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Directors Report of GVK Power & Infrastructure Ltd.

Mar 31, 2015

Dear Stakeholders,

The Directors submit the 21st Annual Report of the Company along with the audited financial statements for the financial year ended March 31,2015.

Consolidated Financial results

Being a Holding Company of different vertical business operations, your Company doesn't have independent operating revenues other than O&M fee, incentives and dividends, if any, from its subsidiaries, Interest and other treasury income earned on surplus funds. Following is the summary of consolidated financial results of the Company, its subsidiaries and associates.

(Rs. Lakhs) Particulars 2014-15 2013-14

Financial Performance

Operational Income 304,965 282,093

EBIDTA 81,772 100,595

Other Income 8,665 12,066

Interest & Financial Charges 147,362 96,452

Depreciation 70,555 43,771

Provision for taxes (10,922) 14,460

Profit before tax and share of profits for associate and minority interest (116,848) (42,022)

Add: Share of income from Associates 3,220 2,764

Less: Minority Interest (30,160) (2,390)

Total Profit for the year (83,468) (36,868)

EPS (Rupees)

Weighted Average no. of Equity Shares 1,579,210,400 1,579,210,400

Basic and Diluted (5.29) (2.33)

Financial Position

Fixed Assets (Net of Depreciation) 2,398,888 2,236,641

Cash and Bank balance 149,551 181,347

Net Current Assets (512,978) (208,279)

Total Assets 3,285,303 3,202,375

Equity 15,792 15,792

Reserves 178,076 262,026

Net worth 193,868 277,818

Our total income from operations increased by 8.11% to Rs.304,965 Lakhs from Rs.282,093 Lakhs in the previous year. The Power segment contributed an income of Rs. 29,040 Lakhs compared to Rs.36,698 Lakhs (9.52% of total income) in the previous year. The Transportation segment contributed an income of Rs.29,983 Lakhs ( 9.83% of total income) compared to Rs.27,195Lakhs in the previous year. Airport Segment contributed an income of Rs.245,942 Lakhs (80.65% of total income). The associate company (Bangalore Airports) has contributed to net profit of Rs. 3,220 Lakhs compared to Rs. 2,764 Lakhs in the previous year. The net loss after tax, share of profit from associate and minority interest was Rs.83,468 Lakhs as against net loss of Rs.36,868Lakhs in the previous year. The net loss is mainly attributable to drop or no generation of power due to acute supply of gas which has resulted in either closure of power plants or operational for a very few days in a month and also increase in interest cost on acquisition debt.

Dividend

The Board of Directors of your Company has not recommended any dividend for the financial year 2014-15.

Management Discussion and Analysis

A Management Discussion and Analysis 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.

Corporate Governance

Corporate Governance, as required under amended Clause 49 of the Listing Agreement with the Stock Exchanges, a certificate from the Company Secretary in While Time Practice on compliance with the mandatory recommendations of the Narayana Murthy Committee on Corporate Governance is annexed to the Directors Report. As in the past, your Company continues to follow best of Corporate Governance policies.

Subsidiaries and Consolidated Financial Statements

As on March 31,2015 your Company has 7 direct Subsidiaries, 16 step down Subsidiaries and 2 Associate Companies. There has been no material change in the nature of the business of the Company and its subsidiaries. Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management Discussion and Analysis Report.

A statement containing salient features of the financial statement of these companies as required to be provided under section 129(3) of the Act, are enclosed herewith in the specified form, as Annexure A. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company Secretary. These documents are available for inspection during business hours at the registered office of the Company and that of the respective subsidiary companies. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: http:// www.gvk. comunderinvestorrelations/investors/policyfordeterminingmaterialsu -bsidiaries

Developments in the existing assets

(i) Energy

Since March, 2013 there has been no supply of natural gas to Jegurupadu Phase II and Gautami Power plants of your Company. Hence, both the plants are kept under long term preservation mode. However, with a restricted supply of gas, Jegurupadu Phase I operated at a part load (50%). As the plants are either not operating or partly operational and the situation of non- availability of gas is expected to continue for the foreseeable future, the Major Maintenance of gas turbines is also deferred.

However, Jegurupadu Phase II and Gautami Power Plants have been declaring availability of the plants on alternate fuel since November, 2013 and June, 2012 respectively to the extent of non-availability of gas and submitting the monthly tariff bills for the respective tariff months claiming Capacity Charges.

The validity period of PPA for Jegurupadu Phase I power plant will expire on 20th June, 2015. As per the terms of PPA, the DISCOMs can extend the PPA for another 15 years or lower period if accepted by both the parties OR Buy-out the Project at the Buy-out price decided by an Independent Appraiser. In case DISCOMs opt 'not to do' any of the above, the Project remains with GVK as its own property.

(ii) Airports

During the year under review, Mumbai International Airport Private Limited (MIAL) has handled total of 269,456 aircraft movements compared to 260,666 during the previous year, an increase of 3.37%. On an average 738 flights were operated per day during the current year as against 714 flights per day during the previous year. MIAL handled 36.63 million passengers during the year compared to 32.22 million passengers during the previous year, an increase of 13.70%. On an average 100,369 passengers traveled per day through the airport during the year as against 88,278 passengers during the previous year.

Bangalore International Airport Limited (BIAL) surpassed 15 million annual passengers on 22nd March 2015 and has positioned itself as the 3rd busiest Airport in the Country after Delhi and Mumbai and also moved into the ACI mid - sized (15 - 25 million) airport category globally. BIAL became the first airport in the Country to be IATA e-freight compliant by successfully completing a proof-of-concept and operationalization of e-freight facility.

(iii) Transportation

Partial Commercial Operations for the 83.04 km Deoli-Kota Road Project, in the State of Rajasthan, is likely to commence from the first/second quarter FY 2015-16.

Directors / Key Managerial Personnel (KMP)

Appointments by rotation

In accordance with the provisions of the Companies Act, 2013 read with the Articles of Association of the Company G V Sanjay Reddy, Director of the Company will retire by rotation at this meeting and being eligible, your Board recommends his re- appointment.

Confirmation of Appointment

Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with the Article 109 of the Articles of Association of the Company, K Balarama Reddi and Santha K John were appointed as Additional Directors (Independent) w.e.f. 14th November, 2014 and 31st March, 2015 respectively and they shall hold office only up to the date of this Annual General Meeting. Being eligible, the Board recommends their appointment as Independent Directors of the Company in terms of section 149(10) of the Companies Act, 2013 for a fixed term of 5 years.

Based on the recommendations of the Nomination & Remuneration Committee of the Company your Board of Directors had approved the terms of appointments of Ch G Krishna Murthy, S. Balasubramanian and K Balarama Reddi, the existing Independent Directors, under the Companies Act, 2013 for a fixed period of 5 years from 13th February, 2015 to 12th February, 2020 and they shall not retire by rotation. Being eligible, the Board recommends their appointment as Independent Directors of the Company in terms of section 149(10) of the Companies Act, 2013 for a fixed term of 5 years.

Details of these directors seeking appointment / re-appointment at this meeting have been given separately under the corporate governance section of this report.

Each of these Independent Directors have given a declaration to the Company that they meet the criteria of independence as required under section 149(7) of the Companies Act, 2013 and clause 49 of the Listing Agreement with the Stock Exchanges.

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors have formulated and adopted a policy on appointment / remuneration of directors including criteria for determining qualifications, positive attributes, independence of the Directors and other matters. This policy also covers the performance evaluation of all directors, Board, Committees and Key Managerial Personnel.

An exclusive meeting of the Independent Directors of the Company has been held on 13th February, 2015 which was attended by all the Independent Directors. They have reviewed the performance of the non-independent directors and the Board as a whole, performance of chairperson and quality of information to the Board as provided under Schedule IV of the Companies Act, 2013.

The Company has adopted a program on familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of business and the industry in which the Company operates among other things. The same is put up on the website of the company at the link http:// www.gvk.comunderinvestorrelations/investors/familiarisationprogrammeof independentdirectors.

Dr. GVK Reddy, Chairman & Managing Director, Mr A Issac George, Director & CFO and Mr. P V Rama Seshu, General Manager & Company Secretary are the Key Managerial Personnel of the Company in terms of Section 203 of the Companies Act, 2013 and the Rules made the thereunder. The performance of each of these KMP are evaluated annually by the Nomination and Remuneration Committee (NRC) and the Independent Directors and report their analysis to the Board.

Mechanism for Evaluation of Board

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration committee and Independent Directors with specific focus on the performance and effective functioning of the Board and individual Directors.

1. Criteria for evaluation of Board of Directors as a whole

i) The frequency of meetings;

ii) The length of meetings;

iii) The administration of meeting;

iv) The number of committees and their notes;

v) The flow of information to board members and between board members

vi) The quality and quantity of information; and

vii) The disclosure of information to the stakeholders

2. Criteria for evaluation of the Individual Directors

i) Ability to contribute and monitor corporate governance practices;

ii) Ability to contribute by introducing best practices to address top management issues;

iii) Participation in long term strategic planning;

iv) Commitment to the fulfilment of director obligations and fiduciary responsibilities;

v) Guiding strategy;

vi) Monitoring management performance and development;

vii) Statutory compliance & Corporate governance;

viii) Attendance and contribution at Board/Committee meetings;

ix) Time spent by each of the member; and

x) Core competencies

Nomination and remuneration policy

The objectives of the Policy

1) To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2) To determine remuneration based on the Company's size and financial position and trends and practices on remuneration prevailing in peer Companies.

3) To carry our evaluation of the performance of Directors,

4) To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company's operations.

5) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

The brief Nomination and Remuneration policy is annexed to this report.

Directors' Responsibilities Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to the Directors' Responsibilities Statement, it is hereby confirmed that;

i) in the preparation of the annual accounts for the financial year ended March 31,2015, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) the directors had 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 March 31,2015 and of the profit or loss of the Company for the said period;

iii) that the directors had taken proper and sufficient care 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;

iv) the directors had prepared the annual accounts for the financial year ended March 31,2015 on a "going concern" basis;

v) they have laid down internal financial controls in the company that are adequate and were operating effectively and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

Financial Statements

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 133 of the Companies Act, 1956 read with Rule 7 of The Companies (Accounts) Rules, 2014. These financial statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associate companies.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on our website www.gvk.com. These documents will be available for inspection during business hours at our registered office in Secunderabad, India.

Secretarial Auditor

The Board had appointed M/s Narendar & Associates, Company Secretaries in Whole-time Practice to carry out the Secretarial Audit under the provisions of section 204 of the Companies Act, 2013 and the Rules made thereunder. The report of the Secretarial Auditor is enclosed to this report as Annexure B. This report contains an emphasis of matter on filling the intermittent vacancy caused by the resignation of a woman director. This delay is not intentional but purely because of the time taken for identifying a suitable person.

Auditors

In terms of the sub-section (2) of section 139 of the Companies Act, 2013 (effective from 01-04-2014) no Listed Company shall appoint or re-appoint an Auditing Firm as the Auditor for more than two terms of five consecutive years. Provided that the firm is eligible to be appointed or re-appointed in the same Company after five years from the completion of existing term. In pursuance of the above, every listed Company shall comply with this requirement within a transitional period of three years from the date of commencement of the Act i.e. 1st April, 2014.

M/s. S R Batliboi & Associates LLP, the existing Auditors, have been appointed on 13th September, 2002, as the Statutory Auditors of the Company for auditing the annual financial statements of the Company from the financial year 2002-03 and have completed the permissible period of two terms of five years each as on date. The Company would like to comply with this new provision within said transitional period of three years. In the meantime, the Company proposed to re-appoint M/s. S R Batliboi & Associates LLP as Statutory Auditors for the financial year 2015-16 as well.

M/s. S R Batliboi & Associates LLP, the Statutory Auditors of the Company will retire at the conclusion of this Annual General Meeting and being eligible, they have offered themselves for re-appointment as Statutory Auditors and have confirmed that their re-appointment, if made, would be within the limits prescribed under section 141 of the Companies Act, 2013. Accordingly, the Board recommends their reappointment at this AGM. The Notes to Accounts forming part of the financial statements are self- explanatory and need no further explanation.

Management's response on the Statutory Auditors Qualification / Comments

a) Qualification on termination notice served by GVK Oil & Gas Ltd

GVK Power & Infrastructure Limited (GVKPIL) had incorporated a subsidiary GVK Oil & Gas Limited (GVK) for carrying out the business activity of exploration & production of Oil & Gas. GVK along with M/s BHP Billiton (BHP) had bid for 7 of the 57 blocks offered by the Ministry of Petroleum and Natural Gas (Ministry) under New Exploration and Licensing Policy, Seventh offer of Blocks ("NELP VII"). The consortium of GVK & BHP was awarded the license for exploration, development and production of oil / gas in 7 blocks. Six of the blocks are of the western coast and one block is of the Kerala-Konkan coast. The consortium of GVK & BHP had entered into a Production Sharing Contract (PSC) with Ministry on December 22, 2008 for all the seven blocks allotted.

The participating interest held by GVK and BHP in each of the blocks are 74% and 26% respectively. BHP was appointed as the Operator for the Blocks pursuant to the Joint Operating Agreements ("JOAs") entered between BHP and GVK for each Block, each dated December 22, 2008.

Under the PSC, the contractor has the obligation to complete the minimum work program and the mandatory work program for each of the blocks within the time stipulated therein. The minimum work program in all blocks (except MB 3) was completed as committed under the PSC's. Only, 3D seismic data acquisition, processing and interpretation ("API") in an area covering 300 Sq. KM in MB 3 (as part of committed work program) couldn't be completed, because of the defence (Naval) restrictions and later conditional release imposed. Subsequently, the clearance was given by introducing additional conditions by the Ministry, which was neither contemplated 22 by the Contractor at the time of entering into the PSC nor was the Contractor informed of the existence/ requirement of such conditions by the Government of India at that time. This has not only rendered the performance obligations of the Contractor under the PSC impossible but has also destroyed the foundation and the objectives of the PSC. Hence, during the previous year, Termination Notice was served by GVK on the Ministry for termination of PSC. The Management based on legal advice believes that the Ministry will reimburse the costs incurred by it and accordingly no adjustment is required for carrying value of investments and advances aggregating to Rs. 10,161 Lakhs.

b) Qualification on recoverability against carrying value of assets of GVK Coal (Tokisud) Private Limited

GVK Coal (Tokisud) Private Limited was incorporated for developing a coal mine with minable reserve of 52 Million Tons (geological reserve of around 92 Million Tons) in the state of Jharkhand as a captive coal mine to meet the requirements of coal of one of the step down subsidiary i.e. GVK Power (Goindwal Sahib) Limited, which is implementing a 540 MW Power Plant at Goindwal Sahib in Punjab.

The Hon'ble Supreme Court vide its decision dated September 24, 2014 held that allotment of various coal blocks including those allotted to GVK Coal (Tokisud) Company Private Limited is arbitrary and illegal and had cancelled the allotment. Subsequently, the government promulgated The Coal Mines (Special Provisions) Ordinance 2014, which intends to take appropriate action to deal with situation arising pursuant to the Honorable Supreme Court's judgment. GVK Coal Tokisud, subsidiary company has filed writ petition before the Hon'ble High Court of Delhi challenging the decision of the Nominated Authority, Ministry of Coal which quantified the compensation payable to GVK for taking over the Tokisud Coal Block as Rs. 11,129 Lakhs against the carrying value of assets of Rs. 35,575 Lakhs. The Management believes that the subsidiary will be appropriately reimbursed for cancelled coal mine accordingly no provision was required to be made to carrying value of assets.

Particulars of Loans given, Investments made and Guarantees given and Securities provided:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements. Please refer to Note 5,7,10 and 25 to the standalone financial statement.

Board Committees

All Committees of the Board of Directors are constituted and rechristened, wherever needed, in line with the provisions of the Companies Act, 2013 and Clause 49 of the amended Listing Agreement with the Stock Exchanges.

Awards and recognitions

Following are some of the awards and recognitions that your Company/its Subsidiaries/Associates received during the current year. Certifications, Recognitions and Awards for Bengaluru International Airport (BIAL)

BIAL surpassed 15 million annual passengers on 22nd March 2015 and has positioned itself as the 3rd busiest Airport in the Country after Delhi and Mumbai and also moved into the ACI mid - sized (15 - 25 million) airport category globally.

Achieved an overall satisfaction score of 4.37 in the ACI Airport Service Quality passenger survey (ASQ) for calendar year 2014. First airport in the Country to be IATA e-freight compliant, successfully completing a proof-of-concept and operationalization of e-freight facility.

New dedicated facility to support the Governments Tourist Visa on Arrival enabled with Electronic Travel Authorization (ETA) initiative, is ready for operations.

SKYTRAX 2015 - Kempegowda International Airport, Bengaluru has been awarded the 'Best Regional Airport in Central Asia' by Skytrax World Airport Awards 2015 held in Paris.

Awarded the ASQ 'Best Improvement Award 2014' at the recently concluded ASQ Airport Forum for Asia, Middle East and Africa held at Sanya, China.

India Travel Awards South for "Best Airport Marketing Award 2013" and "Best Airport Award".

'Best Airport Award 2014', Aviation Awards 2014 by SAP Media.

Best Maintained Landscape / Garden - The Bangalore City Landscape Garden competition by The Mysore Horticultural Society. World HRD Congress award for Dream Company to work for in the Airlines and Aviation sector.

BIAL has successfully renewed its Airport Carbon Accreditation for Level 3 i.e. Optimization Level in the month of May 2014.

BIAL has completed surveillance audit successfully for ISO 9001:2008 (QMS), ISO 14001:2004(EMS), ISO 50001:2011(EnMS),

OHSAS 18001:2007(Health & Safety), ISO 27001 certification along with upgradation from ISO 27001:2005 revision to the latest ISO 27001:2013 revision and ISO 22301:2012.

Accreditation of Training Institute of BIAL - Aviation Security Training Institute of BIAL has been approved by BCAS for conducting Aviation Security Courses / Training for the airport community.

Certifications, Recognitions and Awards for Mumbai International Airport Private Limited (MIAL)

GVK CSIA has been conferred the award for 'Outstanding Contribution in Airports - Infrastructure' category at the 5th EPC World Awards 2014

GVK CSIA has been bestowed with the runner-up award in the Airport category for being the favourite among readers by Conde Nast Traveller India

GVK MIAL received the Best Airport from "ACAAI & KALE Logistics" for the third consecutive year in 41st ACAAI Convention. The award acknowledges our excellence in connecting the cargo community.

Structural Steel Excellence Awards 2014 Trophy Award for "The Innovative, Efficient and productive use of Steel Structures in the Built Environment" in the category of Infrastructure or Transportation Structures (Overseas) from Singapore Structural Steel Society GVKPIL received the Dun and Bradstreet's Infra Awards 2014 for its exemplary performance for CSIA T2 project.

GVK MIAL has been awarded the prestigious 'Golden Peacock Award for Sustainability'.

GVK MIAL has been awarded THE SWORD OF HONOR by the British Safety Council for excellence in health and safety management. GVK MIAL receives the 'Outstanding Concrete Structure Award of ICI, 2014'

GVK MIAL is proud to be the first airport to receive a TAPA Freight Security Requirements (FSR) 2011 Certification Classification (A). GVK MIAL is proud to be the 1st Airport in Asia and 5th in the world to release "The Sustainability Report 2014" as per GRI G4 reporting guidelines.

GVK CSIA received the Best Managed Airport award at the 8th CNBC Awaaz Travel Award 2014

GVK CSIA has bagged the prestigious 'Golden Peacock Innovative Product/Service Award 2014' for its newly launched 'Pranaam GVK Guest Services'

GVK CSIA received the Forbes India Art Awards under the Corporate Commitment to Art category 2014

GVK CSIA received the Cargo Recognition Award from Swiss World Cargo for its Swiss Air Mumbai Airport station.

GVK CSIA received Gold rating in Leadership in Energy and Environmental Design (LEED) India from the Indian Green Building Council (IGBC) for energy efficient, eco-friendly and sustainable terminal building design Contracts and Arrangements with the Related Parties:

All the related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. These transactions, for a financial year, are placed before the Audit Committee and the Board for their prior approvals. 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 a materiality of related party transactions. Transactions entered by the Company with the related parties on arm's length basis and in the normal course of business, for the financial year 2014-15, with the prior approval of the Audit Committee and the Board are enclosed as Annexure C. A policy on related party transactions can be accessed at the link http://www.gvk.com/files/investorrelations/investors/corpgovernance/ RelatedPartyTransactionPolicy.pdf

Extract of Annual Report

An extract of the Annual Return for the financial year ended 31st March, 2015 as required under section 92(3) of the Act is enclosed herewith, in the specified format, as Annexure D Internal Control Systems and their adequacy

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Company's business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee periodically reviews internal audit reports and effectiveness of internal control systems.

Apart from the above, the Company is in consultations with the external and independent consultants to have a policy for development and implementation of risk management for the company including identification of elements of risk, if any, that may threaten the existence of the Company and a mechanism to mitigate the same. Once the above policy is finalized, the same will be adopted by the Board and uploaded in the website of the Company thereafter.

Public Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public.

Vigil Mechanism

In terms of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established by the Board along with the whistle blower policy. The Vigil Mechanism and whistle blower policy have been uploaded on the website of the Company. The same can be accessed at the link www.gvk.comunderinvestorrelations/ investors/codeofconduct.

Corporate Social Responsibility

During the year, the Board had reconstituted the CSR Committee by appointing K Balarama Reddy, Independent Director as its member and made G V Sanjay Reddy as Chairman of this Committee in place of Dr. GVK Reddy who had resigned as its member. Majority members of this Committee are Independent Directors. Members can access the CSR Policy on the website of the Company at link http://www.gvk.comunderinvestorrelations/investors/corporategovernance/CSR Policy

Since, there are no average net profits for the Company during the previous three financial years, there are no specific funds that are required to be set aside and spent by the Company during the year under review.

Particulars of employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, none of the employees are in receipt of the remuneration which is in excess of the limits as specified in the regulation.

Disclosures pertaining to remuneration and other details as required under Section 197(12) read with Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are enclosed to this report.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operavtions in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgements

The Directors of your Company thank the Government of India, various State Governments and their concerned Department / Agencies / Regulatory Authorities for their continued support and cooperation. The Directors also wish to place on record the support extended by various Banks, Financial Institutions and every stakeholder of the Company.

The Directors further wish to appreciate and value the contributions made by every employee of the GVK.

For and on behalf of the Board of Directors Place : Hyderabad Dr. GVK Reddy Date : May 16, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Stakeholders,

The Directors submit the 20th Annual Report of the Company along with the audited financial statements for the financial year ended March 31st, 2014.

Consolidated Financial results

Being a Holding Company of different vertical business operations, your company doesn''t have independent operating revenues other than O&M fee, incentives and dividends, if any, from its subsidiaries, Interest and other treasury income earned on surplus funds. Following is the summary of consolidated financial results of the company, its subsidiaries and associates.

(Rs. Lakhs)

Particulars 2013-14 2012-13

Financial Performance

Operational Income 282,093 260,765

EBIDTA 100,596 68,325

Other Income 12,066 13,613

Interest & Financial Charges 96,452 74,609

Depreciation 43,771 35,118

Provision for taxes 14,460 12,870

Profit before tax and share of profits for associate and minority interest (42,021) (40,659)

Add: Share of income from Associates 2,764 5,092

Less: Minority Interest (2,390) (1,970)

Total Profit for the year (36,867) (33,597)

EPS (Rupees)

Weighted Average no. of Equity Shares 1,579,210,400 1,579,210,400

Basic and Diluted (2.23) (2.13)

Financial Position

Fixed Assets (Net of Depreciation) 2,236,641 2,104,619

Cash and Bank balance 186,567 208,016

Net Current Assets (207,973) (246,769)

Total Assets 3,203,046 2,788,652

Equity 15,792 15,792

Reserves 262,026 298,739

Net worth 277,818 314,531

Our total income from operations for the year increased to Rs. 2,82,093 Lakhs from Rs. 2,60,765 Lakhs of the previous year registering a growth of 8.18%. The Power segment contributed an income of Rs. 36,698 Lakhs, (9.56% of total income) compared to Rs. 89,545 Lakhs (13% of total income) in the previous year. The Transportation segment contributed an income of Rs. 27,195 Lakhs (9.64% of total income) compared to Rs. 24,933 Lakhs in the previous year. Airport Segment contributed an income of Rs. 218,200 Lakhs (77.35% of total income) compared to Rs. 146,212 Lakhs in the previous year. The other segment contributed Rs. Nil compared to Rs. 75 Lakhs in the previous year. The Airport assets (Bangalore Airport) have contributed to net profit of Rs. 2,764 Lakhs compared to Rs. 5,092 Lakhs in the previous year.

The net loss afer tax, share of profit from associate and minority interest was Rs. 34,148 Lakhs as against net loss of Rs. 33,597 Lakhs in the previous year. The net loss is mainly attributable to drop in generation of power due to no supply of natural gas to Jegurupadu Phase II and Gautami Power Plants and an increase in interest costs on the funds borrowed for acquiring airport assets. The Company is exploring various options, including raising funds from the market through permissible modes to reduce the interest costs and also to meet other general corporate purposes.

Dividend

The Board of Directors of your company has not recommended any dividend for the financial year 2013-14.

Management Discussion and Analysis

A 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.

Corporate Governance

Corporate Governance, as required under Clause 49 of the Listing Agreement with the Stock Exchanges, a certifcate from the Company Secretary in Whole-time-practice on compliance with the mandatory recommendations of the Narayana Murthy Committee on Corporate Governance is annexed to the Directors Report. As in the past, your company continues to follow best of Corporate Governance policies.

Subsidiaries and Consolidated Financial Statements

As on 31st March, 2014 your Company has 7 direct Subsidiaries, 16 step down Subsidiaries and 2 Associate Companies. A list of these companies is provided separately as Annexure "A" to this report. There has been no material change in the nature of the business of the subsidiaries. Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management Discussion and Analysis Report.

Pursuant to the provision of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Afairs (MCA), Government of India, New Delhi vide its Circular No. 2/2011 dated: 08-02-2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company. As required under the said Circular, the Board of directors of your Company at its meeting held on 6th February, 2014 gave its Specific consent for not attaching the balance sheets of its subsidiaries, as they would be made available to its members at the company''s website.

A statement containing the brief financials of the Company''s subsidiaries for the financial year ended 31st March, 2014 is provided as Annexure "B" to this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company Secretary. These documents are available for inspection during business hours at the registered ofce of the Company and that of the respective subsidiary companies.

Developments in the existing assets

(i) Energy

Since March 2013, there has been no supply of natural gas to Jegurupadu II and Gautami power projects of your company. Hence, both the plants are kept under long term preservation mode. However, with a restricted supply of gas, Jegurupadu Phase I plant operated at a part load (50% PLF). As the plants are either not operating or partly operational and the situation of non-availability of gas is expected to continue for the foreseeable future, the Major Maintenance of gas turbines is also deferred.

(ii) Airports

Mumbai International Airport Limited (MIAL):

During the year, MIAL has completed the construction of the state-of-the-art Terminal II (T2) at GVK Chhatrapati Shivaji International Airport (CSIA). The new T2 built in four years is an Iconic global mega structure and India''s frst and the most advanced vertical passenger terminal that integrates world class design, architecture, infrastructure and operational efciency with a rich infusion of Indian heritage and cultural character. The new T2 was inaugurated by the then Prime Minister of India Dr. Manmohan Singh on 10th January 2014 and commenced international operations from 12th February 2014. The Iconic 83.8 m ATC Tower was also commissioned from 1st February 2014.

The new T2 houses the world''s largest art programme ''Jaya He'' in the form of a 3 km multi storeyed art gallery. The airport also has a multi level car parking facility to park 5,200 cars, largest in the country.

Bangalore International Airport Limited (BIAL):

The expansion of existing Terminal 1A with a new elevated design, exteriors, facilities and infrastructure was successfully completed and inaugurated by Chief Minister of Karnataka, Mr. Siddaramaiah on 14th December 2013. The commercial operations of the new Terminal 1A commences from 8th February 2014. The airport is now set to handle 20 million passengers per year. The modernised airport not only reflects the city''s dream but also culture, ethos and landscape of the State of Karnataka. The new Terminal 1A epitomises the technological prowess of Bengaluru. Apart from the new VIP Terminal at the airport that befits the prominent personalities who visit the city, the airport is ready to accommodate large aircraft such as Airbus 380. Befitting the garden city, the airport has been designed with a 100 acres of landscape greeting the traveller to bring out the essence of city as tranquil and greenzone. The modernised Bangalore International Airport has been renamed as Kempegowda International Airport, Bengaluru.

(iii) Transportation

The 83.04 km Deoli-Kota Road Project is nearing completion and the commercial operations are likely to start during FY 14-15. This project has the longest tunnel (1.1 km) in state of Rajasthan.

Emerging Opportunities

During the year, GVK received the environmental approval from State and Federal governments for its Kevin''s Corner thermal coal project in the Galilee Basin in the Queensland, Australia.

During the year, Aurizon and GVK Coal Infrastructure (Singapore) Pte Ltd (GVK Hancock) have reached a significant milestone towards their proposed transaction for the joint development of a rail line and a new coal terminal at the existing Abbot Point Port to unlock the Galilee Basin''s coal resources, including GVK Hancock''s Alpha, Alpha West and Kevin''s Corner coal projects. In November of 2013, GVK Hancock and Aurizon reached alignment on a rail solution and on the commercial terms for the proposed transaction such as governance, timing of milestones, funding and conditions for completion. The parties have since progressed the proposed transaction significantly and expect to complete the transaction in the coming weeks, subject to meeting necessary approvals.

Mr. Darren Yeates, has been appointed as new Chief Executive Officer, who brings in over 30 years of experience in technical, operating and senior management roles within the mining industry. Prior to joining GVK, he spent 23 years with Rio Tinto where his most recent positions were Acting Managing Director and Chief Operating Officer at Rio Tinto Coal Australia.

Financial Statements

As required under the Listing Agreement entered into with the Stock Exchanges, the audited stand alone and consolidated financial statements of the Company along with its subsidiary Companies are attached herewith and form part of this annual report. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. These financial statements disclose the assets, liabilities, income, expenses and other details of the company, its subsidiaries and associate companies.

Management''s response on the Auditors qualification

GVK Power & Infrastructure Limited (GVKPIL) had incorporated a subsidiary GVK Oil & Gas Limited (GVK) for carrying out the business activity of exploration & production of Oil & Gas. GVK along with M/s BHP Billiton (BHP) had bid for 7 of the 57 blocks offered by the Ministry of Petroleum and Natural Gas (Ministry) under New Exploration and Licencing Policy, Seventh offer of Blocks ("NELP VII"). The consortium of GVK & BHP was awarded the license for exploration, development and production of oil / gas in 7 blocks. Six of the blocks are off the western coast and one block is off the Kerala-Konkan coast. The consortium of GVK & BHP had entered into a Production Sharing Contract (PSC) with Ministry on December 22, 2008 for all the seven blocks allotted. The participating interest held by GVK and BHP in each of the blocks are 74% and 26% respectively. BHP was appointed as the Operator for the Blocks pursuant to the Joint Operating Agreements ("JOAs") entered between BHP and GVK for each Block, each dated December 22, 2008.

Under the PSC, the contractor has the obligation to complete the minimum work program and the mandatory work program for each of the blocks within the time stipulated therein. The minimum work program in all blocks (except MB 3) was completed as committed under the PSC''s. Only, 3D seismic data acquisition, processing and interpretation ("API") in an area covering 300 Sq. KM in MB 3 (as part of committed work program) couldn''t be completed, because of the defence (Naval) restrictions and later conditional release imposed. Subsequently, the clearance was given by introducing additional conditions by the Ministry, which was neither contemplated by the Contractor at the time of entering into the PSC nor was the Contractor informed of the existence/requirement of such conditions by the Government of India at that time. This has not only rendered the performance obligations of the Contractor under the PSC impossible but has also destroyed the foundation and the objectives of the PSC. Hence, during the year, Termination Notice has been served by GVK on the Ministry for termination of PSC. The Management based on legal advice believes that the Ministry will reimburse the costs incurred by it and accordingly no adjustment is required for carrying value of investments and advances aggregating to Rs. 17,745 Lakhs and guarantee aggregating to Rs. 813 Lakhs issued by the Company for subsidiary.

Corporate Social Responsibility (CSR)

The Company''s CSR initiatives are being implemented through GVK Foundation, a CSR Firm of the GVK Group. This Foundation is involved predominantly in the areas of education, health and hygiene, community based programs, including art, music, sports and other socio economic and culture activities. These activities are being developed/encouraged diferent parts of the country.

As required under the Companies Act, 2013, the Board of Directors of your company at its meeting held on 29th May, 2014 has constituted a CSR Committee comprising of Dr. GVK Reddy, as Chairman and Mr. G V Sanjay Reddy and Mr. Ch G Krishna Murthy, as other Members. This Committee has been entrusted with the responsibility of formulating and recommend to the Board a CSR policy broadly indicating the activities to be undertaken by the company apart from the activities (already under implementing) that are mandatory in the implementation of the frame work of CSR policy and recommend the money to be spent on each of the activities as prescribed under Act and the Rules made thereunder.

From now onwards your company will endeavour to extend these CSR activities to the areas across the country, where the company''s operations are present, directly or through its subsidiaries / associates.

Directors Appointments by rotation

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the Company Mrs. G Indira Krishna Reddy, Director of the company will retire by rotation at this meeting and being eligible, your Board recommends her re- appointment.

confirmation of Appointment

Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with the Article 109 of the Articles of Association of the company, Mr. S Anwar is appointed as the Additional Director (Independent) w.e.f. 14th November, 2013 and he shall hold ofce only up to the date of this Annual General Meeting. Being eligible, the Board recommends his appointment as an Independent Director of the Company in terms of section 149(10) of the Companies Act, 2013 for a continuous period of 5 (five) years for a term up to 12th August, 2019.

Demise

Dr. A. Ramakrishna, Independent Director of the company was expired on 20th August, 2013. He was associated with the Company for a very long time. The board places on record it''s appreciation for the valuable services rendered by Dr. A. Ramakrishna and prayed for his soul to rest in peace.

Resignation

Due to personal reasons, Mr. K N Shenoy, an Independent Director, has expressed his inability to continue on the Board and submitted his resignation vide his letter dated 8th May, 2014. The Board at its meeting held on 29th May, 2014, accepted the same and placed on record its appreciation for the valuable services rendered by Mr. Shenoy, during his long association with the company.

Cessation

In terms of sub-section (10) of section 149 of the Companies Act, 2013 (efective from 01-04-2014), every listed company shall appoint Independent Directors, who shall hold ofce for a term up to 5 (five) consecutive years on the Board of a company and sub section (11) of section 149 states that no Independent Director shall be eligible to be appointed for more than 2 (two) consecutive terms of 5 (five) years.

Further, it may be noted that sub-section (5) of section 149 of the Companies Act, 2013, provides for a transitional period of one year (from 01-04-2014) for re-appointment of the Independent Directors, if eligible, for a consecutive period of 5 (five) years (if, it is intended so by the Board) subject to compliance with the eligibility and other prescribed conditions.

The Board at its meeting held on 29th May, 2014, has decided to re-constitute/ broad base the Board, if need be, within the above said transitional period, afer a detailed review of the latest regulations governing the appointment of the Independent Directors in the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.

All the Independent Directors of the company were appointed earlier as Directors whose period of office is liable to retire by rotation under the provisions of the erstwhile Companies Act, 1956. The Board of Directors of the company at its meeting held on 29th May, 2014 had taken a decision that all the existing Independent Directors, except Mr. S Anwar, (who is being confirmed at this AGM) and Mr. P Abraham and Mrs. Ranjana Kumar (who are retiring by rotation at this AGM) would serve their current term as Directors whose office is liable to retire by rotation based on their term of original appointment by shareholders.

Accordingly, Mr. P Abraham and Mrs. Ranjana Kumar, Independent Directors, are retiring by rotation at this AGM and the Board is not proposing their re-appointment at this AGM. The Board would like to thank both Mr. Abraham and Mrs. Ranjana Kumar for their guidance and support extended to the Company and placed on record its appreciation for their valuable services rendered during their tenure on the Board.

The remaining Independent Directors, who do not complete their term at this AGM, will continue to hold office till the expiry of their term, based on the retirement period calculation and thereafter would be re-appointed, if eligible, for a fixed term in accordance with the Companies Act, 2013 and the Regulations made thereunder.

Directors'' Responsibilities Statement

Pursuant to the requirements eligible under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibilities Statement, it is hereby confirmed that;

i) in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable Accounting

Standards have been followed along with proper explanations relating to material departures;

ii) the directors had 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 31st March, 2014 and of the profit or loss of the Company for the said period;

iii) that the directors had 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; and

iv) the directors had prepared the annual accounts for the financial year ended 31st March, 2014 on a "going concern" basis.

Auditors

In terms of the sub-section (2) of section 139 of the Companies Act, 2013 (effective from 01-04-2014) no Listed company shall appoint or re-appoint an Auditing Firm as the Auditor for more than two terms of five consecutive years. Provided that the firm is eligible to be appointed or re-appointed in the same company after five years from the completion of existing term. In pursuance of the above, every listed company shall comply with this requirement within a transitional period of three years from the date of commencement of the Act i.e. 1st April, 2014.

M/s. S R Batliboi & Associates LLP, the existing Auditors, have been appointed on 13th September, 2002, as the Statutory Auditors of the Company for auditing the annual financial statements of the company from the financial year 2002-03 and have completed the permissible period of two terms of five years each as on date. The company would like to comply with this new provision within said transitional period of three years. In the meantime, the company proposed to re-appoint M/s. S R Batliboi & Associates LLP as Statutory Auditors for the financial year 2014-15.

M/s. S R Batliboi & Associates LLP, the Statutory Auditors of the Company will retire at the conclusion of this Annual General Meeting and being eligible, they have offered themselves for re-appointment as Statutory Auditors and have confirmed that their re-appointment, if made, would be within the limits prescribed under section 141 of the Companies Act, 2013. Accordingly, the Board recommends their re-appointment at this AGM.

Board Committees

The Board of Directors at its meeting held on 29th May, 2014 has rechristened the existing Remuneration Committee as Nomination and Remuneration Committee and Investors Grievance Committee as Stakeholders Relationship Committee apart from constituting a Corporate Social Responsibility Committee so as to be in line with what is prescribed under the Companies Act, 2013 and Clause 49 of the amended Listing Agreement with the Stock Exchanges.

Key Managerial Personnel

Dr. GVK Reddy, Chairman & Managing Director, Mr A Issac George, Director & CFO and Mr. P V Rama Seshu, GM & Company Secretary of the Company were nominated as Key Managerial Personnel (KMP) of the Company under the provisions of section 203 of the Companies Act, 2013.

Awards and recognitions

Following are some of the awards and recognitions that your Company/its Subsidiaries/Associates received during the current year.

Mumbai International Airport Pvt Ltd (MIAL)

The CSIA has been rated as 5th best airport globally in 25 - 40 MPPA category in annual ACI airport service, quality, survey for 2013.

Forbes India award for ''Jaya He'' art programme at new T2.

Best cargo airport 2013 (runner up) by ACAAI for outstanding performance of cargo team in 2013. n Best airport (Excellence in connecting the cargo community) from ACAI and the KALE logistics for the second consecutive year.

Bengaluru International Airport Limited (BIAL)

Honoured with "Emerging Cargo Airport of the Year" award at the STAT TIMES International Award for Excellence in Air Cargo

"Best Airport Marketing Award" in India along with Hyderabad''s Rajiv Gandhi International Airport, at the India Aviation Conference and Exhibition 2014 held in Hyderabad.

First airport in Asia pacifc to be certified in Business Continuity Management under BS 2599 standard.

Promoters / Directors

Dr. GVK Reddy, Chairman & Managing Director of your company has been recognized as the "Infrastructure Person of the Year 2013" for his contribution to the infrastructure sector at the Construction Week India Awards held in Mumbai. He has been honoured with the Lifetime Achievement Award for his contribution to the aviation sector in the country at the Aviation India Conference & Exhibition 2014 conducted at Hyderabad.

Other Information

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on 28th May, 2014 and recommended the same for the approval of the Board of Directors.

Internal Control Systems and their adequacy

The Management continuously reviews the internal control systems and procedures for the efcient conduct of the Company''s business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee actively reviews internal audit reports and efectiveness of internal control systems.

Internal Control Systems are implemented to safeguard the Company''s assets from loss or damage, to keep constant check on the cost structure, to prevent revenue leakages, to provide adequate financial and accounting controls and implement accounting standards.

Public Deposits

During the year under review, your company has neither invited nor accepted any fixed deposits from the public.

Particulars of Employees

As required under 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 employee(s) are set out in the Annexure "C" to this report.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of 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, the information relating to foreign exchange earnings and outgo is provided under Notes to the Balance Sheet and profit and Loss Account.

Acknowledgements

The Directors of your Company thank the Government of India, various State Governments and their concerned Department / Agencies / Regulatory Authorities for their continued support and cooperation. The Directors also wish to place on record the support extended by various Banks, Financial Institutions and every stakeholder of the Company.

The Directors further wish to appreciate and value the contributions made by every employee of the GVK Family.

For and on behalf of the Board of Directors Place : Hyderabad Dr. GVK Reddy

Date : May 29, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Stakeholders,

The Directors submit the 19th Annual Report of the Company along with the audited financial statements for the financial year ended March 31, 2013.

Consolidated Financial results

Being a Holding Company of different vertical business operations, your company doesn''t have independent operating revenues other than O&M fee, incentives and dividends, if any, from its subsidiaries, Interest and other treasury income earned on surplus funds. Following is the summary of consolidated financial results of the company, its subsidiaries and associates.

(Rs.Lakhs)

Particulars 2012-13 2011-12

Financial Performance

Operational Income 260,765 249,183

EBIDTA 68,325 69,408

Other Income 13,613 8,887

Interest & Financial Charges 74,609 46,727

Depreciation 35,118 24,893

Provision for taxes 12,870 6,782

Profit before tax and share of profits for associate and minority interest (40,659) (107)

Add: Share of income from Associates 5,092 10,639

Less: Minority Interest (1,970) 4,386

Total Profit for the year (33,597) 6,146

EPS (Rupees)

Weighted Average no. of Equity Shares 1,579,210,400 1,579,210,400

Basic and Diluted (2.13) 0.39

Financial Position

Fixed Assets (Net of Depreciation) 2,103,888 1,670,814

Cash and Bank balance 208,016 172,626

Net Current Assets (230,509) (158,707)

Total Assets 2,788,652 2,287,448

Equity 15,792 15,792

Reserves 298,739 332,345

Net worth 314,351 348,137

Our total income from operations increased by 4.4 % to Rs. 260,765 lakhs from Rs. 249,183 lakhs in the previous year. The Power segment contributed an income of Rs. 89,545 lakhs compared to Rs.166,631 lakhs (34.34 % of total income) in the previous year. The Transportation segment contributed an income of Rs.24,933 lakhs (9.56 % of total income) compared to Rs.22,384 lakhs in the previous year. Airport Segment contributed an income of Rs.146,212 lakhs (56.07% of total income). The other segment contributed Rs.75 lakhs compared to Rs.616 lakhs in the previous year. The Airport assets (Bangalore Airport) have contributed to net profit of Rs.5,092 lakhs compared to Rs.10,639 lakhs in the previous year. The net loss is Rs.33,597 lakhs as against a net profit of Rs.6,164 lakhs in the previous year.

The net loss after tax share of profit from associate and minority interest was Rs.(33,597) lakhs as against a net profit of Rs.6,146 lakhs in the previous year. The net loss is mainly attributable to drop in generation of power due to acute shortage of fuel (gas), which has resulted in either closure of the power plants or operational for a very few days in a month and also an increase in interest cost.

Dividend

The Board of Directors of your company has not recommended any dividend for the financial year 2012-13.

Subsidiaries and Consolidated Financial Statements

Subsidiaries of your Company are predominantly spread across 3 main vertical business segments i.e., Energy, Airport and Transportation. In addition, your Company has other subsidiaries, which are engaged in Oil & Gas and Industrial Park among others. As on March 31, 2013 your Company has 7 direct subsidiaries, 16 step down subsidiaries and 2 associate companies. A list of these companies is provided separately as Annexure "A" to this report. There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. These financial statements disclose the assets, liabilities, income, expenses and other details of the company, its subsidiaries and associate companies.

Pursuant to the provisions of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08-02-2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company. As required under the said Circular, the Board of directors of your Company at its meeting held on February 14, 2013 gave its specific consent for not attaching the balance sheets of its subsidiaries, as they would be made available to its members at the company''s website.

A statement containing the brief financials of the Company''s subsidiaries for the financial year ended March 31, 2013 is provided as Annexure "B" to this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company Secretary. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

Developments in the existing assets

(i) Energy

The supply of natural gas to the gas based power projects of your company deteriorated further during the year 2012-13 with no major respite seen for another year or two. Due to an acute shortage of supply of natural gas, supply of gas to all power stations in Andhra Pradesh has been stopped since March 1, 2013. This has resulted in virtual closure of the power plants. However, Jegurupadu Phase I plant is operating with a partial load for a few days in a month. The Company however is positive that this situation would improve in the coming years.

(ii) Airports

The expansion works at Chhatrapathi Shivaji International Airport (CSIA), Mumbai is progressing very well and the new Terminal 2 (International Operation) is expected to be completed by end 2013. The first of its kind in India, a multi level car parking facility with a capacity to park around 5,100 cars is nearing completion. A unique 83.8 mtr height iconic structure is getting ready for the Air Traffic Control operations (ATC towers) at Chhatrapati Shivaji International Airport (CSIA) and the same will be operational by end 2013.

The ongoing expansion works at Terminal 1 at Bangalore International airport is taking a very good shape as planned and will be completed by last quarter of 2013. Upon completion, this will enhance the operational performance to handle the projected increase in passenger traffic from the current 11.2 million to around 20 million passengers per annum.

(iii) Transportation

During the year, GVK Shivpuri Dewas Expressway Private Limited, a subsidiary of the Company, had terminated the Concession Agreement dated:12-01-2013, executed by it with the National Highways Authority of India for four laning of Shivpuri Dewas section of NH-3 from Km 236.000 to Km 566.450, in the State of Madhya Pradesh, in terms of Clause 34.8 of the Concession Agreement.

Emerging Opportunities Resources

During the year, GVK Hancock, has received the Queensland Coordinator General''s Report (State approval) followed by the Federal Government approval on the environmental clearance for the Alpha Coal and Rail Project in Queensland, Australia. The milestone is a major achievement for GVK as Alpha Project is the only Galilee Basin proponent with an approved Environmental Impact Statement (EIS).

During the year, GVK Coal Infrastructure (Singapore) Pte Ltd one of the Group companies of GVK and Aurizon (Australia''s largest rail freight company) have signed a non-binding term sheet to jointly progress the development of rail and port infrastructure to unlock Galilee Basin coal reserves including GVK Hancock''s Alpha, Kevin''s Corner and Alpha West coal mines and a process to support the next phase of coal growth in the Bowen Basin. Under the proposed framework, Aurizon would acquire a majority (51%) interest in Hancock Coal Infrastructure Pty Ltd (HCI), which owns GVK Hancock''s rail and port projects and would invest through upfront consideration at completion of the transaction and deferred consideration at financial close of each phase of the projects.

GVK has signed a contract with Samsung C and T of Korea and Smithbridge of Australia for the construction of 80 mtpa T3 Port in North Queensland, Australia, taking a step closer to its target of bringing out the first coal in 2015-16.

Airports

GVK has signed an operations and management contract with The Airports Authority of Indonesia, (Angkasa Pura Airports APl), the Indonesian government airport operator to manage the non-aeronautical commercial operations at Indonesia''s second busiest Bali (Denpasar) International Airport. The scope includes both, the existing terminals and the new international terminal which is currently under construction and is expected to open in the third quarter of 2013 with a major make-over.

Financial Statements

The audited stand alone and consolidated financial statements of the company along with its subsidiary companies are attached herewith and form part of this annual report. These have been prepared in accordance with the provisions of the Companies Act, 1956, the Listing Agreement, the Accounting Standard (AS-21) on Consolidated Financial Statements and the Accounting Standard (AS-23) on Accounting for Investments in Associates.

Awards and recognitions

Following are some of the awards and recognitions that your Company / its Subsidiaries / Associates received during the current year. Certifications, Recognitions and Awards for your Company (GVKPIL)

- CDP India 200 Climate Change Report 2012 was released at Bombay Stock Exchange in the presence of dignitaries including Ms. Susan Howells, COO - CDP UK, wherein, GVK Power & Infrastructure Ltd. has been ranked 2nd in the Country across all sectors (compared to 8th position in 2011) for its Carbon Disclosure Leadership Index (CDLI).

- GVK was honoured with the EPC World Award for ''Outstanding Contribution in Power Generation - Infrastructure Category at the third EPC World Awards held in New Delhi

Certifications, Recognitions and Awards for Bangalore International Airport Limited (BIAL) :

- Distinction of being the first company in India to be certified as a Green Company as per the CII Green Co rating system.

- Airport carbon accreditation Level 2 by Airport Council International (ACI) and is the first Airport in Asia Pacific to cross this milestone.

- Recognized by the State of Karnataka on the International World Environment Day (5th June) for adopting environmental friendly best practices and setting benchmarks across all functions.

- Golden Peacock Award - Environmental Management 2012 for excellent environmental management initiatives taken in and around the airport.

- Excellent Energy Efficient Unit Award by CII.

- ISO 50001 : 2011 Energy Management System Certificate

- INDIA 3.0 - IT Innovation Awards -2013 - NASSCOM - Jury Commendation Certificate - Best IT driven Innovation.

Certifications, Recognitions and Awards for Mumbai International Airport Private Limited (MIAL) :

- GVK CSIA has been awarded ISO 14064-1- 2006 certification for its Green House Gas emission accounting for the 2nd consecutive year. With this achievement, GVK CSIA is, now in the process of upgrading CSIA''s ACI Airport Carbon Accreditation Rating from Mapping (Level 1) to Reduction (Level 2).

- GVK CSIA has been rated 3rd best Airport worldwide in the 25-40 mppa category by Airports Council International (ACI). The survey was conducted at 275 airports across the Globe.

Following are some of the achievements, awards and recognitions that your Promoter Directors received during the year;

- Dr. G V K Reddy, Chairman & Managing Director of your company has been recognized as ''Power Brands Hall of Fame Corporate Luminary of the year'' for his exemplary contribution to the industry and society.

Corporate Governance Report and Management Discussion and Analysis

Your Company continues to practice the best of the Corporate Governance policies. Your Company is in compliance with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). A certificate, from a Company Secretary in whole time practice, on compliance with the mandatory recommendations of the committee is provided as an annexure to the Directors'' Report. As required under Clause 49 of the Listing Agreement with the Stock Exchanges, a Corporate Governance Report and management Discussion and Analysis are attached to this annual report.

Corporate Social Responsibility (CSR)

- The GVK Group''s Corporate Social Responsibility (CSR) initiatives are implemented through GVK Foundation, the CSR arm of the GVK Group. The Foundation is involved mainly in the areas of education, health and hygiene; community-based programs; empowerment and entrepreneurship development, arts, music, sports and various social economical and cultural activities. It reaches out with the objective of improving the quality of life of the economically deprived people in the places where the Group has a presence.

- The Foundation has been funding GVK EMRI which was taken over the management of Emergency Management and Research Institute (EMRI), a non-profit organization and is providing integrated emergency response service across the country in 11 States and 2 Union Territories in India under public private partnership mode.

Directors

Appointments by rotation

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the Company Mr. Krishna Ram Bhupal and Mr. S Balasubramanian, Directors of the company will retire by rotation at this meeting and being eligible, your Board recommends their re-appointment.

Directors'' Responsibilities Statement

Pursuant to the requirements specified under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibilities Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) the directors had 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 March 31, 2013 and of the profit or loss of the Company for the said period;

iii) that the directors had 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; and

iv) the directors had prepared the annual accounts for the financial year ended March 31, 2013 on a "going concern" basis. Auditors

SR Batliboi & Associates, Statutory Auditors of your Company have informed your Company that with effect from 01-04-2013 the legal status of their firm has been changed to SR Batliboi & Associates LLP consequent to their conversion into a Limited Liability Partnership (LLP) while their registration number (101049W) remains the same. The Board of Directors of your Company has taken note of the same.

S R Batliboi & Associates LLP, the Statutory Auditors of the Company will retire at the conclusion of this Annual General Meeting. They have offered themselves for reappointment as Statutory Auditors and have confirmed that their re-appointment, if made, would be within the limits prescribed 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.

Other Information

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on May 14, 2013 and recommended the same for the approval of the Board of Directors.

Internal Control Systems and their adequacy

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Company''s business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee actively reviews internal audit reports and effectiveness of internal control systems.

Internal Control Systems are implemented to safeguard the Company''s assets from loss or damage, to keep constant check on the cost structure, to prevent revenue leakages, to provide adequate financial and accounting controls and to implement accounting standards.

Public Deposits

During the year under review, your company has neither invited nor accepted any fixed deposits from the public.

Particulars of Employees

As required under 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 employee(s) are set out in the Annexure "C" to this report.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 21 7(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided under Notes to the Balance Sheet and Profit and Loss Account.

Acknowledgements

The Directors of your Company thank the Government of India, various State Governments and their concerned Department / Agencies / Regulatory Authorities for their continued support and cooperation. The Directors also wish to place on record the support extended by various Banks, Financial Institutions and every stakeholder of the Company.

The Directors further wish to appreciate and value the contributions made by every employee of the GVK Family.

For and on behalf of the Board of Directors

Place : Hyderabad Dr. G V K Reddy

Date : May 15, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the 18 th annual report together with the audited balance sheet and profit and loss account of your Company for the year ended March 31, 2012.

Consolidated Financial results

Being a holding company of different vertical business operations, your company does not have independent operating revenues other than O&M fee, incentives and dividends, if any, from its subsidiaries, interest and other treasury income earned on surplus funds. Following is the summary of consolidated results of the company, its subsidiaries and associates.

(Rs.Lakhs)

Particulars 2011-12 2010-11

Financial Performance

Operational Income 249,183 191,466

EBIDTA 69,408 51,399

Other Income 8,887 2,853

Interest & Financial Charges 46,727 26,314

Depreciation 24,893 18,364

Provision for taxes 6,782 2,132

Profit before tax and share of profits for associate and minority (107) 7,442 interest

Add: Share of income from Associates 10,639 11,093

Less: Minority Interest 4,386 3,044

Total Profit for the year 6,146 15,491

Add: Balance brought forward from previous years 59,052 43,561

Balance available for appropriation 65,198 59,052

Appropriations

Transfer to General Reserve - - EPS (Rupees)

Weighted Average no. of Equity Shares 1,579,210,400 1,579,210,400

Basic and Diluted 0.39 0.98

Financial Position

Fixed Assets ( Net of Depreciation) 1,670,708 686,810

Cash and Bank balance 172,626 32,820

Net Current Assets (161,433) (26,930)

Total Assets 2,289,511 1,071,470

Equity 15,792 15,792

Reserves 332,345 322,886

Net worth 348,137 338,678

Our total income increased by 24.7 % to Rs.2,58,070 Lakhs from Rs.1,943,19 Lakhs in the previous year. The Power assets contributed an income of Rs.1,73,124 Lakhs compared to Rs.1,73,475 Lakhs (67.10 % of total income) in the previous year. The Transportation asset contributed an income of Rs.23,192 Lakhs (8.99% of total income) compared to Rs.19,243 Lakhs in the previous year. Airport assets contributed an income of Rs.59,700 Lakhs (23.15% of total income). The other assets contributed Rs.1,901 Lakhs compared to Rs.1,601 Lakhs in the previous year. Airport assets (Mumbai and Bangalore Airports) as the associates of the company have contributed to net profit of Rs.106,39 Lakhs compared to Rs.11,093 Lakhs in the previous year. The net profit after tax is Rs.6,164 Lakhs as against Rs.15,491 Lakhs in the previous year.

During the current year (from October 18, 2011), Mumbai International Airport Private Limited (MIAL) has become a subsidiary (associate company in the previous year) of your Company by virtue of increase in our equity holding from 37% to 50.50%. Accordingly, these financial statements reflect every line item of the financials of MIAL. However, Bangalore International Airport Limited (BIAL) continues to be an associate of your company during the current year (same as in previous year), even though our equity holding in BIAL was increased from 29% to 43% during the current year (from October 19, 2011).

The net profit after tax, share of profit from associate and minority interest was Rs.61.48 Crores as against Rs.154.92 Crores in the previous year. The fall in net profit is mainly attributable to drop in generation of power due to shortage of fuel (Gas) and an increase in interest cost.

Dividend

The Board of Directors of your company has not recommended any dividend for the financial year 2011-12.

Subsidiaries and Consolidated Financial Statements

Subsidiaries of your Company are predominantly spread across 3 main vertical business operations i.e., Energy, Airport and Transportation. In addition, your Company has other subsidiaries, which are engaged in Oil & Gas and Industrial Park amongst others. As on March 31, 2012 your Company has 7 direct subsidiaries, 15 step down subsidiaries and 2 associate companies. A list of these companies is provided separately as Annexure "A" to this report. There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. These financial statements disclose the assets, liabilities, income, expenses and other details of the company, its subsidiaries and associate companies.

Pursuant to the provision of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08-02-2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company. As required under the said Circular, the Board of directors of your Company at its meeting held on February 14, 2012 gave its specific consent for not attaching the balance sheets of its subsidiaries, as they would be made available to its members at the company's website.

A statement containing the brief financial details of the Company's subsidiaries for the financial year ended March 31, 2012 is provided as Annexure "B" to this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company Secretary. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

Developments in the existing assets

i) Energy

During the FY 2010-11, your Company through its subsidiary i.e. GVK Energy Limited had entered into an Investment Agreement with M/s. 3i India Infrastructure Fund, Actis Infrastructure India PCC Limited and an affiliate of the Government of Singapore Investment Corporation (GIC) for a total Private Equity investment of Rs.1,498 Crores for an ultimate equity dilution of 24.97%. Out of this, the second & final tranche of Rs.561.75 Crores was received from the said PE Investors during the current financial year.

ii) Airport

During the year (on 18-10-2011), your company through its step down subsidiary GVK Airport Holdings Private Limited (GVKAHPL), acquired additional 10,80,00,000 equity shares of Rs.10 each (aggregating to 13.50% stake) of Mumbai International Airport Private Limited (MIAL) from Bid Services Division (Mauritius) Limited (BSDM) at a cost of US$ 231 Million thereby increasing the aggregate total equity holding in MIAL to 50.50% from 37%.

Further, during the year (on 19-10-2011), your company through its step down subsidiary Bangalore Airport & Infrastructure Developers Private Limited, acquired additional 53,844,000 equity shares of Rs.10 each (aggregating to 14% stake) in Bangalore International Airport Limited (BIAL) from Siemens Project Ventures GmbH (Siemens) at a cost of Rs.613.82 Crores making the aggregate total effective stake in BIAL to 43% from 29%.

iii) Transportation

During the year, your Company formed a SPV in the name of Shivpuri Dewas Expressway Private Limited, a subsidiary of GVK Transportation Private Limited, a wholly owned subsidiary of the Company to implement the 332.46 Km Shivpuri Dewas Expressway project. With this, there would be three road projects under development in this vertical business.

Emerging Opportunities Resources

During the year, your company had participated as an investor for the acquisition of a major coal resource and infrastructure development project in the Galilee Basin, Queensland, Australia. Your Company currently holds 10% in the equity share capital of GVK Coal Developers (Singapore) Pte Limited ("GVKCD") a step down subsidiary of GVK Natural Resources Private Limited ("GVKNRPL") a GVK Group company, with an option to increase its stake upto 49%. The coal resource consists of an estimated 7.9 billion tonnes compliant with Australia's Joint Ore Reserves Committee (JORC) resource categorisation with a 3.3 billion tones reserves in Measured Indicated categories along with a 495 km rail line and a 60 million tonnes per annum port at Abbot Point.

GVKNRPL has entered into a transaction through its subsidiaries, incorporated in Singapore, to acquire:

a. 79% shareholding in Hancock Coal and Hancock Alpha West Coal Projects, located in the Galilee basin in the State of Queensland, Australia while the balance 21% has been retained by the Seller i.e. Hancock Prospecting Pty Ltd. The JORC study estimates the combined resources at Alpha and Alpha West at 3.6 billion tonnes.

b. 100% shareholding in Kevin's Corner Coal Project, located adjacent to Alpha Coal Project. The JORC study estimates the resources to be around 4.3 billion tonnes.

c. 100% shareholding in the proposed rail project connecting the above coal projects to the port of Abbot Point and in the proposed port expansion project to export the coal from the aforesaid coal projects.

The acquisition offers the following benefits to GVKPIL.

a. good investment opportunity with significant value upside.

b. option to enter into long term coal purchase contracts up to 20 Million tonnes per annum (to supply around 7,500 megawatts of power generating capacity) for securing long term fuel supplies for its subsidiary GVK Energy Limited.

c. option to take a lead role in the company that will own Rail and Port projects, on mutually agreed terms with GVKNRPL.

Financial Statements

The audited stand alone and consolidated financial statements of the company along with its subsidiary companies are attached herewith and form part of this annual report. These have been prepared in accordance with the provisions of the Companies Act, 1956, the Listing Agreement, the Accounting Standard (AS-21) on Consolidated Financial Statements and the Accounting Standard (AS-23) on Accounting for Investments in Associates.

Awards and recognitions

Following are some of the awards and recognitions that your Company/its Subsidiaries/Associates received during the current year

- GVK has been awarded the 'Asia Deal of the year' and the 'Asia Outbound Investor of the year' at the 8th annual Asia Mining Congress held in Singapore on 28-03-2012. GVK was recognized for its acquisition of the Australia based Hancock Coal and Infrastructure projects, which have paved the way for future investments from other corporate investors.

- GVKPIL is ranked among top ten companies on "Carbon Disclosure Leadership Index" in India as per the CDP India 200 Report 2011.

- GVK's EPC arm GVK Projects & Technical Services has received ISO 9001-2008 accreditation from internationally renowned agency TUV NORD.

- GVK EMRI has bagged the following prestigious awards

- The NASSCOM 2012 Innovation Award.

- Marico's Innovation for India Awards 2012 in Public Service category.

- Won eINDIA award for enabling IT in Saving Lives.

- GVKEMRI Assam received the Runner-Up in 6th National Road Safety Award

- Bangalore International Airport Limited (BIAL) has bagged the following prestigious awards

- First Company in India to be certified as a Green Company as per the CII GreenCo rating system

- Won the 'Most Innovative' Environmental Best Practice Award 2012 in the CII Environmental best practice award event.

- Won the Water Award for outstanding work in water management and sustainability at the Bangalore World Water Summit 2012.

- Mumbai International Airport Limited won the STAT TIMES International Award for Excellence in Air Cargo in the Indian region category - Cargo Airport of the year as runners up.

Following are some of the achievements, awards and recognitions that your Promoter Directors received during the year:

- Dr. G V Krishna Reddy, Chairman & Managing Director of your company has been awarded as the 'CONSTRUCTION WORLD-MAN OF THE YEAR' by the Construction World magazine.

- Mr. G V Sanjay Reddy, Vice Chairman of your company has been elected as Chairman of Confederation of Indian Industry, Southern Region for 2012-13.

Corporate Governance Report and Management Discussion and Analysis

Your Company continues to practice the best of the Corporate Governance policies. Your Company is in compliance with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). A certificate, from a Company Secretary in whole time practice, on compliance with the mandatory recommendations of the committee is provided as an annexure to the Directors' Report. As required under Clause 49 of the Listing Agreement with the Stock Exchanges, a Corporate Governance Report and management Discussion and Analysis are attached to this annual report.

Corporate Social Responsibility (CSR)

- The GVK Group's social responsibility initiatives are implemented through GVK Foundation, the CSR arm of the GVK Group. The Foundation is involved mainly in the areas of education, health and hygiene; community-based programs; empowerment and entrepreneurship development, arts, music, sports and various social economical and cultural activities. It reaches out with the objective of improving the quality of life of the economically deprived people in the places where the Group has a presence.

- The Foundation has been funding GVK EMRI which was taken over the management of Emergency Management and Research Institute (EMRI), a non-profit organization and is providing integrated emergency response service across the country in 11 States and 2 UT in India under public private partnership mode.

Directors

Appointments by rotation

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the Company Mrs. G Indira Krishna Reddy, Mr. G V Sanjay Reddy and Mr. Ch G Krishna Murthy, Directors of the company will retire by rotation at this meeting and being eligible, your Board recommends their re- appointment.

The Board of Directors at their meeting held on November 10, 2011 appointed Mrs. Ranjana Kumar as an additional director subject to your approval. Your Board recommends her appointment as an independent director whose period of office shall be liable to retire by rotation.

Cessation

During the year Mr. Pradip Baijal, Director has expressed his inability to continue as a director due to his other commitments. The board of directors at its meeting held on November 10, 2011 has accepted the same and placed on record its appreciation for the services rendered by Mr. Pradip Baijal, during his tenure as director of the company.

Superannuation

Mr. A Issac George, who has been with the Group for over a period of 17 years has attained superannuation on May 9, 2012 as Chief Financial Officer of the Company. He will continue to be on the Board as a Non Independent and Non Executive Director of the Company and is liable to retire by rotation. The Board placed on record its deep appreciation of the services rendered by Mr. Issac George. In recognition of his meritorious services, he is being appointed as a Chief Executive Officer of the Transportation vertical.

Directors' Responsibilities Statement

Pursuant to the requirements specified under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors' Responsibilities Statement, it is hereby confirmed that;

i) in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) the directors had 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 March 31, 2012 and of the profit or loss of the Company for the said period;

iii) that the directors had 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; and

iv) the directors had prepared the annual accounts for the financial year ended March 31, 2012 on a "going concern" basis.

Auditors

M/s. S R Batliboi & Associates, the Statutory Auditors of the Company will retire at the conclusion of this Annual General Meeting. They have offered themselves for reappointment as statutory auditors and have confirmed that their re-appointment, if made, would be within the limits prescribed 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.

Other Information

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on May 8, 2012 and recommended the same for the approval of the Board of Directors.

Internal Control Systems and their adequacy

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Company's business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee actively reviews internal audit reports and effectiveness of internal control systems.

Internal Control Systems are implemented to safeguard the Company's assets from loss or damage, to keep constant check on the cost structure, to prevent revenue leakages, to provide adequate financial and accounting controls and implement accounting standards.

Public Deposits

During the year under review, your company has neither invited nor accepted any fixed deposits from the public.

Particulars of Employees

As required under 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 employee(s) are set out in the Annexure "C" to this report.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 21 7(1 )(e) of the Companies Act, 1 956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided under Notes to the Balance Sheet and Profit and Loss Account.

Acknowledgements

The Directors of your Company thank the Government of India, various State Governments and their concerned Department / Agencies / Regulatory Authorities for their continued support and cooperation. The Directors also wish to place on record the support extended by various Banks, Financial Institutions and every stakeholder of the Company.

The Directors further wish to appreciate and value the contributions made by every employee of the GVK Family.

For and on behalf of the Board of Directors

Place : Hyderabad Dr. G V Krishna Reddy

Date : May 9, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting the 17th annual report together with the audited balance sheet and profit and loss account of your Company for the year ended March 31, 2011.

Consolidated Financial results

Being a holding company of different vertical business operations, your Company does not have independent operating revenues other than O&M fee, incentives and dividends, if any, from its subsidiaries, interest and other treasury income earned on surplus funds. Following is the summary of consolidated results of the company, its subsidiaries and associates.

(Rs. Lakhs)

Particulars 2010-11 2009-10

Financial Performance

Operational Income 1,914,66 1,786,64

EBIDTA 513,99 468,30

Other Income 28,53 29,18

Interest & Financial Charges 263,14 217,10

Depreciation 183,64 137,12

Provision for taxes 21,32 20,01

Profit before tax and share of profits for associate and minority interest 74,42 123,25

Add: Share of income from Associates 110,93 51,68

Add: Profit on the sale of subsidiary - -

Less: Minority Interest 30,44 19,06

Total Profit for the year 154,91 155,87

Add: Balance brought forward from previous years 435,61 279,74

Balance available for appropriation 590,52 435,61

Appropriations

Transfer to General Reserve - -

EPS (Rupees)

Weighted Average no. of Equity Shares 1,579,210,400 1,532,189,062

Basic and Diluted 0.98 1.02

Financial Position

Fixed Assets ( Net of Depreciation) 3,671,88 3,948,32

Cash and Cash Equivalent 126,88 38,09

Net Current Assets 397,20 242,00

Total Assets 10,316,39 8,119,15

Equity 157,92 157,92

Reserves 3,228,86 2,998,00

Net worth 3,386,78 3,155,92

Our total income increased by 7% to Rs.1,943.19 Crores from Rs.1,815.82 Crores in the previous year. The Power assets contributed an income of Rs.1,712.93 Crores (88.15% of total income) compared to Rs.1,603.28 Crores in the previous year. This increase is mainly attributable to full year operation of Jegurupadu Phase II and Gautami Power Plants in the current year. The Transportation asset contributed an income of Rs.189.16 Crores (9.73% of total income) compared to Rs.170.75 Crores in the previous year. The other segment contributed Rs.41.10 Crores (2.12% of total income) compared to Rs.41.79 Crores in the previous year. The Airport assets (Mumbai and Bangalore Airports) as the associates of the company have contributed to net profit of Rs.110.93 Crores as compared to Rs.51.68 Crores in the previous year. The consolidated net profit after tax was Rs.154.91 Crores as against Rs.155.87 Crores in the previous year.

Dividend

Apart from implementing the existing or new projects and / their expansions under different vertical businesses, through its subsidiaries and associate companies, your company is also exploring various business opportunities. In this endeavour, it is necessary to conserve the funds to meet the investment opportunities, which your board believes would enhance the shareholders value in the long term. Therefore, your Board has not recommended any dividend for the financial year 2010-2011.

Subsidiaries

Subsidiaries of your Company are predominantly spread across 3 main vertical business operations i.e., Energy, Airport and Transportation verticals. In addition, your Company has other subsidiaries, which are engaged in Oil & Gas and Industrial Park among others. Having completed the creation of separate business verticals, your Company as on March 31, 2011 has 8 direct subsidiaries, 12 step down subsidiaries and 3 associate companies. A list of these companies is provided separately as Annexure "A" to this report.

In terms of section 212 of the Companies Act, 1956, your Company is required to attach the directors report, balance sheets, profit and loss account of its subsidiary companies to its Annual Report. However, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011, dated: 08-02-2011 has granted a general exemption to all the Companies for not attaching the above documents of subsidiaries with the Annual Report of the Holding Company, subject to compliance of the conditions specified therein. As required under the said general circular, the Board of directors of your Company at its meeting held on May 7, 2011 gave its specific consent for not attaching the balance sheets of its subsidiaries, as they would be made available to its members at the companys website.

In terms of the said notification of the MCA, a summary of the financial information of each of the subsidiaries of your Company is provided as Annexure "B" to this report. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company Secretary. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. These documents will also be available for inspection during the business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

Performance of the existing assets

i) Energy

Currently we operate 900 MW gas based power plants through step down subsidiaries i.e. GVK Industries Limited Jegurupadu Phase-I (216 MW), Phase-II (220 MW) and GVK Gautami Power Limited (464 MW). Following is the gist of performance of these assets.

GVK Industries Limited

Phase-I

During the year Jegurupadu Phase I was operated at a Plant Availability Factor (PAF) and Plant Load Factor (PLF) of 95.94% and 76.62% respectively (PY 98.58 % and 89.56%) and reported a loss of Rs.29.03 Crores (PY Rs.0.15 Crores). The decline in PAF, PLF and profits are mainly attributable to non availability of natural gas. The energy generated during the year was 1455.32 Million kWh (PY 1685.82 Million kWh) out of which 1422.74 Million kWh was exported and 32.58 MUs were for Auxiliary Consumption. The Station Heat Rate during the year was 2007 kcal/kWh as against 1968 kcal/kWh in the previous year.

Phase-II

During the year Jegurupadu Phase II was operated at a PAF and PLF of 89.17% and 81.75% respectively (PY 95.29% and 90.35%) and reported a profit after tax of Rs.20.74 Crores (PY Rs.25.26 Crores). The decline in PAF, PLF and profits are mainly attributable to non availability of natural gas. The energy generated during the year was 1638.85 Million kWh (PY 1742.47 Million kWh) out of which 1606.96 Million kWh was exported and 31.89 MUs were for Auxiliary Consumption. The Station Heat Rate during the year was 1824 kcal/kWh as against 1808 kcal/kWh in the previous year.

GVK Gautami Power Limited

Phase-I

During the year Gautami Phase I was operated at a PAF and PLF of 88.64% and 83.39% respectively (PY 91.47% and 88.20%) and reported a profit after tax of Rs.76.58 Crores (PY Rs.28.14 Crores) showing a growth of 272.14%. The energy generated during the year was 3422.90 Million kWh (PY 2937.98 Million kWh) out of which 3346.76 Million kWh was exported and 76.14 MUs were for Auxiliary Consumption. The Station Heat Rate during the year was 1825.60 kcal/kWh as against 1798.98 kcal/ kWh in the previous year.

ii) Airport

Under Airport asset, currently we operate Chhatrapati Shivaji International Airport (CSIA), Mumbai (a brown field project) and Bengaluru International Airport, Bengaluru (a green field project). Following is the gist of performance of these assets.

Mumbai International Airport Pvt. Ltd (MIAL)

During the year MIAL handled 29.07 Mio (PY 25.61 Mio) passenger traffic, handled 242,659 ATMs (PY 229,799 ATMs) and 340,260 MT (PY 250,237 MT) of Cargo reflecting a growth of 14%, 5.6% and 36% respectively. MIAL reported a profit after tax of Rs.197.04 Crores for the financial year 2010-2011 (PY Rs.132.80 Crores) showing a growth of 48%. MIAL had completed 31 of the 32 mandatory projects under OMDA as of December 2010. The only mandatory project remaining to be completed is the S.09 International Terminal Expansion - South West Pier which is pending due to the delay in handing over of Chhatrapati Shivaji Maharaj statue area. During the year Terminal 1C was inaugurated with a lot of retail offerings. CSIA has become the first Indian airport website, to offer mobile airport portal.

Bangalore International Airport Ltd. (BIAL)

During the year BIAL handled 11.63 Mio (PY 9.92 Mio) passenger traffic, handled 111,787 ATMs (PY 104,653 ATMs) and 222,783 MT (PY 174,648 MT) of Cargo reflecting a growth of 17%, 7% and 28% respectively. BIAL reported a profit after tax of Rs.132.10 Crores for the financial year 2010-2011 (PY Rs.77.70 Crores) showing a growth of 70%. A new and spacious VIP lounge at the Airport has been opened in January 2011. The expansion of the existing terminal 1 has been designed to enhance the operational performance in order to handle, inter-alia, the increase of passenger traffic from the current 11.2 million passengers to approximately 17.2 million passengers annually up to the year 2015. The Project is scheduled to be completed within a period of 18 months from the commencement of its construction.

During the year 2010-2011, Mumbai and Bengaluru airports together have handled passenger traffic of 40.7 million. With these two busy airports under our management, GVK would be Indias biggest airport operator in the private sector.

iii) Transportation

A 90.4 Km Jaipur - Kishangarh Expressway on NH-8 connecting Mumbai and New Delhi is a BOT project and is a part the prestigious Golden Quadrilateral Project undertaken by the Central Government of India through National Highways Authority of India (NHAI) connecting all four major metro cities i.e. New Delhi, Mumbai, Chennai and Kolkata. Following is the gist of performance of this asset.

GVK Jaipur Expressway Pvt Ltd.

Toll collected by the Company during the year was Rs.189.16 Crores (PY Rs.170.75 Crores) registering a growth of 11%. The profit after tax is at Rs.80.02 Crores for the year (PY Rs.58.96 Crores) showing a growth of 35.73%. Multi Axis vehicles alone have contributed 73% of the toll revenue collections during the year. This is the first road project in India to have shared certain agreed percentage of excess toll revenue over the projected toll fee with NHAI.

Assets under construction

i) Energy

Alaknanda Hydro Power Company Limited

The 330MW Alaknanda Hydro Electrc Power Project on the river Alaknanda, Srinagar, Uttarakhand is being implemented with an estimated project cost of Rs.3,675 Crores. The Excavation in the Power House, the Forebay work, penstock work are fully completed and the 335000 M3 (i.e. 61%) of concrete for dam is complete. All other major works at project are being completed as scheduled and the project is expected to be commissioned by 2012.

GVK Power (Goindwal Sahib) Limited

The 540MW the thermal (coal based) power project in Tarn Taran district, Punjab is being set up at an estimated cost of Rs.3,200 Crores. The Power House building piling work and bunker bay concrete piling and raw water reservoir excavation work completed to the extent of 85% and BTG works are in full swing and the project is expected to be commissioned by 2013.

ii) Transportation

GVK Deoli Kota Expressway Private Limited

The Company was incorporated as a SPV during April 2010, to implement and augment the existing Deoli-Kota Section of National Highway (NH) No. 12 from Km 165 to Junction of NH - 76 on Kota Bypass (approximately 83.04 Km) in the State of Rajasthan by four laning on design, build, finance, operate and transfer (DBFOT) basis and has signed the financing documents on January 5, 2011 with a consortium of lenders for an estimated project cost of Rs.823.45 Crores with debt equity of 80:20. The project would become operational within 30 months as per the Concession Agreement.

GVK Bagodara Vasad Expressway Private Limited

The Company was incorporated as a SPV during February 2011, to implement the Six Laning of existing three lanes of Bagodara - Wataman - Tarapur - Vasad Road Project (State Highway No.8, Km 0/0 to Km 101/9) in the State of Gujarat on BOT Basis. Requisite Concession Agreement has been executed with the Gujarat State Road Development Corporation. Cost of the project is estimated at Rs.1200 Crores. The project would become operational within 30 months as per the Concession Agreement.

Other Developments

i) Energy

During the year your Company has transferred its entire shareholding in the power assets viz GVK Industries Limited, GVK Gautami Power Limited, GVK Power (Goindwal Sahib) Limited, Alaknanda Hydro Power Company Limited, GVK Coal (Tokisud) Company Private Limited, to GVK Energy Limited, a wholly owned subsidiary of the Company for a consideration of Rs.1333.17 Crores. With this, the creation of energy vertical has been completed in all respects.

During November 2010, your Company through its subsidiary GVK Energy Limited has entered into an Investment Agreement with M/s. 3i India Infrastructure Fund, Actis Infrastructure India PCC Limited and an affiliate of the Government of Singapore Investment Corporation (GIC) for a total Private Equity investment of Rs.1498 Crores for an ultimate equity dilution of 24.97% in GVK Energy Limited.

ii) Airport

During the year your Company has signed an agreement to acquire 13.5% additional equity stake in Mumbai International Airport Limited (MIAL), from Bid Services Division (Mauritius) Limited, through a step down subsidiary, subject to regulatory approvals. On completion of this acquisition, equity shareholding of the GVK Group stands at 50.5% from the existing 37% of the total paid-up share capital in MIAL.

iii) Transportation

During the year, your Company has formed two SPVs as subsidiaries of GVK Transportation Private Limited, a wholly owned subsidiary of the Company. Further, your Company on April 6, 2011, as a concluding transaction, has transferred its entire shareholding held in the GVK Jaipur Expressway Private Limited to GVK Transportation Private Limited, a wholly owned subsidiary of the Company for a consideration of Rs.274.01 Crores. With this, the creation of transportation vertical has been completed in all respects.

New Opportunities

i) Energy

During June 2010, your Company through a step down subsidiary, GVK Ratle Hydro Electric Project Private Limited (SPV), has signed the Power Purchase Agreement, with Power Development Department, Govt. of Jammu & Kashmir for implementing the 810MW Ratle Hydro Electric Project on the river Chenab, Kishtwar District, in the State of Jammu & Kashmir. The cost of the project is estimated at Rs.5368 Crores and expected to be operational by March 2017.

During February 2011 your Company has executed a Memorandum of Understanding (MOU) with the Punjab State Power Corporation Limited for implementation of 1320 MW Power Project (Phase-II), in the State of Punjab. For this purpose GVK Power (Khadur Sahib) Private Limited, a SPV has been incorporated as a step down subsidiary through GVK Energy Limited to implement the Coal based thermal power project with super critical technology, proposed to be developed in the additional land at the existing Goindwal Sahib site in Tarn Taran District, Punjab.

ii) Airport

Your Companys capabilities, expertise and strong track record in the airports sector helped getting two international airports to its portfolio. Your Company has signed two MoUs with Indonesian Government during its Presidents State visit to India in January 2011 to develop green field international airports in North Bali and Yogyakarta (Java), Indonesia. Bali and Java are the prime destinations for tourist traffic from both Europe and Asia. The signing of these MoUs marks a very significant milestone for GVK and your Company is confident that these agreements will yield significant synergies.

Financial Statements

The audited stand alone and consolidated financial statements of the company along with its subsidiary companies are attached herewith and form part of this annual report. These have been prepared in accordance with the provisions of the Companies Act, 1956, the Listing Agreement, the Accounting Standard (AS-21) on Consolidated Financial Statements and the Accounting Standard (AS-23) on Accounting for Investments in Associates.

Awards and recognitions

Following are some of the awards and recognitions that the promoters and the associate companies received during the current year. Dr. G V Krishna Reddy, Chairman & Managing Director of your company has been conferred with the prestigious "Padma Bhushan Award" for the Year 2011. The award was presented by Smt. Prathibha Devi Singh Patil, Honble President of India at a glittering function held on March 25, 2011. Our beloved Chairman has received this award towards his contribution to the society in the category of Trade and Industry.

Mr. G V Sanjay Reddy, Vice Chairman of your Company has been awarded as "Emerging Business Leader of the Year" by AIMA Managing India Awards 2011.

Chhatrapati Shivaji International Airport (CSIA) emerged as one of the top performing airports in the annual ACI Airport Service Quality Awards for 2010. It was rated the second best airport worldwide for airports in the 15-25 million passengers per annum (mppa) category as announced by ACI.

Bangalore International Airport Limited has bagged the prestigious Best Airport India award at the Skytrax World Airport Awards in Copenhagen, Denmark.

Liquidity

Your companys ability to raise finance for various projects of the Company has been its strength and is able to tie up the required financial assistance from the lending institutions even in the adverse market conditions. Surplus funds are deposited with banks, highly rated financial institutions and liquid mutual funds. These funds can be liquidated at a very short notice to meet the requirements of the company as and when needed.

Corporate Governance

Your Company continues to practice the best of the Corporate Governance policies. Your Company is in compliance with the recommendations of the Narayana Murthy Committee on Corporate Governance constituted by the Securities and Exchange Board of India (SEBI). A certificate, from a Company Secretary in whole time practice, on compliance with the mandatory recommendations of the committee is provided in the annexure to the Directors Report. As required under Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance is attached to this report.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility initiatives are implemented through GVK Foundation, the CSR arm of the GVK Group. The Foundation is involved mainly in the areas of education, health and hygiene; community-based programmes; empowerment and entrepreneurship development, arts, music, sports and various social economical and cultural activities. It reaches out with the objective of improving the quality of life of the economically deprived people in the places where the Group has a presence.

To further the CSR objective, GVK has taken over the management of Emergency Management and Research Institute (EMRI), a non-profit organization during May, 2009 to provide integrated emergency response service across the Country under public private partnership mode. Since then, the Foundation has been funding GVK EMRI.

Highlights of GVK EMRI

Operates through 11 States in the country and serves nearly 500 million people. Currently, there are about 2802 ambulances to provide pre hospital care which has saved Lives of approximately 323,924 people. GVK EMRI has partnered with global organizations (Stanford, CMU, 9-1-1, STC, AAPI, AAEMI, Geomed etc.) to strengthen its competencies, skills and to share the best international practices.

Government of Andhra Pradesh has identified GVK EMRI as out sourcing agency to run Fixed Day Health Services (FDHS) popularly known as "Hospital on wheels" in the districts of Srikakulam, Vijayanagaram, Visakhapatnam, Medak, Adilabad & Chittor. GVK EMRI has introduced boat ambulances in the state of Assam to facilitate Inter Facility Transfer requests from rural embankment regions of Brahmaputra River. Launched its services in Himachal Pradesh in the month of December 2010 with 100 ambulances. GVK EMRI has signed PPP agreement with the Government of Chattisgarh on May 17, 2010 for rendering emergency response services by deploying 172 ambulances.

Management Discussion and Analysis

A separate report on the Management Discussion and Analysis of the financial position and the results of operations of the Company for the year under review is annexed to this report as required under Clause 49 of the Listing Agreement with the Stock Exchanges

Directors

Appointment by rotation

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the Company Mr. K N Shenoy,

Mr. Pradip Baijal, Dr. A Ramakrishna and Mr. P Abraham, Directors of the company will retire by rotation at this meeting and being eligible, your Company recommends their re-appointment.

The Board of Directors at their meeting held on May 7, 2011 re-appointed Mr. A Issac George as Director & Chief Financial Officer of the Company for a further period of 3 years with effect from April 1, 2011. Your Company recommends his re-appointment.

Cessation

During the year Mr. Sanjay Narayen, Director has expressed his inability to continue as a director due to his other commitments. The Board of directors at its meeting held on May 7, 2011 has accepted the same and placed on record its appreciation for the services rendered by Mr. Sanjay Narayen, during his tenure as director of the company.

Directors Responsibilities Statement

Pursuant to the requirements specified under Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibilities Statement, it is hereby confirmed that;

i. in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii. the directors had 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 March 31, 2011 and of the profit or loss of the Company for the said period;

iii. that the directors had 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, for preventing and detecting fraud and other irregularities; and

iv. the directors had prepared the annual accounts for the financial year ended March 31, 2011 on a "going concern" basis.

Auditors

M/s. S R Batliboi & Associates, the Statutory Auditors of the Company will retire at the conclusion of this Annual General Meeting. They have offered themselves for reappointment as statutory auditors and have confirmed that their re-appointment, if made, would be within the limits prescribed 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.

Audit Committee constitution

In compliance with the provisions of the Section 292A of the Companies Act, 1956 and the listing agreement entered into with the stock exchanges, the company had already constituted an Audit Committee during 2005 itself consisting of highly qualified and experienced members from various fields. The committee consists of four Independent Directors. The Chairman of the committee Mr. K N Shenoy, is an Independent Director and the committee meets periodically to review the quarterly financial statements and recommends its findings to the Board apart from taking action independently whenever required.

Other Information

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on May 6, 2011 and recommended the same to the Board. The Board of Directors have taken the same on record at its meeting held on May 7, 2011.

Internal Control Systems and their adequacy

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Companys business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee actively reviews internal audit reports and effectiveness of internal control systems.

Internal Control Systems are implemented to safeguard the Companys assets from loss or damage, to keep constant check on the cost structure, to prevent revenue leakages, to provide adequate financial and accounting controls and implement accounting standards.

Public Deposits

During the year under review, your company has neither invited nor accepted any fixed deposits from the public.

Particulars of Employees

As required under 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 employee(s) are set out in the Annexure "C" to this report.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of 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, the information relating to foreign exchange earnings and outgo is provided under Notes to the Balance Sheet and Profit and Loss Account.

Acknowledgements

On behalf of the Directors of the Company, I would like to place on record my deep appreciation to all the Central and State

Government Authorities, Regulatory bodies, Banks, Financial Institutions and every Stakeholder of the Company.

I also thank all my colleagues on the Board for their timely guidance and support extended to me. I personally appreciate and place on record the sincere services rendered by all the employees and their families for making the company what it is today. I sincerely thank everyone for their support and reiterate humbly that I have accepted the Padma Bhushan award on your behalf.

For and on behalf of the Board of Directors

Place: Hyderabad Dr G V Krishna Reddy

Date : May 7, 2011 Chairman & Managing Director

 
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