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Notes to Accounts of GMR Infrastructure Ltd.

Mar 31, 2016

1 CORPORATE INFORMATION

GMR Infrastructure Limited (''GIL'' or ''the Company'') is a public limited Company domiciled in India. Its equity shares are listed on two stock exchanges in India. The Company carries its business in the following business segments:

a. Engineering Procurement Construction (EPC)

The Company is engaged in handling EPC solutions in the infrastructure sector.

b. Others

The Company''s business also comprises of investment activity and corporate support to various infrastructure Special Purpose Vehicles (SPV).

2 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (''Indian GAAP''). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 (''the Act''), read with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3 (A) GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expenses recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit.

4 LEASES

Office premises and equipments taken by the Company are obtained on operating leases. The Company entered into certain cancellable operating lease arrangements and certain non-cancellable operating lease arrangement towards office premises. The equipments are taken on hire on need basis. There are no escalation clauses in the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The lease rentals charged during the year and maximum obligation on the long term non-cancellable operating leases as per the lease agreement are as follows:

5 INFORMATION ON JOINTLY CONTROLLED ENTITY AS PER ACCOUNTING STANDARD-27

The Company directly holds 1.74% (March 31, 2015: 0.21%) of the equity shares of GMCAC and 38.26% (March 31, 2015: 39.79%) of the equity shares of GMCAC through its subsidiary company. GMCAC is incorporated in Phillipines and is involved in development and operation of airport infrastructure.

The Company''s ownership and voting power of GMCAC along with its share in the assets, liabilities, income, expenses, contingent liabilities and commitments are as follows:

6 SEGMENT INFORMATION

The segment reporting of the Company has been prepared in accordance with Accounting Standard 17 on Segment Reporting, notified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. The primary segment reporting format is determined to be business segment as the Company''s risk and rates of return are affected predominantly by difference in the services provided. Secondary information is reported geographically.

The business segments of the Company comprise of the following:

7 CAPITAL AND OTHER COMMITMENTS Capital commitments

a) Estimated amount of contracts remaining to be executed on capital account not provided for, net of advances Rs. Nil Crore (March 31, 2015: Nil).

Other commitments

1. The Company has committed to provide financial assistance as tabulated below:

2. The Company has provided commitment to fund the cost overruns over and above the estimated project cost or cash deficiency, if any, to the lenders of the following subsidiaries, to the extent as defined in the agreements executed with the respective lenders:

3. The Company has extended comfort letters to provide continued financial support to the following subsidiaries, to ensure that these subsidiaries are able to meet their debts, commitments (including commitments towards investee entities) and liabilities as they fall due and they continue as going concerns:

4. The Company has entered into agreements with the lenders wherein the promoters of the Company and the Company has committed to hold directly or indirectly at all times at least 51% of the equity share capital of the below mentioned subsidiary Companies and not to sell, transfer, assign, dispose, pledge or create any security interest except pledge of shares to the respective lenders as covered in the respective agreements with the lenders:

5. GEL has issued following fully paid up CCCPS:

During the year ended March 31, 2011, GEL had issued 13,950,000 CCCPS of Rs. 1,000 each. These preference shares were held by Claymore investments (Mauritius) Pte Limited, IDFC Private Equity Fund III, Infrastructure Development Finance Company Limited, IDFC Investment Advisors Limited, Ascent Capital Advisors India Private Limited, and Argonaut Ventures (collectively called as Investors). During the year ended March 31, 2014, GEL has entered into an amended and restated share subscription and shareholders agreement (''Amended SSA'') with the investors, the Company and other GMR group companies. The Investors continue to hold 6,900,000 CCCPS in GEL and a new investor GKFF Capital has subscribed to additional 325,000 CCCPS of Rs. 1,000 each (collectively referred to as ''Portion B securities''). As per the Amended SSA and Share Purchase Agreement (''SPA'') between the investors, GEL and other GMR Group Companies, 7,050,000 CCCPS with a face value of Rs. 705.00 Crore (''Portion A Securities'') have been bought by GREEL and GEPML for a consideration ofRs. 11,69.17 Crore. Portion A securities shall be converted into equity shares of GEL as per the terms prescribed in clause 5 of the SPA not later than the date of conversion of Portion B securities. As defined in the terms of Amended SSA, GEL has to provide an exit to the Portion B Securities investors within 30 months from last return date (November 29, 2013) at the agreed price of Rs. 1,278.67 Crore ("Investor exit amount"). In case of non-occurrence of QIPO within 24 months from the last return date, GMR Group may give an exit to Portion B securities investors at investor exit amount by notifying them the intention to purchase the preference shares within 30 days from the expiry of the 24th month. In case of non-occurrence of QIPO or no notification from GMR group companies as stated aforesaid, the Portion B securities investors have the sole discretion to exercise the various rights under clause 10 of the Amended SSA. Prior to the completion of the transaction as per the Subscription Agreement as detailed above, the Portion B Securities held by the Investors need to be converted into a fixed number of equity shares of GEL along with the Portion A Securities held by GEPML and GREEL.

During the year ended March 31,2016, the Investors have not exercised various rights under clause 10 of the Amended SSA and the management of GEL is currently negotiating with the Investors to amend the Amended SSA.

6. During the year ended March 31, 2011 GAL has issued 2,298,940 non-cumulative compulsory convertible non-participatory preference shares (CCPS 1) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 229.89 Crore at a premium of Rs. 2,885.27 each totaling to Rs. 663.31 Crore to Macquaire SBI Infrastructure Investments 1 Limited, ("Investor I") for funding and consolidation of airport related investments by the Group. Further, during the year ended March 31.2013 GAL issued 1,432,528 non-cumulative compulsory convertible non- participatory preference shares (CCPS 2) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 143.25 Crore at a premium of Rs. 3,080.90 each totaling to Rs. 441.35 Crore to Standard Chartered Private Equity (Mauritius) III Limited, JM Financial - Old Lane india Corporate Opportunities Fund I Limited, JM Financial Trustee Company Private Limited, JM Financial Products Limited and Build India Capital Advisors LLP ("Investors II"). The Company and GAL have provided Investor I and Investors II various conversion and exit options at an agreed internal rate of return as per the terms of the Restructuring Options Agreements and Investment agreements executed between the Company, GAL, Investor I and Investor II.

As per the terms of CCPS 1 S CCPS 2, these were either convertible into equity shares on or before April 06, 2015 or the Company had an option to exercise the call Options requiring the investors to transfer these shares in favour of the Company. The Company exercised such call option on April 01, 2015 on all these shares. The payment of call price is subject to the prior approval of the Reserve Bank of India. The Company and the Investors thereafter, basis mutual discussions, decided to restructure the investments, which is subject to prior approval of Reserve Bank of india and have filed a joint application to the Reserve Bank of India on October 01, 2015. As per the revised understanding, these shares will be converted into equity shares in two tranches ending on June 2017. Pending approval of RBI, the Company and these shareholders and GAL have signed an ''Amended and Restated Investment Agreement'' on December 24, 2015 which shall be effective upon receipt of approval from RBI. Further the Company has also entered into a Share Purchase Agreement with JM Financials Trustee Private Limited (JMFI) and Build India Capital Advisors (BICA) on December 21,2015 to buy out their shares. Share transfer is yet to be completed."

7. For commitment relating to lease arrangements (refer note 29).

8. The Company has certain long term unquoted investments which have been pledged as security towards loan facilities sanctioned to the Company and the investee Companies (refer note 13).

9. During the year ended March 31,2014, the Company along with its subsidiaries entered into a definitive agreement (''SPA'') with Malaysia Airports MSC Sdn Bhd (''Buyer'') for sale of 40% equity stake in their jointly controlled entities, ISG, LGM. Pursuant to the SPA entered with the buyer, the Company along with its subsidiaries had provided a guarantee of Euro 4.50 Crore towards tax claims, as specified in the SPA for a period till May 2019.

10. For commitment relating to FCCB''s (refer note 5(19)).

8 As per the transfer pricing rules prescribed under the IT Act, the Company is examining domestic and international transactions and documentation in respect thereof to ensure compliance with the said rules. The management does not anticipate any material adjustments with regard to the transaction involved.

9 Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

10 Previous year''s figures have been regrouped and reclassified, wherever necessary, to conform to the current year''s classifications.


Mar 31, 2015

1. CORPORATE INFORMATION

GMR Infrastructure Limited (''GIL'' or ''the Company'') is a public limited Company domiciled in India. Its equity shares are listed on two stock exchanges in India. The Company carries its business in the following business segments:

a. Engineering Procurement Construction (EPC)

The Company is engaged in handling EPC solutions in the infrastructure sector.

b. Others

The Company''s business also comprises of investment activity and corporate support to various infrastructure Special Purpose Vehicles (SPV).

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (''Indian GAAP''). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 (''the Act''), read with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3.Share Capital:

a) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1 per share. Every member holding equity shares therein shall have voting rights in proportion to the member''s share of the paid up equity share capital. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all the preferential amounts. The distribution will be in proportion to the number of equity shares held by the equity shareholders.

b) Terms / rights attached to CCPS

During the year ended March 31, 2014, pursuant to the equity shareholders'' approval obtained on March 20, 2014, the Company issued 11,366,704 CCPS of face value of Rs. 1,000 each comprising of (a) 5,683,351 Series A CCPS each fully paid up, carrying a coupon rate of 0.001% per annum (''p.a.'') and having a term of 17 months from the date of allotment and (b) 5,683,353 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 SEBI (Issue of Capital Disclosure Requirements) Regulations, 2009, as amended (''ICDR Regulations''). The number of equity shares allotted to the Investors upon conversion of the Investor Securities shall be on the basis of the minimum permissible price, computed in accordance with Regulation 76 read with Regulation 71(b) of the SEBI ICDR Regulations on the conversion date.

The preference shareholders have a right to attend General Meetings of the Company and vote on resolutions directly affecting their interest. In the event of winding up, the Company would repay the preference share capital in priority to the equity shares of the Company but it does not confer any further right to participate either in profits or assets of the Company.

(c) Pursuant to the approval of the Management Committee of the Board of Directors dated April 18, 2015, the Company approved the allotment of 934,553,010 equity shares of face value of Rs. 1 each at a price of Rs. 15 per equity share (including share premium of Rs. 14 per equity share) for an amount aggregating to Rs. 1,401.83 Crore to the existing equity shareholders of the Company on rights basis in the ratio of 3 equity shares for every 14 equity shares held by equity shareholders under chapter IV of the ICDR Regulations and provisions of all other applicable laws and regulations.

(d) On July 02, 2014, the Board of Directors of the Company have approved an issue and allotment of up to 180,000,000 warrants having an option to apply for and be allotted equivalent number of equity shares of face value of Rs. 1/- each on a preferential basis under chapter VII of the ICDR Regulations and provisions of all other applicable laws and regulations and accordingly the Company has received an advance of Rs. 141.75 Crore against such share warrants. The Shareholders have approved the aforesaid issue of warrants through postal ballot on August 12, 2014.

(e) Pursuant to the approval of the Management Committee of the Board of Directors dated July 10, 2014, the Company issued 468,817,097 equity shares of Rs. 1 each, at an issue price of Rs. 31.50 per equity share (which is at a discount of Rs. 1.64 per equity share on the floor price of Rs. 33.14 per equity share and including Rs. 30.50 per share towards share premium) aggregating to Rs. 1,476.77 Crore to qualified institutional buyers ("QIB") under chapter VIII of the ICDR Regulations and provisions of all other applicable laws and regulations. The Shareholders had approved the aforesaid issue of equity shares by way of a special resolution dated March 20, 2014.

4. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit.

5. INFORMATION ON JOINTLY CONTROLLED ENTITY AS PER ACCOUNTING STANDARD

The Company directly holds 0.21% (March 31, 2014: Nil) of the equity shares of GMCAC and 39.79% (March 31, 2014: Nil) of the equity shares of GMCAC through its subsidiary company. GMCAC is incorporated in Phillipines and is involved in development and operation of airport infrastructure.

The Company directly held 27.55% of the equity shares of ISG and 12.45% of the equity shares of ISG through its subsidiary company. ISG is incorporated in Turkey and is involved in development and operation of airport infrastructure. During the year ended March 31, 2014, the Company along with its subsidiaries had entered into a definitive agreement with Malaysia Airports MSC Sdn Bhd (Buyer) for sale of their 40% equity stake in their jointly controlled entities; ISG and LGM, as detailed in note 26(2).

6. SEGMENT INFORMATION

The segment reporting of the Company has been prepared in accordance with Accounting Standard 17 on Segment Reporting, notified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. The primary segment reporting format is determined to be business segment as the Company''s risk and rates of return are affected predominantly by difference in the services provided. Secondary information is reported geographically.

The business segments of the Company comprise of the following:

Segment Description of Activity

EPC Handling of engineering, procurement and construction activities in Infrastructure Sector.

Others Investment activity and corporate support to various infrastructure SPVs.

7. RELATED PARTIES

a) Names of related parties and description of relationship:

Description of Name of the related parties relationship Holding Company GMR Holdings Private Limited (GHPL)

Subsidiary GMR Renewable Energy Limited (GREEL) Companies GMR Energy Limited (GEL)

GMR Power Corporation Limited (GPCL)

GMR Vemagiri Power Generation Limited (GVPGL)

GMR Energy Trading Limited (GETL)

GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL)

GMR Mining and Energy Private Limited (GMEL)

GMR Kamalanga Energy Limited (GKEL)

GMR Consulting Services Private Limited (GCSPL)

GMR Rajahmundry Energy Limited (GREL)

SJK Powergen Limited (SJK)

GMR Coastal Energy Private Limited (GCEPL)

GMR Bajoli Holi Hydropower Private Limited (GBHHPL)

GMR Chhattisgarh Energy Limited (GCHEPL)

GMR Londa Hydropower Private Limited (GLHPPL)

GMR Kakinada Energy Private Limited (GKEPL)

EMCO Energy Limited (EMCO)

Delhi International Airport Private Limited(DIAL)

Delhi Aerotropolis Private Limited (DAPL)

GMR Hyderabad International Airport Limited (GHIAL)

Hyderabad Menzies Air Cargo Private Limited (HMACPL)

Hyderabad Airport Security Services Limited (HASSL)

GMR Hyderabad Airport Resource Management Limited (GHARML)

GMR Hyderabad Aerotropolis Limited (HAPL)

GMR Hyderabad Aviation SEZ Limited (GHASL)

GMR Hyderabad Multiproduct SEZ Limited (GHMSL)

GMR Hotels and Resorts Limited (GHRL)

Gateways for India Airports Private Limited (GFIAL)

GMR Highways Limited (GMRHL)

GMR Tuni Anakapalli Expressways Limited (GTAEPL)

GMR Highways Projects Private Limited (GHPPL)

GMR Tambaram Tindivanam Expressways Limited (GTTEPL)

GMR Ambala Chandigarh Expressways Private Limited (GACEPL)

GMR Pochanpalli Expressways Limited (GPEPL)

GMR Hyderabad Vijayawada Expressways Private Limited (GHVEPL)

GMR Chennai Outer Ring Road Private Limited (GCORRPL)

GMR OSE Hungund Hospet Highways Private Limited (GOSEHHHPL)

GMR Kishangarh Udaipur Ahmedabad Expressways Limited (GKUAEL)

GMR Krishnagiri SEZ Limited (GKSEZ)

Advika Properties Private Limited (APPL)

Aklima Properties Private Limited (AKPPL)

Amartya Properties Private Limited (AMPPL)

Baruni Properties Private Limited (BPPL)

Camelia Properties Private Limited (CPPL)

Eila Properties Private Limited (EPPL)

Gerbera Properties Private Limited (GPL)

Lakshmi Priya Properties Private Limited (LPPPL)

Honeysuckle Properties Private Limited (HPPL)

Idika Properties Private Limited (IPPL)

Krishnapriya Properties Private Limited (KPPL)

Nadira Properties Private Limited (NPPL)

Prakalpa Properties Private Limited (PPPL)

Purnachandra Properties Private Limited (PUPPL)

Shreyadita Properties Private Limited (SPPL)

Sreepa Properties Private Limited (SRPPL)

Bougainvillea Properties Private Limited (BOPPL)

Honeyflower Estates Private Limited (HFEPL)3

Namitha Real Estate Private Limited (NREPL)3

GMR Gujarat Solar Power Private Limited (GGSPPL)

GMR Airports Limited (GAL)

GMR Corporate Affairs Private Limited (GCAPL)

GMR SEZ & Port Holdings Private Limited (GSPHPL)

GMR Aviation Private Limited (GAPL)

GMR Business Process and Services Private Limited (GBPSPL)

Dhruvi Securities Private Limited (DSPL)

Himtal Hydro Power Company Private Limited(HHPPL)

GMR Upper Karnali Hydro Power Limited (GUKPL)

GMR Energy (Mauritius) Limited (GEML)

GMR Lion Energy Limited (GLEL)

GMR Energy (Cyprus) Limited (GECL)

GMR Energy (Netherlands) BV (GENBV)

PT Unsoco (PT)

PT Dwikarya Sejati Utma (PTDSU)

PT Duta Sarana Internusa (PTDSI)

PT Barasentosa Lestari (PTBSL)

GMR Infrastructure (Mauritius) Limited (GIML)

GMR Infrastructure (Cyprus) Limited (GICL)

GMR Infrastructure Overseas (Malta) Limited (GIOSL) (Formerly known as GMR Infrastructure Overseas Sociedad Limitada)

GMR Infrastructure (UK) Limited (GIUL)

GMR Airports (Malta) Limited (GMRAML)

GMR Infrastructure (Global) Limited (GIGL)

GMR Infrastructure (Singapore) Pte Limited(GISPL)

GMR Energy (Global) Limited (GEGL)

Homeland Energy Group limited (HEGL)

Homeland Energy Corporation (HEC)12

Homeland Mining & Energy SA (Pty) imited (HMES)12

Homeland Coal Mining (Pty) Limited (HCM) 12

Ferret Coal (Kendal) (Pty) Limited (FCK)12

Corpclo 331 (Pty) Limited (CPL)12

GMR Maharashtra Energy Limited (GMAEL)

GMR Bundelkhand Energy Private Limited (GBEPL)

GMR Uttar Pradesh Energy Private Limited (GUPEPL)

GMR Hosur Energy Limited (GHOEL)

Karnali Transmission Company Private Limited (KTCPL)

Marsyangdi Transmission Company Private Limited (MTCPL)

GMR Indo-Nepal Energy Links Limited (GINELL)

GMR Indo-Nepal Power Corridors Limited (GINPCL)

Aravali Transmission Service Company Limited (ATSCL)

Maru Transmission Service Company Limited (MTSCL)

GMR Energy Projects (Mauritius) Limited (GEPML)

Hyderabad Duty Free Retail Limited (HDFRL)

GMR Airport Developers Limited (GADL)

GADL International Limited (GADLIL)

GADL (Mauritius) Limited (GADLML)

Deepesh Properties Private Limited (DPPL)

Larkspur Properties Private Limited (LAPPL)

Padmapriya Properties Private Limited (PAPPL)

Radha Priya Properties Private Limited (RPPL)

Pranesh Properties Private Limited (PRPPL)

Kakinada SEZ Private Limited (KSPL)

GMR Power Infra Limited (GPIL)

GMR Male International Airport Private Limited (GMIAL)

GMR Male Retail Private Limited (GMRPL)

GMR Coal Resources Pte Limited (GCRPL)

GMR Airport Handling Services Company Limited (GAHSCL)

GMR Airport Global Limited (GAGL)

GMR Hosur Industrial City Private Limited (GHICL) (Formerly known as Lantana Properties Private Limited (LPPL))

Asteria Real Estate Properties Private Limited (AREPL)

GMR Infrastructure Overseas Limited (GIOL)

GMR Hosur EMC Private Limited( GHEMCPL)2

GMR Airports (Mauritius) Limited (GAML)2

Delhi Duty Free Services Private Limited (DDFS)6

GMR Hyderabad Airport Power Distribution Limited (GHAPDL)

GMR Aerospace Engineering Limited (GAECL) (formerly known as MAS GMR Aerospace Engineering Company Limited (MGAECL))10

Delhi Airport Parking Services Private Limited (DAPSL)10

GMR Aero Technic Limited (GATL) (formerly known as MAS GMR Aero Technic Limited (MGATL))10

East Godavari Power Distribution Company Private Limited (EGPDCPL)9

Suzone Properties Private Limited (SUPPL)9

Lilliam Properties Private Limited (LIPPL)9

GMR Utilities Private Limited (GUPL)1

Enterprises where Istanbul Sabiha Gokcen Uluslararasi Havalimani significant Yer Hizmetleri Anonim Sirketi (SGH) 7 influence exists Rampia Coal Mine and Energy Private Limited (RCMEPL)

TVS GMR Aviation Logistics Limited (TVS GMR)7

Limak GMR Construction JV(CJV)

Celebi Delhi Cargo Terminal Management India Private Limited (CDCTM)

Delhi Cargo Service Centre Private Limited (DCSCPL)8

Delhi Aviation Services Private Limited (DASPL)

Travel Food Services (Delhi Terminal 3) Private Limited (TFS)

Devyani Food Street Private Limited (DFSPL)8

Delhi Select Services Hospitality Private Limited (DSSHPL)8

Wipro Airport IT Services Limited (WAISL)

TIM Delhi Airport Advertisment Private Limited (TIM)

LGM Havalimani Isletmeleri Ticaret Ve Turizm Anonim Sirketi (LGM)7

Tshedza Mining Resource (Pty) Limited (TMR)7

Nhalalala Mining (Pty) Ltd (NML)7

PT Golden Energy Mines Tbk (PTGEMS)

PT Tanjung Belit Bara Utama (TBBU)

PT Roundhill Capital Indonesia (RCI)

PT Kuansing Inti Makmur (KIM)

PT Trisula Kencana Sakti (TKS)

PT Borneo Indobara (BIB)

PT Karya Cemerlang Persada (KCP)

PT Bungo Bara Utama (BBU)

PT Bara Harmonis Batang Asam (BHBA)

PT Berkat Nusantara Permai (BNP)

PT Bumi Anugerah Semesta (BAS)5

GEMS Trading Resources Pte Limited (GEMSCR) (Formerly known as GEMS Coal Resources Pte Limited)

Delhi Aviation Fuel Facility Private Limited (DAFF)

Laqshya Hyderabad Airport Media Private Limited (Laqshya)

Jadcherla Expressways Private Limited (JEPL)4 (formerly known as GMR Jadcherla Expressways Limited (GJEPL))

Ulundurpet Expressways Private Limited (UEPL)4 (GMR Ulundurpet Expressways Private Limited (GUEPL))

GMR Trading Resources Pte. Limited (GEMSCR)

Asia Pacific Flight Training Academy Limited (APFT)

East Delhi Waste Processing Company Private Limited (EDWPCPL)4

Enterprises where Welfare Trust of GMR Infra Employees (GWT) key managerial personnel or their GMR Varalaxmi Foundation (GVF) relatives exercise significant GMR Family Fund Trust (GFFT) influence (Where transactions GMR Infra Ventures LLP (GIVLLP) have taken place ) GMR Enterprises Private Limited (GEPL)

Grandhi Enterprises Private Limited (GREPL)

GMR Business and Consulting LLP (GBC)

Jointly controlled Istanbul Sabiha Gokcen Uluslararasi Havalimani enity Yatirim Yapim Ve Isletme Anonim Sirketi (ISG)7

GMR Megawide Cebu Airport Corporation (GMCAC)11

Fellow Subsidiaries Raxa Security Services Limited (RSSL) (Where transactions have taken place ) GMR Projects Private Limited (GPPL)

GMR Hebbal Towers Private Limited (GHTPL)

GMR Bannerghatta Properties Private Limited (GBPPL)

GMR Sports Private Limited (GSPL)

GMR Holding Malta Limited (GHML)

Ravi Verma Realty Private Limited (RRPL)

Cadence Retail Private Limited (CRPL)

GEOKNO India Private Limited (GEOKNO)

Key management Mr. G.M. Rao (Executive Chairman) personnel and their relatives Mrs. G Varalakshmi (Relative)

Mr. G.B.S. Raju (Director)

Mr. Grandhi Kiran Kumar (Managing director w.e.f July 28, 2013)

Mr. O.B. Raju (Director)

Mr. Srinivas Bommidala (Director)

Mr. B.V. N. Rao (Director) (March 31,2014: Resigned as a Managing Director w.e.f July 28, 2013)

Mr. C.P. Sounderarajan (Company Secretary)

Mr. Madhva Bhimacharya Terdal (Group CFO )

1. Subsidiaries incorporated during the year ended March 31,2015.

2. Subsidiaries incorporated during the previous year.

3. Subsidiaries acquired during the previous year.

4. Ceased to be a subsidiary during the previous year and became an enterprise where significant influence exists.

5. Subsidiary of PTGEMS incorporated during the previous year.

6. Ceased to be a jointly controlled entity and became a subsidiary during the previous year.

7. Ceased to be a jointly controlled entity during the previous year.

8. Ceased to be a jointly controlled entity during the year ended March 31,2015.

9. Subsidiaries acquired during the year ended March 31,2015

10. Ceased to be a jointly controlled entity and became a subsidiary during the year ended March 31,2015.

11. Jointly controlled entity incorporated during the year ended March 31,2015.

12. Ceased to be a subsidiary during the year ended March 31,2015.

8. CAPITAL AND OTHER COMMITMENTS:

a) Capital commitments

Estimated amount of contracts remaining to be executed on capital account not provided for, net of advances '' Nil Crore (March 31, 2014: Rs. 0.01 Crore).

b) During the year ended March 31, 2011 GAL has issued 2,298,940 non-cumulative compulsory convertible non-participatory preference shares (CCPSI) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 229.89 Crore at a premium of Rs. 2,885.27 each totaling to Rs.663.31 Crore to Macquaire SBI Infrastructure Investments 1 Limited, ("Investor I") for funding and consolidation of airport related investments by the Group. Further, during the year ended March 31.2013 GAL issued 1,432,528 non-cumulative compulsory convertible non-participatory preference shares (CCPS 2) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 143.25 Crore at a premium of Rs. 3,080.90 each totaling to Rs. 441.35 Crore to Standard Chartered Private Equity (Mauritius) III Limited, JM Financial - Old Lane India Corporate Opportunities Fund I Limited, JM Financial Trustee Company Private Limited, JM Financial Products Limited and Build India Capital Advisors LLP ("Investors II"). The Company and GAL have provided Investor I and Investors II various conversion and exit options at an agreed internal rate of return as per the terms of the Restructuring Options Agreements and Investment agreements executed between the Company, GAL, Investor I and Investor II.

Further , as per the terms of CCPSI & CCPS-2, these were either convertible into equity shares on or before April 6,2015 or the Company has an option to exercise the call options anytime between July 5,2014 to April 5,2015 requiring the investors to transfer these shares in favour of the Company.

On the basis of the Investor Agreement the Company, vide its letter dated April 01, 2015 has exercised the call Option to acquire CCPSI & CCPS-2 , at a Call Price to be computed in the manner provided in the respective agreements entered between the investors and the Company. The completion of transaction is pending receipt of requisite approvals from the relevant authorities.

c) For commitment relating to lease arrangements (refer note 29).

d) The Company has certain long term unquoted investments which have been pledged as security towards loan facilities sanctioned to the Company and the investee Companies (refer note 13).

e) Refer note 26 (2) for tax commitment relating to sale of investment in ISG.

f) Refer note 3 (c) for commitments relating to CCPS issued by the Company.

9. CONTINGENT LIABILITIES

a) Contingent liabilities include

As at

Particulars March 31,2015 March 31,2014 (Rs. in Crore) (Rs. in Crore)

Corporate guarantees availed by the group Companies

(a) sanctioned 25,247.37 21,508.80

(b) outstanding 16,923.36 15,566.28

Bank guarantees

(a) sanctioned 300.00 300.00

(b) outstanding 190.98 149.43

Letter of comfort provided on behalf of group Companies to banks

(a) sanctioned 1,435.00 1,435.00

(b) outstanding 277.22 74.19

Matters relating to indirect taxes 93.54 26.72 under dispute

Matters relating to direct taxes 5.83 under dispute1

Claims against the company not 53.02 - acknowlegded as debts

1 a) Search under Section 132 of the IT Act was carried out at the premises of the Company by the Income Tax Authorities on October 11, 2012, followed by search closure visits on various dates thereafter during the year ended March 31, 2013 to check the compliance with the provisions of the IT Act. The Income Tax Department has subsequently sought certain information / clarifications. During the year ended March 31, 2015, the Company received certain orders/demand amounting to Rs. 5.83 Crore under Section 143(3) r.w.s.153A of the IT Act from the Income Tax Authorities in respect to Assessment Years 2007-08 & 2008-09. The management of the Company has filed the appeal on April 16, 2015 against the above orders and believes that these demands are not tenable and it has complied with all the applicable provisions of the IT Act with respect to its operations.

b) Refer note 26 (2) in respect of future claims if any arising on account of the divestment of shareholding in ISG.

10. The Company has received letter NSE/LIST/243830-W dated July 4,2014 from the National Stock Exchange of India Limited (''NSE'') whereby Securities and Exchange Board of India (''SEBI'') has directed NSE to advise the Company to rectify the qualification in respect of the matter described in the paragraph on ''Basis for Qualified Opinion'' in the Auditors'' Report on the standalone financial statements of the Company for the year ended March 31, 2013, within the end of the next reporting period under paragraph 5(d)(iii) of the SEBI Circular Number CIR/CFD/DIL/7/2012 dated August 13, 2012. The Company is in the process of seeking clarifications from NSE in this regard.

11. As per the transfer pricing rules prescribed under the IT Act, the Company is examining domestic and international transactions and documentation in respect thereof to ensure compliance with the said rules. The management does not anticipate any material adjustments with regard to the transaction involved.

12. Certain amounts(currency value or percentages) shown in the various tables and paragraphs included in the financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

13. Previous year''s figures have been regrouped and reclassified, wherever necessary, to conform to the current year''s classifications.


Mar 31, 2014

NOTE 1 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit.

NOTE 2 LEASES

Office premises and equipments taken by the Company are obtained on operating lease. The Company entered into certain cancellable operating lease ar- rangements and certain non-cancellable operating lease arrangements towards office premises. The equipments are taken on hire on need basis. There are no escalation clauses in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. The lease rentals charged during the year and maximum obligation on the long term non-cancellable operating leases as per the lease agreement are as follows:

NOTE 3

The Company has an investment of Rs. 357.35 Crore (March 31, 2013: Rs. 341.56 Crore) [including loans of Rs. 117.76 Crore (March 31, 2013: Rs. 104.97 Crore), share application money pending allotment of Rs.Nil (March 31, 2013: Rs. 20.00 Crore) and investment in equity/ preference shares of Rs. 239.59 Crore (March 31, 2013: Rs. 216.59 Crore) made by the Company and its subsidiaries] in GACEPL as at March 31, 2014. GACEPL has been incurring losses since the commencement of commercial operations. The management believes that these losses are primarily attributable to loss of revenue arising as a result of diversion of partial traffic on parallel roads. The matter is currently under arbitration and the arbitration tribunal has passed an interim order staying the payment of negative grant which was due during the year ended March 31, 2014. Based on internal assessment and a legal opinion obtained by the management, the management of GACEPL is confident that it will be able to claim compensation from relevant authorities for the loss it has suffered due to such diversion of traffic and accordingly, the investment in GACEPL has been carried at cost and no provision for diminution in the value of investments has been made in the financial statements of the Company as at March 31, 2014.

NOTE 4 SEGMENT INFORMATION

The segment information of the Company has been prepared in accordance with Accounting Standard 17 on Segment Reporting notified under the Companies Act, 1956, read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. The primary segment reporting format is determined to be business segment as the Company''s risk and rates of return are affected predominantly by difference in the services provided. Secondary information is reported geographically.

NOTE 5 CAPITAL AND OTHER COMMITMENTS Capital commitments

a) Estimated amount of contracts remaining to be executed on capital account not provided for, net of advances Rs. 0.01 Crore (March 31, 2013: Rs. 0.13 Crore).

5. For commitments relating to purchase of equity/ preference shares (refer note 35(b) and (c)).

6. For commitment relating to lease arrangements (refer note 29).

7. The Company has certain long term unquoted investments which have been pledged as security towards loan facilities sanctioned to the Company and the investee Companies (refer note 13).

8. Refer note 26 (3) for tax commitment relating to sale of investment in ISG.

9. Refer note 3 (c) for commitments relating to CCPS issued by the Company.

NOTE 6 CONTINGENT LIABILITIES

a) Contingent liabilities include

As at

Particulars March 31, 2014 March 31, 2013 (Rs. in Crore) (Rs. in Crore)

Corporate guarantees availed by the group Companies

(a) sanctioned 21,508.80 20,881.87

(b) outstanding 15,566.28 16,224.86 Bank guarantees

(a) sanctioned 300.00 300.00

(b) outstanding 149.43 60.53 Letter of comfort availed by the group Companies

(a) sanctioned 1,435.00 72.78

(b) outstanding 74.19 72.27 Matters relating to indirect taxes under dispute 26.72 26.72

"During the year ended March 31, 2011, GEL had issued 13,950,000 CCCPS of Rs. 1,000 each. These preference shares were held by Claymore Investments (Mauritius) Pte Limited, IDFC Private Equity Fund III, Infrastructure Development Finance Company Limited, IDFC Investment Advisors Limited, Ascent Capital Advisors India Private Limited, and Argonaut Ventures (collectively called as Investors). These preference shares were convertible upon the occurrence of QIPO of equity shares of GEL. In case of non-occurrence of QIPO within 3 years of the closing date, as defined in the terms of share subscription and shareholders agreement between the parties, investors had the right to require the Company to purchase the preference shares or if converted, the equity shares in GEL at an agreed upon internal rate of return (''IRR''). In case the Company failed to purchase the preference shares within 180 days from the date of notice by the Investors, the CCCPS holder had the sole discretion to exercise the various rights under clause 11.18 of the share subscription and shareholders agreement including the conversion of CCCPS into equity shares of GEL / buyback of the converted shares by GEL.

During the year ended March 31, 2014, GEL has entered into an amended and restated share subscription and shareholders agreement (''Amended SSA'') with the investors, the Company and other GMR group companies, in accordance to which the Investors continue to hold 6,900,000 CCCPS in GEL and a new investor GKFF Capital has subscribed to additional 325,000 CCCPS of Rs. 1,000 each (collectively referred to as ''Portion B securities''). Further on March 27, 2014, GEL converted 1,344,347 portion B securities of Investors into 110,554,848 equity shares of Rs. 10 each at a premium of Rs. 2.16 per share as per the terms of clause 4.2 of the Amended SSA so as to enable the Portion B securities investors to participate in proposed QIPO by way of an offer for sale whenever such QIPO is made.

As per the Amended SSA and Share Purchase Agreement (''SPA'') between the investors, GEL and other GMR Group Companies, 7,050,000 CCCPS with a face value of Rs. 705.00 Crore (''Portion A Securities'') have been bought by GREEL and GEPML for a consideration of Rs. 1,169.17 Crore. Portion A securities shall be converted into equity shares of GEL as per the terms prescribed in clause 5 of the SPA not later than the date of conversion of Portion B securities. As defined in the terms of Amended SSA, GEL has to provide an exit to the Portion B Securities investors within 30 months from last return date (November 29, 2013) at the agreed price of Rs. 1,278.67 Crore ("Investor exit amount"). In case of non-occurrence of QIPO within 24 months from the last return date, GMR Group may give an exit to Portion B securities investors at investor exit amount by notifying them the intention to purchase the preference shares within 30 days from the expiry of the 24th month. In case of non-occurrence of QIPO or no notification from GMR group companies as stated aforesaid, the Portion B securities investors have the sole discretion to exercise the various rights under clause 10 of the Amended SSA."

c) During the year ended March 31, 2011 GAL has issued 2,298,940 non-cumulative compulsory convertible non-participatory preference shares (CCPSI) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 229.89 Crore at a premium of Rs. 2,885.27 each totaling to Rs. 663.31 Crore to Macquaire SBI Infrastructure Investments 1 Limited, ("Investor I") for funding and consolidation of airport related investments by the Group. Further, during the year ended March 31.2013 GAL issued 1,432,528 non-cumulative compulsory convertible non-participatory preference shares (CCPS 2) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 143.25 Crore at a premium of Rs. 3,080.90 each totaling to Rs. 441.35 Crore to Standard Chartered Private Equity (Mauritius) III Limited, JM Financial - Old Lane India Corporate Opportunities Fund I Limited, JM Financial Trustee Company Private Limited, JM Financial Products Limited and Build India Capital Advisors LLP ("Investors II"). The Company and GAL have provided Investor I and Investors II various conversion and exit options at an agreed internal rate of return as per the terms of the Restructuring Options Agreements and Investment agreements executed between the Company, GAL, Investor I and Investor II.

NOTE 7

The investment by GEL in equity shares/ preference shares of the following subsidiary Companies has been funded by the Company against an agreement to pass on any benefits or losses out of investments by GEL to the Company and has been approved by the Board of Directors of both the Companies. During the current year, GEL has disposed off its investments in DIAL at par to GAL.

NOTE 8

The Company through its subsidiary GIML has made an investment of Rs. 190.97 Crore (USD 3.16 Crore) (including equity share capital of Rs. 139.73 Crore and share application money, pending allotment of Rs. 51.24 Crore) towards 77% holding in GMIAL and GIML has pledged deposits of Rs.871.06 Crore (USD 14.40 Crore) towards loan taken by GMIAL from its lenders. Further the Company has given a corporate guarantee of Rs. 2,540.58 Crore (USD 42.00 Crore) to the lenders in connection with the borrowings made by GMIAL.

GMIAL 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. It was also stated that MACL would take over the possession and control of MIA within 7 days of the said letter. Though GMIAL denied that the contract was void ab initio, MACL took over the possession and control of the MIA and GMIAL vacated the airport effective December 8, 2012. This has resulted in the GMIAL principal activity becoming impossible from the date of takeover. The matter is currently under arbitration and the procedural meeting was held on April 10, 2013. On March 15, 2014, Government of Maldives (''GoM'') and MACL have served a case summary which sets out a new case that the claimants wish to advance at trial and amended pleadings have been received on March 24, 2014. Subsequent to March 31, 2014, the hearings of liability issues have taken place from April 10, 2014 to April 16, 2014 and the tribunal has not specified any timescales to produce any award. GMIAL is in the process of seeking remedies under the aforesaid concession agreement and the outcome of the arbitration is uncertain as at March 31, 2014. In view of the aforesaid matter, GMIAL continues to reflect assets amounting to Rs. 1,431.50 crore (USD 23.66 crore) including claim recoverable of Rs. 1,062.90 crore (USD 17.57 crore) at their carrying values as at March 31, 2014, net of assets written off of Rs. 202.61 crore during the year ended March 31, 2013. GMIAL''s ability to continue its future business operations and consequential impact on investments made / guarantees given by the Company and GIML is solely dependent on the outcome of arbitration and / or a negotiated settlement.

Further, GMIAL had executed work construction contracts with GADLIL and other service providers for rehabilitation, expansion, modernization of Male International Airport. Pursuant to aforesaid takeover of airport, GMIAL has terminated the contracts with GADLIL and these service providers. As per the terms of contracts, in the event of discontinuation of construction, GMIAL is required to pay termination payment to the service providers. GMIAL has received claims of around USD 8.00 crore as at March 31, 2014 from GADLIL and other service providers. However, no such claims relating to the termination of contracts have been recognised as at March 31, 2014 since the amounts payable are not certain.

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 value of the assets taken over by the GoM / MACL and the subsequent expenditure incurred by GMIAL as at March 31, 2014 and accordingly these financial statements of the Company do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 9

The Company''s subsidiaries GEL and GVPGL are engaged in the business of generation and sale of electrical energy from its two gas based power plants of 220 MW and 387 MW situated at Kakinada and Vemagiri respectively. Further, GREL a subsidiary is constructing a gas based power plant. In view of lower supplies/ availability of natural gas to the power generating companies in India, these aforesaid entities'' are facing shortage of natural gas supply and delays in securing gas linkages. As a result, GEL and GVPGL have not generated and sold electricity since April 2013 and May 2013 respectively and have been incurring losses on account of the aforesaid shortage of natural gas supply, thereby resulting in erosion of net worth and usage of short term funds for long term purposes. The Gas Sales and Purchase Agreements for supply of natural gas in GEL and GVPGL have expired on March 31, 2014 and GEL and GVPGL are in the process of renewal of the same. Further, GREL has not yet commenced commercial operations pending linkages of natural gas supply. These aforesaid entities are actively pursuing / making representations with various government authorities to secure the natural gas linkage / supply as the natural gas supplies from KG D6 basin have dropped significantly from September 2011 onwards. GREL, for its 768 MW gas based power plant, which is under construction at Rajahmundry, has applied for allocation of gas and the Ministry of Petroleum and Natural Gas (''MoPNG'') is yet to allocate the gas linkage.

The consortium of lenders have approved the reschedulement of Commercial Operation Date (''COD'') of the plant under construction to April 1, 2014 and repayment of project loans. GREL has sought further extension of COD and repayment of project loans with the consortium of lenders in the absence of gas linkage. The Company, these aforesaid entities and the Association of Power Producers are closely monitoring the macro situation and are evaluating various approaches / alternatives to deal with the situation and the management is confident that the Government of India would take necessary steps / initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. Despite the aforementioned reasons, based on business plan and valuation assessment, the management is confident that GEL and GVPGL will be able to generate sufficient profits in future years, GREL will get a further extension of COD and these gas based power generating companies would meet their financial obligations as they arise and hence the going concern assumption of the aforesaid entities and carrying value of the investments (including advances) made by the Company directly or indirectly through its subsidiaries (''investments''), in GEL, GVPGL and GREL as at March 31, 2014 is appropriate and the financial statements of the Company do not include any adjustments that might result from the outcome of this uncertainty. In the meantime, the Company has also committed to provide necessary financial support to GEL, GVPGL and GREL as may be required by these Companies for continuance of their normal business operations.

NOTE 10

During the year ended March 31, 2014, with a view to restructure its shareholdings in airport business, the Company has transferred 244,999,900 equity shares of Rs. 10 each held in DIAL to GAL, a 97.15% subsidiary of the Company, at cost.

NOTE 11

"During the year ended March 31, 2013 with a view to restructure the equity holdings in road business, the Company had transferred 55,752,000 equity shares, 47,601,300 equity shares and 80,295,000 equity shares held in GPEPL, GJEPL and GUEPL respectively to GMRHL at cost. GMRHL is a 100.00% subsidiary of the Company. Further the Company has transferred 4,798,600 8% non-cumulative redeemable preference shares and 3,201,400 8% non-cumulative redeemable preference shares held in GUEPL to GTTEPL and GTAEPL at cost.

During the year ended March 31, 2014, the Company has transferred 2,002,000 8% non-cumulative, redeemable preference shares of Rs. 100 each held in GMR Ulundurpet Expressways Private Limited (''GUEPL'') to a wholly owned subsidiary of the Company, GMRHL at cost."

NOTE 12

A search under Section 132 of the Income Tax Act, 1961 was carried out at the premises of the Company by the Income Tax Authorities on October 11, 2012, followed by search closure visits on various dates thereafter, to check the compliance with the provisions of the Income Tax Act, 1961. The Income Tax Department has subsequently sought certain information / clarifications. The Company has not received any show cause notice / demand from the Income Tax Authorities. The management of the Company believes that it has complied with all the applicable provisions of the Income Tax Act, 1961 with respect to its operations.

NOTE 13

As per the transfer pricing rules prescribed under the IT Act, the Company is examining domestic and international transactions and documentation in respect thereof to ensure compliance with the said rules. The management does not anticipate any material adjustments with regard to the transaction involved.

NOTE 14

Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

NOTE 15

Previous year''s figures have been regrouped and reclassified, wherever necessary, to conform to the current year''s classification.


Mar 31, 2013

1. CORPORATE INFORMATION

GMR Infrastructure Limited (''GIL'' or ''the Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (''the Act''). Its stocks are listed on two stock exchanges in India. The Company carries its business in the following verticals:

a) Engineering Procurement Construction (EPC)

The Company is engaged in handling EPC solutions in the infrastructure sector.

b) Others

The Company''s business also comprises of investment activity and corporate support to various infrastructure Special Purpose Vehicles (SPV).

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Act. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

NOTE 3 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit.

NOTE 4 LEASES

Office premises and equipments taken by the Company are obtained on operating lease. The lease rental and equipment hire charges paid during the year is Rs. 35.04 Crore (March 31, 2012: Rs. 32.25 Crore). Office premises are obtained for a lease term of eleven months and renewable as mutually agreed between the parties. The equipments are taken on hire on need basis. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

NOTE 5

The Company has an investment of Rs. 341.56 Crore (March 31, 2012: Rs. 307.86 Crore) [including loans of Rs. 104.97 Crore (March 31, 2012: Rs. 91.27 Crore), share application money pending allotment of Rs. 20.00 Crore (March 31, 2012: Rs. Nil) and investment in equity/preference shares of Rs. 216.59 Crore (March 31, 2012: Rs. 216.59 Crore) made by the Company and its subsidiaries] in GACEPL as at March 31, 2013. GACEPL has been incurring losses since the commencement of commercial operations. The management believes that these losses are primarily attributable to loss of revenue arising as a result of diversion of partial traffic on parallel roads. The matter is currently under arbitration however, based on management''s internal assessment and a legal opinion, the management of GACEPL is confident that it will be able to claim compensation from relevant authorities for the loss it has suffered due to such diversion of traffic and accordingly, the investment in GACEPL has been carried at cost.

NOTE 6 INFORMATION ON JOINT VENTURE AS PER ACCOUNTING STANDARD-27

The Company directly holds 27.55% (March 31, 2012: 35%) of the equity shares of ISG and 12.45% (March 31, 2012: 5%) of the equity shares of ISG through its subsidiary company. ISG is incorporated in Turkey and is involved in development and operation of airport infrastructure.

The Company''s ownership and voting power of ISG along with its share in the assets, liabilities, income, expense, contingent liabilities and commitment is as follows:

NOTE 7 SEGMENT INFORMATION

The segment report of the Company has been prepared in accordance with Accounting Standard-17 on (''Segment Reporting'') notified pursuant to the Companies (Accounting Standard) Rules, 2006 as amended. The primary segment reporting format is determined to be business segment as the Company''s risk and rates of return are affected predominantly by difference in the services provided. Secondary information is reported geographically.

NOTE 8 CONTINGENT LIABILITIES

a) Guarantees issued on behalf of subsidiaries and other Companies is Rs. 21,254.64 Crore (March 31, 2012: Rs. 20,797.24 Crore). The liability outstanding as at March 31, 2013 is Rs. 16,357.66 Crore (March 31, 2012: Rs. 12,561.17 Crore).

b) Matters relating to indirect taxes under dispute Rs. 29.09 Crores (March 31, 2012 : Nil)

c) GEL has issued following fully paid-up Compulsorily Convertible Cumulative Preference Shares (''CCCPS''):

The preference shares are convertible upon the occurrence of qualifying initial public offering (QIPO) of GEL at an agreed internal rate of return (IRR). In case of non-occurrence of QIPO within 3 years of the closing date, as defined in the terms of agreement between the parties, investors have the right to require the Company to purchase the CCCPS or if converted, the equity shares in GEL at an agreed upon IRR.

d) During the year ended March 31, 2011, GAL has issued 2,298,940 non-cumulative compulsory convertible non-participatory preference shares (CCPSI) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid-up amounting to Rs. 229.89 Crore at a premium of Rs. 2,885.27 each totalling to Rs. 663.31 Crore to Macquaire SBI Infrastructure Investments 1 Limited, ("Investor I") for funding and consolidation of airport related investments by the Group. Further, during the previous year, GAL issued 1,432,528 non-cumulative compulsory convertible non-participatory preference shares (CCPS 2) bearing 0.0001% dividend on the face value of Rs. 1,000 each fully paid up amounting to Rs. 143.25 Crore at a premium of Rs. 3,080.90 each totaling to Rs. 441.35 Crore to Standard Chartered Private Equity (Mauritius) III Limited, JM Financial - Old Lane India Corporate Opportunities Fund I Limited, JM Financial Trustee Company Private Limited, JM Financial Products Limited and Build India Capital Advisors LLP ("Investors II"). The Company and GAL have provided Investor I and Investors II various conversion and exit options at an agreed internal rate of return as per the terms of the Restructuring Options Agreements and Investment agreements executed between the Company, GAL, Investor I and Investors II.

NOTE 9

Based on information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006" as at March 31, 2013.

NOTE 10

The investment by GEL in equity shares/ preference shares of the following subsidiary Companies has been funded by the Company against an agreement to pass on any benefits or losses out of investments by GEL to the Company and has been approved by the Board of Directors of both the Companies. During the current year, GEL has disposed off certain of its investments in GJEL, GPEPL and GUEPL at par to GMRHL.

NOTE 11

The Company through its subsidiary GIML has made an investment of Rs. 126.58 Crore (USD 2.31 Crore) towards 77% holding in GMIAL and GIML has pledged deposits of Rs 789.12 Crore (USD 14.40 Crore) towards loan taken by GMIAL from its lenders Further the Company has given a guarantee of Rs. 2,301.60 Crore (USD 42.00 Crore) to the lenders in connection with the borrowings made by GMIAL.

GMIAL 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. It was also stated that MACL would take over the possession and control of MIA within 7 days of the said letter. Though GMIAL denied that the contract was void ab initio, MACL took over the possession and control of the MIA and GMIAL vacated the airport effective December 8, 2012. This has resulted in the GMIAL principal activity becoming impossible from the date of takeover. The matter is currently under arbitration and the procedural meeting was held on April 10, 2013. GMIAL is in the process of seeking remedies under the aforesaid concession agreement and does not anticipate counter claims if any. The outcome of the arbitration is uncertain as at March 31, 2013. In view of the aforesaid matter, GMIAL continues to reflect assets including the claim recoverable of Rs. 919.16 Crore (USD 16.77 Crore) at their carrying values as at March 31, 2013, net of assets written off of Rs. 202.61 Crore. GMIAL''s ability to continue its future business operations and consequential impact on investments made/ guarantees given by the Company and GIML is solely dependent on the outcome of arbitration and/or a negotiated settlement.

Further, GMIAL has executed work construction contracts with GADLIL, a subsidiary of the Company and other service providers for rehabilitation, expansion, and modernisation of MIA. Pursuant to the aforesaid takeover of the airport by MACL, GMIAL has terminated the contracts with GADLIL and these service providers. As per the terms of contracts, in the event of discontinuation of construction, GMIAL is required to pay termination payment to the service providers. GMIAL has received claims from GADL and other service providers towards termination payments. However, no such claims relating to the termination of contracts have been recognised in the financial statements of GMIAL as at March 31, 2013 since the amounts payable are not certain. The takeover of MIA by MACL, indicate the existence of a material uncertainty about the going concern of GMIAL and GADLIL.

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 and accordingly these financial statements of the Company do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 12

The Company''s subsidiaries GEL and GVPGL are engaged in the business of generation and sale of electrical energy from their two gas based power plants of 220MW and 387.63MW situated at Kakinada and Vemagiri respectively. Further, GREL, a subsidiary, is constructing a gas based power plant. In view of lower supplies/availability of natural gas to the power generating companies in India, these subsidiaries are facing shortage of natural gas supply and delays in securing gas linkages. During the year ended March 31, 2013, GEL and GVPGL have incurred losses resulting in erosion of networth of these gas based power generating companies and GREL has not commenced commercial operations pending linkages of natural gas supply. Further, GREL for its 768 MW gas based power plant, which is under construction at Rajahmundry, has applied for allocation of gas and Ministry of Petroleum and Natural Gas (MoPNG) is yet to allocate the gas linkage. The consortium of lenders have approved the reschedulement of Commercial Operation Date (''COD'') of the plant under construction to April 1, 2014 and repayment of project loans. GEL along with its subsidiaries is actively pursuing/ making representations with various government authorities to secure the natural gas linkage/supply as the natural gas supplies from KG D6 basin have dropped significantly from September 2011 onwards. The Group and the Association of Power Producers are closely monitoring the macro situation and are evaluating various approaches/alternatives to deal with the situation and the management is confident that the Government of India would take necessary steps/initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. Based on business plan and valuation assessment, the management is confident that GEL and GVPGL will be able to generate sufficient profits in future years, GREL will achieve the COD as stated aforesaid and these gas based power generating companies would meet their financial obligations as they arise and hence the carrying value of investments (including advances) made by the Company directly or through its subsidiaries (''investments'') in above entities as at March 31, 2013 is appropriate.

NOTE 13

During the year ended March 31, 2012, with a view to restructure the holdings in Indian and International airport business, the Company had transferred 612,500,000 equity shares and 238,139,998 equity shares of DIAL and GHIAL respectively held by it to GAL at cost. GAL is a 97.15% subsidiary of the Company.

NOTE 14

During the year ended March 31, 2011, pursuant to restructuring, to facilitate expansion of the energy business both in India as well as globally, the Company had transferred its entire shareholding in GEL to GREEL, a subsidiary of the Company, at cost.

NOTE 15

During the year ended March 31, 2013 with a view to restructure the equity holdings in road business, the Company had transferred 55,752,000 equity shares, 47,601,300 equity shares and 80,295,000 equity shares held in GPEPL, GJEL and GUEPL respectively to GMRHL at cost. GMRHL is a 100.00% subsidiary of the Company.

Further the Company has transferred 4,798,600 8% non-cumulative redeemable preference shares and 3,201,400 8% non-cumulative redeemable preference shares held in GUEPL to GTTEPL and GTAEPL at cost.

NOTE 16

A search under Section 132 of the IT Act was carried out at the premises of the Company by the Income Tax Authorities on October 11, 2012, followed by search closure visits on various dates thereafter, to check the compliance with the provisions of the IT Act. The Income Tax Department has subsequently sought certain information/clarifications. The Company has not received any show cause notice/demand from the Income Tax Authorities. The management of the Company believes that it has complied with all the applicable provisions of the IT Act with respect to its operations.

NOTE 17

As per the transfer pricing rules prescribed under the IT Act, the Company is examining domestic and international transactions and documentation in respect thereof to ensure compliance with the said rules. The management does not anticipate any material adjustments with regard to the transaction involved.

NOTE 18

Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

NOTE 19

Previous year''s figures have been regrouped and reclassified, wherever necessary, to conform to the current year''s classification.

 
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