steel Infrastructure Excellence Award 2009’ organized by CNBC TV 18.

- Mr. Kiran Kumar Grandhi, Business Chairman - Airports and Managing Director - DIAL received SATTE’s - ‘ Young Entrepreneur Award 2009’ in the area of Travel and Tourism.

The Directors of your Company are glad to inform you that Mr. G.M. Rao, Executive Chairman of your Company was conferred with the following awards:

- ‘First Generation Entrepreneur of The Year’ at the CNBC TV18 India Business Leader Awards 2009.

- Doctorate from Andhra University - received an honorary doctorate (Doctor of Letters) from Governor of Andhra Pradesh and Chancellor of the Andhra University at the 76th Convocation on December 5, 2009.

Management Discussion and Analysis (MDA)

The Management Discussion and Analysis, 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.

Auditors and Auditors’ Report

M/s. S. R. Batliboi & Associates, Chartered Accountants and M/s. Price Waterhouse, Chartered Accountants, joint statutory auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company. M/s Price Waterhouse, Chartered Accountants have expressed their desire to discontinue as joint Statutory Auditors of the Company for the financial year 2010-11.

M/s. S. R. Batliboi & Associates, Chartered Accountants have expressed their willingness for appointment as statutory auditors and confirmed that their appointment, if made, will be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956. Special notice has also been received from a member proposing the appointment of M/s. S. R. Batliboi & Associates, Chartered Accountants as statutory auditors of the Company for the financial year 2010-11.

The Notes to Accounts forming part of the financial statements are self-explanatory and need no further explanation.

There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification or explanation.

Corporate Social Responsibility (CSR)

GMR Group believes corporates have a special and continuing responsibility towards the society. GMR Varalakshmi Foundation (GMRVF) is the CSR arm of the Group. GMRVF is actively involved in the areas of education, health, hygiene & sanitation, community development programmes, employment and livelihood by developing a sense of entrepreneurship, especially in the areas where the Group has a presence. GMRVF’s mission is to make a difference in all the above fields through empowerment and capacity building of the poorest of the poor and their institutions, especially in rural India with humility, compassion and empathy.

Details on the activities of GMRVF are covered elsewhere in the Annual Report.

Environmental Protection and Sustainability

Industrial entrepreneurial success of your company is integrated with strong Environmental Management practices across all process operations. Clean environment is our top priority and to support that several unique schemes have been implemented and continually progressed to prevent pollution and conserve natural resources to achieve sustainable development.

All the operating units are in compliance with environmental regulations. Hazardous wastes are being disposed through Pollution Control Board authorized agencies. Continuous Ambient Monitoring systems have been set up at appropriate locations in and around the plants and the Environmental performance indicators like Stack emissions, Ambient air quality etc. are much below the stipulated norms.

Vemagiri and Chennai units are certified with OHSAS 18001, ISO 14001, ISO 9001 and work is on for establishing Integrated Management System Certification for Quality, Environment, Health, and Safety in all our existing and proposed units.

At Chennai plant, fully integrated Sewerage Water Treatment Plant has been set up including Reverse Osmosis process for treating 10% of Chennai plant’s total sewage saving fresh water intake of 5,400 m3/day, which is equivalent to the water use by 100,000 people. The treated STP water is used for cooling operations and green belt development. Waste Heat Recovery Boilers generate steam for use in indirect heating of fuel storage tanks and pipelines. Solar energy is used to lighten the boundary fence.

At Vemagiri Plant the Gas Turbine uses the advanced Dry Low NOx (DLN 2.0 +) burner system to reduce NOx emissions at source. Waste heat from Gas Turbine is used for power production in Steam Turbine through Heat Recovery Steam Generator (HRSG). Reuse of Steam Condensate and HRSG is designed for zero make up.

At GMR Hyderabad International Airport Limited (GHIAL), special environment friendly design features have been incorporated for power savings by using natural sun light. The Lighting per square foot in the passenger terminal block uses only 0.9 watts of energy as against the minimum of 1.3 watts prescribed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

Process has been put in place for effective waste management system and Carbon footprint studies have been initiated aiming to reduce carbon footprint.

Delhi International Airport Private Limited (DIAL) has won Greentech Gold award Environmental Excellence in Aviation Sector two years in succession (2008 and 2009). The Greentech award is presented to company in recognition of outstanding achievements in the field of environment protection on the basis of evaluation of performance every year. DIAL is certified for its Implemented Environmental Management System ISO 14001:2004. DIAL has also undertaken initiative for the certification of new integrated passenger Terminal Building –T3 under LEED (Leadership in Energy and Environmental Design) Green Building Rating System.

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, as amended, the names and other particulars of employees are set out in the annexure ‘D’ to the Directors’ Report. 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.

Acknowledgments

Your Directors wish to express their grateful appreciation for the valuable support and cooperation received from lenders, business associates, banks, financial institutions, shareholders, various statutory authorities and society at large. Your Directors also place on record, their appreciation for the contribution, commitment and dedication of the employees of the Company and its subsidiaries at all levels

For and on behalf of the Board Sd/- G. M. Rao Executive Chairman Place: Bengaluru Date : June 10, 2010

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X