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Notes to Accounts of GVK Power & Infrastructure Ltd.

Mar 31, 2018

1 Corporate information

GVK Power & Infrastructure Limited (âthe Companyâ or âGVKPILâ) provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities. The registered office of the company is located at âPaigah Houseâ, 156-159 Sardar Patel Road Secunderabad, Telangana- 500003.

2. Statement of significant accounting policies

2.1 Basis of preparation

i. Compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act., 2013 (the Act), read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except the following:

- certain financial assets and liabilities are measured at fair value

- defined benefit plans - plan assets are measured at fair value.

a. Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Every holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote..

a) Term loan aggregating to Rs. 9,745 (March 31, 2017: Rs. 1 1,276) (excluding Interest) is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited out which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.33% per annum. The loan is repayable in twenty four unequal monthly instalments after a moratorium of twelve months from the date of first drawdown viz. April 30, 2016 (Refer note 39).

b) Term loan aggregating to Rs. 849 (March 31, 2017: Rs. 14,012) (excluding interest) is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.50% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. August 27, 2015 (Refer note 39).

b. Significant estimates

In calculating the tax expense for the current and previous period, the company has treated finance costs as non deductible expense for tax purposes. However, the tax legislation in relation to these expenditures is not clear and the company has on prudent basis, considered the same as non-deductible expense and the income tax assessments of the company are under dispute with Income Tax Authorities with respect to this matter. If the ruling should be in the favor of the Company, this would reduce the current tax payable and current tax expense by Rs. 817 (March 31, 2017: Rs. 1,296).

3. Earning per equity share (EPS)

Basic and Diluted EPS amounts are calculated by dividing the profit/ (loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. There are no potentially dilutive equity shares in the Company.

The following reflects the income and share data used in the basic and diluted EPS computations:

4. Commitments and Contingencies

A. Leases

a. Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/cancellable at the option of either of the parties. The Company has not entered into any non-cancellable leases.

There is no escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognised in the Statement of Profit and Loss is Rs. 11 (March 31, 2017: Rs. 12).

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss.

B. Capital and other commitments

i) Capital Commitments

The Company does not has any outstanding capital commitments as at year end. (March 31, 2017: Nil)

ii) Other Commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. Nil (March 31, 2017: Rs. 114,910).

b) The company has given undertaking to infuse equity aggregating to Rs. 383,561 (March 31, 201 7: Rs. 383,576) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 1 55,587,500 (March 31, 2017: 1 55,587,500), 22,495,000 (March 31, 2017: 22,495,000) and 48,000,000 (March 31, 201 7: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

c) During the year ended March 31, 2011, the Company, GVK Energy Limited (jointly controlled entity) and certain private equity investors (âinvestorsâ) had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limitedâs equity shares (âQualified IPOâ or âQIPOâ) within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (âPut Rightâ) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (âPut IRRâ) and ii) the fair market value of the investorâs shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement.

The Company based on legal advice believes that the put option with guaranteed return is not enforceable/ in view of the regulations of Reserve Bank of India and hence no liability towards the same has been accounted in the financial statements.

C. Contingent liabilities

Direct and indirect taxes

(i) Income tax demand for assessment year 2009-10 Rs. 10 (March 31, 2017: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2017: Rs. 279), for assessment year 2011-12 for Rs. 11 (March 31, 2017: Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2017: 44).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duty of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has received a favorable order from the Honâble High Court of Andhra Pradesh dated July 06, 2017 that stamp duty is not applicable on the above transfer of shares, hence the order has been set aside. Contigent liability in this regard is Rs. Nil (March 31, 2017 : Rs.(2,829)

Security against loan taken by others

i) The Company had provided security by way of pledge of 251,999,900 (March 31, 2017: 251,999,900) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2017: 230,960,770) shares of GVK Energy Limited for loans taken by the aforesaid joint venture entity.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs. 209,445 (March 31, 2017: Rs. 162,538) to subsidiaries and joint ventures and Rs. 368,519 to an associate (March 31, 2017: Rs. 369,975) for various fund and non-fund based facility availed by them.

Management is of the opinion that the aforesaid companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

5. Employee benefits

A) Defined contribution plan

B) Disclosures related to defined benefit plan

The Company has a defined benefit gratuity plan in India (funded). The Companyâs defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

1. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

2. The expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

3. The Company expects to contribute Rs. 1 to gratuity in the next year (March 31, 2017: Rs. 1)

6. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of âMicro, small and medium enterprises Act, 2006â is based on Managementâs knowledge of their status. There are no dues to micro, small and medium enterprises as at the year end.

7. In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the Investor Education and Protection Fund as at the year end.

8. Related Parties

(a) Related parties where control exists

GVK Jaipur Expressway Private Limited GVK Airport Developers Limited (GVKADL)

Goriganga Hydro Power Private Limited (upto December 31, 2017)

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited (upto December 31, 2017)

GVK Developmental Projects Private Limited GVK Airport Holdings Limited (GVKAHL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited (upto December 31, 2017)

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Limited

Mumbai International Airport Private Limited

GVK Airports International Pte Ltd

GVK Airport Services Private Limited

Sutara Roads & Infra Limited

GVK Shivpuri Dewas Expressway Private Limited

(b) Related parties where joint control exists

GVK Energy Limited

GVK Industries Limited

Alaknanda Hydro Power Company Limited

GVK Power (Goindwal Sahib) Limited

GVK Gautami Power Limited

GVK Power (Khadur Sahib) Private Limited

GVK Coal (Tokisud) Company Private Limited

Mumbai Aviation Fuel Farm Facility Private Limited

Mumbai Airport Lounge Services Private Limited

Seregraha Mines Limited

Bangalore International Airport Limited (upto July 13, 2017)

GVK Coal Developers (Singapore) Pte Ltd

(d) Key management personnel

Dr. GVK Reddy - Chairman Mr. G V Sanjay Reddy - Director Mr A Issac George - Director Mr Krishna R Bhupal - Director

(e) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Employee Welfare Trust

Crescent EPC Projects and Technical Services Limited (Formerly GVK Projects and Technical Services Limited)

9. Capital management

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, borrowings including interest accrued on borrowings and trade payables, less cash and short-term deposits.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. The Company has delayed repayment of dues to banks and financial institutions during the year. Hence, the entire portion of long term borrowing has been classfied as current.

10. Significant accounting judgements, estimates and assumptions

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

A. Judgements

In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

i. Impairment of non-current assets including investments in subsidiaries, joint ventures and associates

Determining whether investment are impaired requires an estimation of the value in use of the individual investment or the relevant cash generating units. The value in use calculation is based on Discounted Cash Flow (âDCFâ) model over the estimated useful life of the power plants, concession on roads, airports etc. Further, the cash flow projections are based on estimates and assumptions relating to conclusion of tariff rates, operational performance of the plants and coal mines, life extension plans, availability and market prices of gas, coal and other fuels, restructuring of loans etc in case of investments in entities in the energy business, estimation of passenger traffic and rates and favorable outcomes of litigations etc. in the airport and expressway business which are considered as reasonable by the management.

ii. Determination of control and accounting thereof

As detailed in the accounting policy, principles under Ind AS are different from the previous GAAP, especially with respect to assessment of control of subsidiaries. Accordingly certain entities like GVK Energy Limited, where the company has majority shareholding, they have been accounted as joint venture entity on account of certain participative rights granted to other partners/ investors under the shareholding agreements. Further, investment in GVK Coal Developers (Singapore) Pte. Ltd has been accounted as associate since the company participates in all significant financial and operating decisions. The company has therefore determined that it has significant influence over this entity, even though it only holds 10% of the voting rights.

Under Ind AS, joint ventures are accounted under the equity method as per Ind AS 28 against the proportionate line by line consolidation under previous GAAP.

iii. Also refer note 45 on significant judgement on going concern ability of the Company.

B. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Also refer note 30(b) for significant estimates for income taxes.

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in Note 33.

(iii) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(iv) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives and residual values of all its property, plant and equipment estimated by the management. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment, and the useful lives are in line with the useful lives prescribed under Schedule II of the Companies Act, 2013.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

11 Financial risk management objectives and policies

Financial Risk Management Framework

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A Price risk

The companyâs exposure to investment in mutual funds are subject to price and classified in the balance sheet as fair value through profit or loss.

Sensitivity

The table below summaries the impact of increase/decrease of the index on the companyâs investment in mutual fund and profit/(loss) for the period.

B Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guarantee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 9,762 (March 31, 2017: Rs. 10,275), being the total of the carrying amount of balances with trade receivables, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise receivables from related parties and not subject to significant credit risk based on past history.

C Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

D Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, investments, other financial assets and other financial liabilities.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations with floating interest rates. As the Company has debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are substantially dependent of changes in market interest rates.

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings. With all other variables held constant, the Companyâs profit/(loss) before tax is affected through impact on floating rate borrowings, as follows:

Foreign Currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

* Amount in INR is at basis the amortised cost valuation.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate, with other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.

12. Segment reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

13. The company has an investment in GVK Coal Developers (Singapore) Pte. Limited (GVK Coal) which is assessed as an associate to the Company. The Company exercises significant influence on GVK Coal as per Ind AS 28.

The Company has made investments and has receivables aggregating to Rs. 69,414 (March 31, 2017: Rs. 51,815 ) and provided guarantees and commitments for loans amounting Rs. 752,080 (March 31, 2017: Rs. 752,1 10 ) taken by GVK Coal as at March 31, 2018, and has undertaken to provide financial assistance of USD 7.83 million (Rs. 5,009 ) as at March 31, 2018, an entity whose current liabilities exceeds current assets by USD 2,151 million (Rs. 1,398,927 ) as at March 31, 2018 and has incurred losses of USD 77 million (Rs. 50,189 ) for the year ended March 31, 2018, based on the unaudited financial statements is witnessing material uncertainties. The prices of the coal have fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had an option to curtail the rights of the company on various assets either on October 2015 or every year thereafter. The lenders have not yet exercised this option.

GVK coal is in discussion with non- controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution. Management believes that while the prices of coal have fallen, the fall in prices of other commodities and services would offset the impact of fall in coal prices on the project by reducing capital and operating cost requirements and hence, GVK Coal would be able to ultimately establish profitable operations, meet its obligations and its current liabilities being in excess of current assets is temporary in nature. The coal prices have also shown an increasing trend in the recent past. The management further believes that even though there are material uncertainties in the short to medium term around achieving appropriate solutions with lenders, non-controlling share-holders and on funding the project, considering the prospects in the long term, presently no adjustment is required to receivables and , investments, and the Company considers the same as fully recoverable once the operations are established. Further, the management believes that considering the active discussions with the lenders, it is not probable that guarantees and commitments will be invoked. In the unlikely situation that the guarantees and commitments were to be invoked, the company will be required to arrange cash flows to service the guarantees and commitments. Such outflow which will be accompanied by acquisition of additional interest in the assets of the GVK coal and hence it is unlikely to have any significant adverse impact on the statement of profit and loss.

14. Certain subsidiaries and jointly controlled entity (group companies) of GVK Energy Limited (âGVKELâ), a jointly controlled entity are facing uncertainties as detailed below:

a) There has been uncertainty regarding supplies/availability of gas to power plants of GVK Industries Limited (GVKIL), subsidiary company, and GVK Gautami Power Limited (GVKGPL), jointly controlled entity. These group companies have made losses of Rs. 36,736 (March 31, 2017: Rs. 26,729 ). The lenders have classified the loan balances of these group companies as non-performing assets. The Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas. However in the interim these group companies are working with the lenders for one time settlement proposal wherein the loans would be settled at the value of the plant to be realised on its sale to APDISCOM. Further, Management, based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions, believes that these group companies continue to be in operation in foreseeable future despite continued losses or will be able to amicably settle the loan liability as part of one time settlement proposal. The Company has given corporate guarantee for the loan taken by GVKGPL. The Company accordingly believes that no provision for impairment/diminution is required towards carrying value of assets aggregating to Rs. 59,304 of GVKIL and Rs. 118,500 of GVKGPL respectively and also no provision towards corporate guarantee given to GVKGPL is necessary.

b) Uncertainty is faced by coal plant with carrying value of non-current assets of Rs. 402,550 (March 31, 2017: Rs. 422,510) of GVK Power (Goindwal Sahib) Limited (âGVKPGSLâ), subsidiary company, towards supply of fuel consequent to de-allocation of coal mine. Management has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal, approval for completed capital cost, etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. Pending determination of final tariff, PSERC in its interim order has allowed the subsidiary company to run the plant on imported fuel for up to two and half years within which GVKPGSL should make arrangements for coal on long term basis. In the interim Punjab State Power Corporation Limited (âPSPCLâ) has made certain deductions aggregating to Rs. 15,267 while approving the revenue claimed by GVKPGSL pursuant to the aforesaid interim order. GVKPGSL has also filed petitions with PSERC for the aforesaid deductions made by PSPCL.

In February 2018, GVKPGSL has obtained long term coal linkage through Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI scheme) for significant part of its capacity. Further in March 2018, PSERC has approved a provisional fixed charges of Rs 2.20 per unit till the final capital cost is determined.â

GVKPGSL was unable to run the plant at optimal capacity during financial year 2016-17 and 2017-18 primarily on account of low availability of fuel and hence defaulted on repayment of dues to lenders. Consequently the lenders have classified the loan balances of GVKPGSL as non-performing assets. GVKPGSL is currently working with lenders towards the resolution plan as required by the RBI notification dated February 12, 2018 on resolution of stressed assets. If a resolution plan is not implemented as per the timelines specified in the aforesaid notification, lenders shall file insolvency application, singly or jointly, under the Insolvency and Bankruptcy Code 2016 within 15 days from the expiry of the said timeline.

Management based on internal assessment/legal advice believes that the aforementioned petitions will be decided in its favor and hence cancellation of coal mine will not impact the operations of the power project and it is also confident of receiving approval from the lenders for resolution plan and also implementing the same within the specified timelines. Accordingly, management is of the view that no provision is required to be made to assets with carrying value of Rs. 417,818 .

c) The Honâble Supreme Court of India has deallocated coal mine allocated to GVK Coal (Tokisud) Company Private Limited (âGVKCTPLâ), subsidiary company of Companyâs jointly controlled entity, and Nominated Authority had offered compensation of Rs. 11,129 as against carrying value of assets of Rs. 31,113 as at March 31, 2018. GVKCTPL had appealed against the said order in the Honâble High Court of Delhi. The aforesaid court vide its order dated March 09, 2017, directed GVKCTPL to submit its claim to the adjudicating authority constituted under the Coal Mines (Special Provisions) Act, 2015 and subsequently GVKCTPL submitted its claim for the balance compensation claim of Rs. 19,882 to the aforesaid authority. Management believes that GVKCTPL will be appropriately reimbursed for cancelled coal mine and accordingly no provision is required to be made to the carrying value of assets.

d) Trade receivable of GVKIL, include accruals towards reimbursement of fixed charges for the financial year 1997-1998 to 2000-2001, on increased capital cost worked out as per ratios set out in the Power purchase agreement aggregating to Rs. 3,597 (March 31, 2017: Rs. 3,212) by GVKIL, disincentive recoverable aggregating to Rs. 2,409 (March 31, 2017: Rs. 2,151), minimum alternate tax under the provisions of Income Tax Act, 1961 for the period commencing from the financial year 20002001 up to the financial year 2010-2011, aggregating to Rs. 3,119 (March 31, 2017: Rs. 2,945 ) and other receivables of Rs. 60 (March 31, 2017: Rs.54) which are being refuted by AP Transco/subject to approvals.

The company based on the above assessments believes that it is appropriate to recognize investments and loans and advances given to GVK Energy Limited aggregating to Rs. 1 12,643 in financial statements at carrying value and no provision for diminution for such investments and loans is necessary and also no provision is required for corporate guarantees given by the company amounting to Rs. 10,298 as at March 31, 2018.

15. As at March 31, 2018, the Group/Company had accumulated losses and the Company has incurred losses during the preceding years. The Company/group has delayed payment of loans and interest and certain loan accounts have been classified as non-performing by banks. The Company has provided guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 43 and 44 (referring to notes on GVK Coal Developers (Singapore) Pte Limited and GVK Energy Limited), uncertainties are being faced by various projects such as delays in development of coal mines in an overseas project where the Company has provided guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, re-negotiation of terms of PPA of coal based plant and litigations on determination of tariff of hydro power project. These factors may indicate significant doubt on going concern. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as management believes that the Company would be able to ultimately establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required despite current macro-economic environment challenges. Also the Companyâs subsidiaries i.e. Mumbai International Airport Private Limited and GVK Jaipur Expressway Private Limited are operating satisfactorily. The Company through its group company has also won the bid for Navi Mumbai International airport and is in the process of achieving financial closure.

16. Fair values

The management assessed that loans given, trade receivables, cash and cash equivalents, other financial assets, short term borrowings, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities or interest bearing nature of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Set out below, is a comparison by class of the carrying amounts and fair value of the Groupâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

Level 1: Level 1 hierarchy includes financial instruments measuring using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing net asset value.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares, contingent consideration and indemnification asset included in level 3.

b) Valuation technique used to determine fair value

Specific valuation technique used to value financial instruments include:

- The fair value of investment in mutual funds is measured at quoted price or NAV.

- The fair values for non-current investments, other non-current financial assets and borrowings are based on discounted cash flows using a borrowing rate at the date of transition. They are classified as level 3 fair values in their fair value hierarchy due to the use of unobservable inputs, including own credit risk.

17. The financial statements contain certain amounts reported as â0â which are less than Rs. 1.

Mar 31, 2017

1 Corporate information

The financial statements were authorised for issue in accordance with a resolution of the directors on May 24, 2017.

2. Statement of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.

For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âââIndian GAAPââ or âââPrevious GAAPââ). These financial statements for the year ended March 31, 2017 are the first the Company has prepared in accordance with Ind AS. Refer to note 33 for information on how the Company adopted Ind AS. The financial statements have been prepared on a historical cost convention and on an accrual basis except for certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments) The financial statements are presented in INR and all values are rounded to the nearest rupees lakhs, except when otherwise indicated.

a. Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) Term loan aggregating to Rs. 13,805 is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited out which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 14.33% per annum. The loan is repayable in twenty four unequal monthly instalments after a moratorium of twelve months from the date of first drawdown viz. April 30, 2016 (Refer note 32).

b) Term loan aggregating to Rs. 14,956 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and carries an effective interest of 13.27% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. August 27, 2015 (Refer note 32).

Term loan aggregating to Rs. Nil (March 31, 2016: Rs. Nil, April 01, 2015: Rs. 42,880) carried an interest of 11.50% per annum and was secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited (âGVKADLâ) and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited (âGVKAHPLâ) and Bangalore Airport & Infrastructure Developer Private Limited (âBAIDPLâ); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

3. Taxes

a. Income tax expense:

The major components of income tax expenses for the year ended March 31, 2017 and for the year ended March 31, 2016 are as follows:

b. Reconciliation of effective tax rate

4. Earning per equity share

Basic and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. There are no potentially dilutive equity shares in the Company.

The following reflects the income and share data used in the basic and diluted EPS computations:

5. Commitments and Contingencies

A. Leases

a. Operating lease commitments - Company as lessee

The Company has not recognised any contingent rent as expense in the Statement of Profit and Loss.

B. Capital and other commitments

ii) Other Commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 114,910 (March 31, 2016: Rs. 133,802; April 01, 2015: Rs. 146,614)

b) The company has given undertaking to infuse equity aggregating to Rs. 383,576 (March 31, 2016: Rs. 392,416; April 01, 2015: Rs. 333,258) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 155,587,500 (March 31, 2016: 81,148,236; April 01, 2015: 81,148,236), 22,495,000 ( March 31, 2016: 22,495,000; April 01, 2015: 22,495,000) and 48,000,000 (March 31, 2016: 48,000,000; April 01, 2015: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

The Company based on legal advice believes that the put option with guaranteed return is not enforceable/subject to the regulations of Reserve Bank of India and hence no liability towards the same has been accounted in the financial statements.

C. Contingent liabilities

Direct and indirect taxes

(i) Income tax demand for assessment year 2008-09 for Rs. Nil (March 31, 2016: Rs. 73; April 01, 2015: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31, 2016: Rs. 10; April 01, 2015: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2016: Rs. 279; April 01, 2015: Rs. 279), for assessment year 2011-12 for Rs. 11 (March 31, 2016: Rs. 11; April 01, 2015 : Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2016: Rs. 44; April 01, 2015: Rs. 44).

ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court. Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Companyâs favour.

Security against loan taken by others

i) The Company had provided security by way of pledge of 251,999,900 (March 31, 2016: 183,000,000; April 01, 2015: 183,000,000) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2016: 230,960,770; April 01, 2015: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid jointly controlled entity.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 162,538 (March 31, 2016: Rs. 254,295; April 01, 2015: Rs. 227,919) to subsidiaries and Rs. 1,441 to an associate (March 31, 2016: Rs. 1,441; April 01, 2015: Rs. 1,441) for various fund and nonfund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. Nil (March 31, 2016: Rs. 2,006; April 01, 2015: Rs. 3,941) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 368,534 (March 31, 2016: Rs. 377,027; April 01, 2015: Rs. 320,189) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

6. Employee benefits

A) Defined contribution plan

B) Disclosures related to defined benefit plan

2. The expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

3. The Company expects to contribute Rs. 1 to gratuity in the next year (March 31, 2016: Rs. 1)

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defi ned under the provisions of âMicro, small and medium enterprises Act, 2006â is based on Managementâs knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2017, March 31, 2016 or April 01, 2015.

8. In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the Investor Education and Protection Fund as at March 31, 2017; March 31, 2016 (April 01, 2015: Rs. Nil)

9. Related Parties

(a) Related parties where control exists

GVK Jaipur Expressway Private Limited GVK Airport Developers Limited (GVKADL)

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Airport Holdings Private Limited (GVKAHPL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited

Mumbai International Airport Private Limited

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Airport Services Private Limited

Sutara Roads & Infra Limited

GVK Shivpuri Dewas Expressway Private Limited

(b) Related parties where joint control exists

GVK Energy Limited

GVK Industries Limited

Alaknanda Hydro Power Company Limited

GVK Power (Goindwal Sahib) Limited

GVK Gautami Power Limited

(c) Associates

Seregraha Mines Limited Bangalore International Airport Limited

(d) Key management personnel

Dr. GVK Reddy - Chairman and Managing director

Mr. G V Sanjay Reddy - Director

Mr A Issac George - Director

Mr Krishna Ram Bhupal - Director

Mr S Balasubramanian - Director

Mr S Anwar - Director

Mr Santha K John - Director

Mr K Balarama Reddi - Director

Mr CH G Krishna Murthy - Director

(e) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Employee Welfare Trust

GVK Projects and Technical Services Limited

GVK Coal Developers (Singapore) Pte Ltd

10. Details of loan given to subsidiaries, associates, parties in which directors are interested:

Subsidiaries and joint ventures

i) GVK Oil & Gas Limited

Balance as at March 31, 2017 Rs. 3 (March 31, 2016 Rs. Nil, April 01, 2015 Rs. 10,156)

Maximum amount outstanding during the year was Rs. 3 (March 31, 2016 Rs. 10,156, April 01, 2015 Rs. 17,746)

The aforesaid loan is repayable at the option of subsidiary.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2017 Rs. 4,251 (March 31, 2016 Rs. 6,732, April 01, 2015 Rs. 6,719)

Maximum amount outstanding during the year was Rs. 6,751 (March 31, 2016 Rs. 6,732, April 01, 2015 Rs. 6,719)

The aforesaid loan is repayable at the option of subsidiary.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. 4,771; April 01, 2015 Rs. 4,767) aximum amount outstanding during the year was Rs. 4,847 (March 31, 2016 Rs. 4,771; April 01, 2015 Rs. 4,767)

Loan of Rs. 4,847 given to Goriganga Hydro Power Private Limited has been written off in the current year.

The aforesaid loan was repayable at the option of subsidiary.

iv) GVK Airport Developers Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. 28,493; April 01, 2015 Rs. 76,242)

Maximum amount outstanding during the year was Rs. 29,149 (March 31, 2016 Rs. 76,242; April 01, 2015 Rs. 84,162) The aforesaid loan was repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2017 Rs. 49 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 4,033)

Maximum amount outstanding during the year was Rs. 5,684 (March 31, 2016 Rs. 4,033; April 01, 2015 Rs. 5,583)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2017 Rs. 805 (March 31, 2016 Rs. 5,306; April 01, 2015 Rs. 0)

Maximum amount outstanding during the year was Rs. 15,162 (March 31, 2016 Rs. 6,928; April 01, 2015 Rs. 21,249 The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 1 )

Maximum amount outstanding during the year was Rs. 1 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 1)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. 2)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2017 Rs. 22 (March 31, 2016 Rs. 22; April 01, 2015 Rs. 16)

Maximum amount outstanding during the year was Rs. 22 (March 31, 2016 Rs. 22; April 01, 2015 Rs. 156)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2016 Rs. 0; April 01, 2015 Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2017 Rs. 2,282 (March 31, 2016 Rs. 40; April 01, 2015 Rs. 80)

Maximum amount outstanding during the year was Rs. 2,282 (March 31, 2016 Rs. 217; April 01, 2015 Rs. 127) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2017 Rs. Nil (March 31, 2016 Rs. Nil; April 01, 2015 Rs. 3)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2016 Rs. 3; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2017 Rs. 5 (March 31, 2016 Rs. 4; April 01, 2015 Rs.3)

Maximum amount outstanding during the year was Rs. 5 (March 31, 2016 Rs. 4; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2017 Rs. 82 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 3)

Maximum amount outstanding during the year was Rs. 104 (March 31, 2016 Rs. 4; April 01, 2015 Rs. 3)

The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31, 2017 Rs. 4 (March 31, 2016 Rs. 1; April 01, 2015 Rs. 8)

Maximum amount outstanding during the year was Rs. 5 (March 31, 2016 Rs. 8; April 01, 2015 Rs. 8)

The aforesaid loan is repayable on demand.

xvi) GVK Industries Limited

Balance as at March 31, 2017 Rs. 137 (March 31, 2016 Rs. 141; April 01, 2015 Rs.135)

Maximum amount outstanding during the year was Rs. 143 (March 31, 2016 Rs. 141; April 01, 2015 Rs. 593) The aforesaid loan is repayable on demand.

xvii) GVK Deoli Kota Expressway Private Limited

Balance as at March 31, 2017 Rs. 2 (March 31, 2016 Rs. Nil; April 01, 2015 Rs.Nil)

Maximum amount outstanding during the year was Rs. 2 (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

The aforesaid loan is repayable on demand.

xviii) GVK Airport Services Private Limited

Balance as at March 31, 2017 Rs. 0 (March 31, 2016 Rs. Nil; April 01, 2015 Rs.Nil)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2016 Rs. Nil; April 01, 2015 Rs. Nil)

The aforesaid loan is repayable on demand.

11. Details of trade receivables due from private companies in which Companyâs director is a director.

Mumbai International Airport Private Limited Rs. 223 (March 31, 2016 Rs. 129; April 01, 2015: Rs. 22)

12. First time adoption to Ind-AS

A. Reconciliation of equity as previously reported under Previous GAAP and that computed under Ind AS

B. Reconciliation between net loss as previously reported under Previous GAAP and Ind AS for the year ended 31 March 2016

C. Notes to reconciliation of equity as at April 01, 2015 and March 31, 2016 and net loss for the year ended March 31, 2016.

(i) Fair Value gain/loss on current investment

Under Indian GAAP, investments in mutual funds are accounted for as short-term investments and accordingly they are carried at lower of cost and fair value. Under Ind AS, the Company has designated such investments as FVTPL investments. Ind AS requires FVTPL investments to be measured at fair value.

(ii) Fair value loss on investment

The Company had made certain investments in certain non cumulative redeemable preference shares including share application money in coal project with the object of obtaining coal at discounted price. Under Indian GAAP the same have been carried at cost. Under Ind AS the same are carried at amortised cost and the fair value loss on initial recognition has been taken to opening reatined earnings or the statement of profit and loss, as the case may be, as the coal project is facing certain difficulties.

(iii) Financial guarantee income/(expense) including exchange difference and unwinding income on financial assets

a) Financial guarantees where guarantee commission is charged

Under Indian GAAP, the Company has recognised Guarantee Commission on loan balance. However, under IND-AS, the Company has present valued the guarantee commission receivable through the tenor of the loan and recognised a receivable (financial asset) and unearned guarantee commission income (financial liabiltiy). The unearned guarantee commission income is taken to income on straight line basis and interest income is recognised on financial asset through the tenor of the loan.

b) Financial guarantees where guarantee commission is not charged

Under Indian GAAP, the Company has not accounted for financial guarantee where commission is not charged. However, under IND-AS, the Company has present valued the guarantee commission receivable through the tenor of the loan and recognised the same as investment in the entity and unearned guarantee commission income (financial liabiltiy). The unearned guarantee commission income is taken to income on straight line basis through the tenor of the loan.

c) Unwinding income on financial assets

Under Previous GAAP, investment in compulsorily redeemable preference shares in GVK Airport Developers Limited (âGVKADLâ) were carried at cost. Under Ind AS, the same needs to be accounted as financial asset as these instruments are compulsorily redeemable in cash. Preference shares are re-payable after a period of ten years with an option of an early redemption any time after one year from the date of allotment or such period as may be mutually agreed by giving a monthâs notice. The Company expects GVKADL to repay the same by March 31, 2021. Accordingly, discounted value of redeemable preference shares issued by GVKADL has been carried at amortised cost and fair value loss on initial recognition has been recognised as equity and subequently interest income on the aforesaid financial asset and financial asset mentionted in (ii) above has been recognised in the statement of profit and loss.

13. Capital management

The Company has delayed repayment of dues to banks during the year. The following is the summary of delays:

14. First time adoption of Ind AS

âThese financial statements for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âââIndian GAAPââ or âââPrevious GAAPââ).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 1, 2015, the Companyâs date of transition to Ind AS. Note 31 explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2015 and the financial statements as at and for the year ended March 31, 2016.â

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) The Company has elected to regard carrying values for all of property, plant and equipment as deemed cost at the date of the transition.

b) Ind AS 101 requires a first-time adopter to apply derecognition requirements in Ind AS 109 prospectively to transactions occurring on or after the date of transition to Ind AS. Accordingly, the Company continues to de-recognise the financial assets and financial liabilities for transactions which have occured before the date of transition to Ind AS.

c) âIn the preparation of separate financial statements, Ind AS 27 Separate Financial Statements requires an entity to account for its investments in subsidiaries, jointly controlled entities and associates either:

a) At cost, or

b) In accordance with Ind AS 109.

If a first-time adopter measures such an investment at cost, it can measure that investment at one of the following amounts in its separate opening Ind AS balance sheet:

- Cost determined in accordance with Ind AS 27

- Deemed cost, defined as

- Fair value determined in accordance with Ind AS 113 at the date of transition to Ind AS, or

- Previous GAAP carrying amount at the transition date.

A first-time adopter may choose to use either of these bases to measure investment in each subsidiary, joint venture or associate where it elects to use a deemed cost. Accordingly, the Company has opted to carry the investment in subsidiaries and joint venture at cost as at the date of transition.â

d) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

Estimates

The estimates as at April 01, 2015 and March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2015 (transition date) and as of March 31, 2016.

15. Significant accounting judgements, estimates and assumptions

A) Judgements

Lease commitments - the Company as lessee

The Company has entered into lease for office premises. The Company has determined, based on an evaluation of the terms and condition of the arrangements, such as the lease term not constituting a major part of the economic life of the office premises and the fair value of the asset, that it does not retain significant risk and rewards of the office premise and accounts for the contracts as operating lease.

B) Estimates and assumptions

(i) Taxes

(ii) Defined employee benefit plans (Gratuity)

(iii) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 8E for further disclosures.

(iv) Depreciation on property, plant and equipment

16. Financial risk management objectives and policies

Financial Risk Management Framework

A) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and other financial assets. Trade receivables, Financial guaranatee receivables (Other financial assets) and Loans given by the Company result in material concentration of credit risk as these are with related parties.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 10,275, Rs. 62,920 and Rs. 108,883 as of March 31, 2017, March 31, 2016 and April 1, 2015 respectively, being the total of the carrying amount of balances with trade receivables, Loans and Other financial assets.

Trade receivables, Other financial assets, Loans given:

An impairment analysis is performed at each reporting date. The Company does not hold collateral as security. Impairment analysis takes into account historical credit loss experience and adjusted for forward-looking information. Significant portion of trade receivables, other financial assets and loans given comprise of related parties and not subject to significant credit risk based on past history.

B) Liquidity Risk

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.

C) Market Risk

Interest rate risk

As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings. With all other variables held constant, the Companyâs profit before tax is affected through impact on floating rate borrowings, as follows:

Foreign Currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs investment in foreign entity and financial asset/liability in relation to foreign entity in respect of financial guarantee. The risks primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company is intending to enter into derivative instruments primarily to hedge foreign exchange. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. The Company has not entered into derivative instruments during the year.

The period/ year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

Foreign currency sensitivity

The following tables demonstrate the senstivity to a reasonably possible change in USD exchange rate, with other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.

17. Segment reporting

18. The Honâble Supreme Court of India has de-allocated coal mine allocated to GVK Coal (Tokisud) Private Limited, subsidiary company of a Jointly controlled entity, and Nominated Authority has offered compensation of Rs. 11,129 as against carrying value of assets of Rs. 31,115 (March 31, 2016: Rs. 34,668). GVK Coal (Tokisud) Private Limited has received order from Honâble High Court dated March 09, 2017, based on which it has resubmitted its claim for the balance compensation claim. The Management believes that GVK Coal (Tokisud) Private Limited will be appropriately reimbursed for cancelled coal mine and accordingly the cancellation of coal mine will not have any material impact upon the financial statements.

19. The Company has made investments and has receivables aggregating to Rs. 51,815 (March 31, 2016: Rs. 20,157) and provided guarantees and commitments for loans amounting to Rs. 752,1 10 (March 31, 2016: Rs. 769,444) taken by GVK Coal Developers (Singapore) Pte. Limited (GVK Coal), an investee company, as at March 31, 2017, and has undertaken to provide financial assistance of USD 46 million (Rs.31,104) as at June 30, 2016, an entity whose current liabilities exceeds current assets by USD 2,119 million (Rs. 1,432,932) as at June 30, 2016 and has incurred losses of USD 122 million (Rs. 83,017) for the year ended June 30, 2016, based on the unaudited financial statements is witnessing material uncertainties. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had abridgement option on the loans either on October 2015 or every year thereafter. The lenders have not yet exercised the option for repayment of the loan. GVK coal is in discussion with non- controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution. Management believes that while the prices of coal have fallen, the fall in prices of other commodities and services would offset the impact of fall in coal prices on the project by reducing capital and operating cost requirements and hence, GVK Coal would be able to establish profitable operations, meet its obligations and its current liabilities being in excess of current assets is temporary in nature and will not impact ability of the GVK Coal to continue in operation in foreseeable future. The management further believes that the aforesaid will not have any material adverse impact upon cash flows of the Company and accordingly no adjustment is required to receivables, investments, guarantees and commitments.

20. Uncertainties faced by GVK Energy Limited and its group companies (Jointly controlled entity and its group companies)

a) There has been uncertainty regarding supplies/availability of gas to power generating plants and power projects under construction of the Group. Further, these group companies engaged in this business have made losses of Rs. 26,729 (March 31, 2016: Rs.26,158). Further, certain banks have classified loan balances of these group companies as nonperforming assets. These group companies are in the process of restructuring the loans. The Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes that these group companies will continue to be in operation in foreseeable future despite continued losses.

b) Uncertainty is faced by coal plant with carrying value of non-current assets of Rs. 444,129 (March 31, 2016: Rs.463,295) of one of the group companies, towards supply of fuel. Management has obtained coal linkage for six months, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. PSERC in its interim order has allowed the group company to run the plant on imported fuel for upto two and half years within which the group company should make arrangements for coal on long term basis. Management based on internal assessment/legal advice believes that cancellation of coal mine will not impact the operations of the power project.

c) One of the subsidiaries of GVKEL, has completed construction of 330MW hydro power project with a carrying value of Rs.506,768 as at March 31, 2017 (March 31, 2016: Rs. 529,882). The said Company has filed petitions with Uttar Pradesh Electricity Regulatory Commission (âUPERCâ) for extension of scheduled commercial operation date (âSCODâ) and approval of additional capital cost to be considered for tariff determination. In the interim UPERC has provisionally determined tariff for the financial year 2015-16 and 2016-17 subject to the aforesaid petitions. The said Company had also filed a review petition with UPERC for revising the provisional tariff since it believes that certain components of the provisional tariff were not determined in accordance with the tariff regulations. UPERC in response to the review petition has stated that it will consider certain objections raised by the said Company during determination of final tariff. Pending determination of final tariff subsidiary has recorded revenue based on the provisional tariff approved by UPERC. Management based on its internal assessment/legal advice is confident that the aforementioned petitions will be decided in its favour.

The Company accordingly believes that investments in the jointly controlled entity amounting to Rs. 108,323 is recoverable in normal course of business and no provision for diminution is necessary.

21. As at March 31, 2017, the Company had accumulated losses and the Company has incurred losses during the preceding two years and the current year. The Company has delayed payment of loans and interest and certain loan accounts have been classified as nonperforming by banks. The Company has provided securities, guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 25(B)(ii), 25(C), 37, 38 and 39 uncertainties are being faced by various projects in the Group such as delays in development of coal mines in an overseas project where the Company has provided securities, guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, cancellation of coal linkage to coal based plant and re-negotiation of terms of PPA of coal based plant. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as Management believes that the Company would be able to establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required and despite current macroeconomic environment challenges would establish profitable operations.

22. During the earlier year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defense clearance issues. While the Management continues to pursue with Ministry for reimbursement of costs, the Company had written off investments and advances made to subsidiary aggregating to Rs. Nil (March 31, 2016: Rs. 10,161).

23. On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which had purchased own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. In the current year, the trust has disposed off the shares held in the Company.

24. Fair values

25. Standards issued but not yet effective

In March 2017, the ministry of corporate affairs issued the Companies (Indian Accounting Standards )(Amendments) Rules, 2017, notifying amendment to Ind AS 102, âShare-based payment.â and Ind AS 7 âStatement of Cash Flowâ. This amendment is in accordance with the recent amendment made by International Accounting Standards Board (IASB) to IAS 7. The Amendments is applicable to the Group from April 1, 2017.

Amendment to Ind AS 102

The amendment to Ind AS 102 provides specific guidance to measurement of cash settled awards, modification of cash settled awards that include a net settlement feature in respect of withholding taxes.

The aforesaid amendment is not applicable to the Company.

Amendment to Ind AS 7

The Amendment to IND AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company has evaluated the disclosure requirement of the amendment and the effect on the financial statements is not expected to be material. These amendments does not have any recognition or measurement impact but requires additional disclosure to be given by the Company.

26. The financial statements contain certain amounts reported as â0âwhich are less than Rs. 1.

As per our report of even date.

Mar 31, 2016

b) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) Term loan aggregating to Rs. 20,500 is secured by first pari-passu charge on the current assets, present and future of the Company and pledge of 299,000 preference shares of GVK Airport Developers Limited, out of which 239,800 preference shares are held by Sutara Roads & Infra Limited. The loan is further secured by subservient mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 13.40% per annum. The loan is repayable in twenty four unequal monthly installments after a moratorium of twelve months i.e. from April 30, 2016.

b) Term loan aggregating to Rs. 14,956 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 15.15% per annum. The loan is repayable after a period of 35 months from the date of first drawdown i.e. repayable on August 27, 2015.

Term loan aggregating to Rs. Nil (March 31, 2015: Rs. 42,880) carried an interest of 11.50% per annum and was secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited (âGVKADLâ) and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited (âGVKAHPLâ) and Bangalore Airport & Infrastructure Developer Private Limited (âBAIDPLâ); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

c) * Pledge of 81,148,236 (March 31, 2015: 81,148,236) shares of GVK Energy Limited, 22,495,000 (March 31, 2015: 22,495,000) shares of GVK Transportation Private Limited and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Airport Developers Limited

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

Note: a) Previous year figures are in parenthesis except for receivable/(payable) at year end -

b) Refer note 26 for equity commitments.

d) Refer note 5 (a) (b) and 7 for security provided by subsidiaries for loans availed by the Company.

e) The advances/loans and guarantees have been provided to meet normal business needs of respective entity.

f) ** 78,204,963 0.001% compulsory Convertible Debentures of Rs. 100 each were converted into 307,869,478 fully paid-up equity shares.

g) *** 239,800 preference shares of GVK Airport Developers Limited held by Sutara Roads & Infra Limited have been pledged for loans taken by the Company.

1. Details of loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. 10,156)

Maximum amount outstanding during the year was Rs. 10,156 (March 31, 2015: Rs. 17,746)

The aforesaid loan was repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2016 Rs. 6,732 (March 31, 2015: Rs. 6,719)

Maximum amount outstanding during the year was Rs. 6,732 (March 31, 2015:Rs. 6,719)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2016 Rs. 4,771 (March 31, 2015: Rs. 4,767)

Maximum amount outstanding during the year was Rs. 4,771 (March 31, 2015: Rs. 4,767)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Limited

Balance as at March 31, 2016 Rs. 28,493 (March 31, 2015: Rs. 76,242)

Maximum amount outstanding during the year was Rs. 76,242 (March 31, 2015: Rs. 84,162)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2016 Rs. 0 (March 31, 2015: Rs. 4,033)

Maximum amount outstanding during the year was Rs. 4,033 (March 31, 2015: Rs. 5,583)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2016 Rs. 5,306 (March 31, 2015: Rs. 0)

Maximum amount outstanding during the year was Rs. 6,928 (March 31, 2015: Rs. 21,249)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 1)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2015: Rs. 1)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2015: Rs. 2)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2016 Rs. 22 (March 31, 2015: Rs. 16)

Maximum amount outstanding during the year was Rs. 22 (March 31, 2015: Rs. 156)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2016 Rs. 0 (March 31, 2015: Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2015: Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2016 Rs. 40 (March 31, 2015: Rs. 80)

Maximum amount outstanding during the year was Rs. 217 (March 31, 2015: Rs. 127)

The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited

Balance as at March 31, 2016 Rs. Nil (March 31, 2015: Rs. 3)

Maximum amount outstanding during the year was Rs. 3 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2016 Rs. 4 (March 31, 2015: Rs.3)

Maximum amount outstanding during the year was Rs. 4 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 3)

Maximum amount outstanding during the year was Rs. 4 (March 31, 2015: Rs. 3)

The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31, 2016 Rs. 1 (March 31, 2015: Rs. 8)

Maximum amount outstanding during the year was Rs. 8 (March 31, 2015: Rs. 8)

The aforesaid loan is repayable on demand.

xvi) GVK Industries Limited

Balance as at March 31, 2016 Rs. 141 (March 31, 2015: Rs.135)

Maximum amount outstanding during the year was Rs. 141 (March 31, 2015: Rs. 593)

The aforesaid loan is repayable on demand.

2.. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2015: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31, 2015: Rs. 10), for assessment year 2010-11 for Rs. 279 (March 31, 2015: 279), for assessment year 2011-12 for Rs. 11 (March 31, 2015: Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31, 2015: Rs. 44).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 183,000,000 (March 31, 2015: 183,000,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 230,960,770 (March 31, 2015: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 254,295 (March 31, 2015: Rs. 227,919) to subsidiaries and Rs. 1,441 to an associate (March 31, 2015: Rs. 1,441) for various fund and nonfund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 2,006 (March 31, 2015: Rs. 3,941) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 377,027 (March 31, 2015: Rs. 320,189) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

3. Capital and other commitments

z) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 133,802 (March 31, 2015: Rs. 146,614).

(b) The company has given undertaking to infuse equity aggregating to Rs. 392,416 (March 31, 2015: Rs. 333,258) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2015: 81,148,236), 22,495,000 (March 31, 2015: 22,495,000) and 48,000,000 (March 31, 2015: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (âinvestors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited''s equity shares (âQualified IPO'' or âQIPO'') within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (âPut Rightâ) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (âPut IRRâ) and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement.

The Company believes that the subsidiary company would be able to successfully conduct QIPO in the preferred listing period or successfully complete offer for sale or demerger. The Company further believes that return guaranteed would be subjected to regulations of Reserve Bank of India.

4. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of âMicro, small and medium enterprises Act, 2006â is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2016 or March 31, 2015.

5. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

6. The Honourable Supreme Court vide its decision of September 24, 2014 held that allotment of various coal blocks including those allotted to GVK Coal (Tokisud) Company Private Limited, subsidiary of GVK Energy Limited is arbitrary and illegal and has 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 Honourable Supreme Court''s judgment. The subsidiary company has filed writ petition before the Hon''ble High Court of Delhi impugning the decision of the Nominated Authority, Ministry of Coal which quantified the compensation payable to the subsidiary company for taking over the Tokisud Coal Block as Rs. 11,129 against the carrying value of assets of Rs. 34,862 in the books of subsidiary company. The Management believes that the subsidiary will be appropriately reimbursed for cancelled coal mine and accordingly the cancellation of coal mine will not have any material impact upon the financial statements.

7. The Company has made investments aggregating to Rs. 39,071 (March 31, 2015: Rs. 34,886) by way of advances, subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 769,444 to lenders of GVK Coal Developers (Singapore) Pte Limited (GVK Coal) against its borrowings, an entity in which Company owns 10%. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 900 million (March 31, 2015: USD 885 million) i.e. Rs. 574,160 (March 31, 2015: Rs. 553,929) (includes USD 758 million due to non-controlling shareholder who has extended time for repayment from time to time, the most recent extension until July 15, 2016), based on unaudited financial statements for the year ended June 30, 2015. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreements for port and rail development and agreement for sale of coal. Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had abridgement option on the loans either on October 2015 or every year thereafter.

8. The Company had applied to Central government on May 13, 2013 for waiver of excess managerial remuneration amounting to Rs. 21 for the year ended March 31, 2013 paid to a director in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes approval will be obtained in due course and would not have any material impact upon the financial statements.

9. Uncertainties faced by GVK Energy Limited

a The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively âsubsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,651 (March 31, 2015: Rs. 15,655). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 183,249 (March 31, 2015: Rs. 196,252) have during the current financial year achieved 6% PLF (March 31, 2015: Nil) and 2.6% PLF (March 31, 2015: Nil) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 4,751 (March 31, 2015: Rs. 6,916) and Rs. 21,968 (March 31, 2015: Rs. 20,474) respectively. Further, certain banks have classified loan balances of GVKIL as non-performing asset. Further, the Company is confident that Government of India will continue to take necessary steps/initiatives to improve the situation of natural gas for e.g. scheme envisaging supplying of domestic gas to gas based upto the target plant load factor (âPLF''), selected through a reverse e-bidding process and also intervention/sacrifices to be collectively made by all stakeholders. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses.

b. GVK Goindwal (Sahib) Limited, subsidiary company of GVK Energy Limited has subsequent to year completed construction of its 540 MW power project with carrying value of Rs. 466,972 and has completed commercial test but not declared availability in the absence of coal. In the wake of cancellation of coal mine as referred in note 36, Management has obtained coal linkage for six months, taken opinion for running plant on imported coal, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission (PSERC) for re-negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. PSERC in its interim order has allowed the subsidiary company to run the plant on imported fuel for upto two and half years within which the Company should make arrangements for coal on long term basis. Management based on internal assessment/ legal advice believes that cancellation of coal mine will not impact the operations of the power project.

The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 is recoverable in normal course of business and no provision for diminution is necessary.

10. As at March 31, 2016, the Company has accumulated losses of Rs.9,953 and the Company has incurred losses of Rs. 12,961 and Rs. 12,983 in the current and previous year respectively. The Company has delayed payment of loans and interest and certain loan accounts have been classified as nonperforming by banks. Further, as discussed in notes 25b, and 26, the Company has provided guarantees and commitments on behalf of various entities and as further detailed in notes 31, 32 and 34 uncertainties are being faced by various projects in the Group such as delays in development of coal mines in an overseas project where Company has provided guarantees and commitments for the borrowings, losses incurred by gas based plants in the absence of gas and litigations on rights to claim capacity charge, cancellation of coal linkage to coal based plant and re-negotiation of terms of PPA of coal based plant. Notwithstanding the above, the financial statements of the Company have been prepared on going concern basis as Management believes that the Company would be able to establish profitable operations, meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; obtain approvals of regulators; will reach an optimal solution with non-controlling shareholders and lenders; obtain requisite gas/coal allocation etc. as required and despite current macro- economic environment challenges would establish profitable operations.

11. During the earlier year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defense clearance issues. While the Management continues to pursue with Ministry for reimbursement of costs, the Company has written off investments and advances made to subsidiary aggregating to Rs. 10,161 (March 31, 2015: Rs. 7,590).

12. On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

13. The financial statements contain certain amounts reported as â0âwhich are less than Rs. 1.

14. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2015

A) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. Term loan aggregating to Rs. 16,667 is secured by first pari-passu charge on the current assets, present and future of the Company, second pari-passu charge on the current assets and fixed assets of GVK Industries Limited and pledge of 10% shares of GVK Industries Limited and presently carries interest of 13.15% per annum. The loan is repayable in six equal quarterly installments after a moratorium of eighteen months from the date of first drawdown viz. March 8, 2013.

b. Term loan aggregating to Rs. 14,968 is secured by mortgage of property, admeasuring 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited and presently carries interest of 13.25% per annum. The loan is repayable after a period of 35 months from the date of first drawdown viz. September 27, 2012.

The Company has not made payment of principal dues in certain cases. The details of payments not made are as follows:

Term loan aggregating to Rs. 42,880 currently carries interest of 11.50% per annum and secured by (i) charge on loans and advances of the Company to GVK Airport Developers Limited ("GVKADL") and also loans and advances provided by GVKADL to GVK Airport Holdings Private Limited ("GVKAHPL") and Bangalore Airport & Infrastructure Developer Private Limited ("BAIDPL"); (ii) exclusive charge on shares of GVKADL to the extent of two times of facility amount; (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged would be in proportion to the lenders at GVKADL; (iv) first pari passu charge on Himayatsagar and Paigah House property, Hyderabad; (v) second pari passu charge on land of 2,683.90 acres of land adjoining the NH 46 connecting to Chennai to Perambalur belonging to GVK Perambalur SEZ Private Limited; (vii) proportionate proceeds of liquidity event at GVKADL, GVK AHPL and BAIDPL and (viii) charge on shares of GVKADL, GVK AHPL and BAIDPL along with HDFC and SREI or any other future lender representing at least 61% of the paid up share capital of the Company.

2. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

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

3. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited GVK Airport Developers Limited (GVKADL)

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited (GVKAHPL)

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited (BAIADPL)

Mumbai International Airport Private Limited GVK Power (Khadur Sahib)

Private Limited GVK Airports International Pte Ltd GVK Airport Services

Private Limited GVK Shivpuri Dewas Expressway Private Limited

b) Associates :

Bangalore International Airport Limited

Seregraha Mines Limited

(c) Key management personnel

Dr. GVK Reddy - Chairman and Managing director

Mr. G V Sanjay Reddy - Director

Mr A Issac George - Director

Mr Krishna Ram Bhupal - Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

4. Details of loan given to subsidiaries, associates, parties in which directors are interested

Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31,2015 Rs. 10,156 (March 31,2014: Rs. 17,740) Maximum amount outstanding during the year was Rs. 17,746 (March 31,2014: Rs. 17,740) The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31,2015 Rs. 6,719 (March 31,2014: Rs. 6,710) Maximum amount outstanding during the year was Rs. 6,719 (March 31,2014:Rs. 6,710) The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

BBalance as at March 31,2015 Rs. 4,767 (March 31,2014: Rs. 4,759) Maximum amount outstanding during the year was Rs. 4,767 (March 31,2014: Rs. 4,759) The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Limited

Balance as at March 31,2015 Rs. 76,242 (March 31,2014: Rs. 51,802) Maximum amount outstanding during the year was Rs. 84,162 (March 31,2014: Rs. 58,302) The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31,2015 Rs. 4,033 (March 31,2014: Rs. 5,579) Maximum amount outstanding during the year was Rs. 5,583 (March 31,2014: Rs. 17,959) The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31,2015 Rs. 0 (March 31,2014: Rs. 17,089) Maximum amount outstanding during the year was Rs. 21,249 (March 31,2014: Rs. 17,089) The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31,2015 Rs. 1 (March 31,2014: Rs. 0 ) Maximum amount outstanding during the year was Rs. 1 (March 31,2014: Rs. 4,268) The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31,2015 Rs. Nil (March 31,2014: Rs. 2) Maximum amount outstanding during the year was Rs. 2 (March 31,2014: Rs. 2) The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31,2015 Rs. 16 (March 31,2014: Rs. 0) Maximum amount outstanding during the year was Rs. 156 (March 31,2014: Rs. 1,325) The aforesaid loan was repayable on demand.

Notes to financial statements for the year ended March 31, 2015

(All amounts expressed in Indian Rupees Lakhs unless otherwise stated)

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31,2015 Rs. 0 (March 31,2014: Rs. 0) Maximum amount outstanding during the year was Rs. 0 (March 31,2014: Rs. 0) The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31,2015 Rs. 80 (March 31,2014: Rs. 6) Maximum amount outstanding during the year was Rs. 127 (March 31,2014: Rs. 907) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs. 3) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 165) The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs.1) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 1) The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31,2015 Rs. 3 (March 31,2014: Rs. 1) Maximum amount outstanding during the year was Rs. 3 (March 31,2014: Rs. 1) The aforesaid loan is repayable on demand.

xv) Bangalore International Airport Limited

Balance as at March 31,2015 Rs. 8 (March 31,2014: Rs. Nil) Maximum amount outstanding during the year was Rs. 8 (March 31,2014: Rs. Nil) The aforesaid loan is repayable in demand.

xvi) GVK Industries Limited

Balance as at March 31,2015 Rs. 135 (March 31,2014: Rs. Nil) Maximum amount outstanding during the year was Rs. 593 (March 31,2014: Rs. Nil) The aforesaid loan is repayable in demand.

5. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2014: Rs. 73), for assessment year 2009-10 Rs. 10 (March 31,2014: Rs. Nil), for assessment year 2010-11 for Rs. 279 (March 31,2014: 279), for assessment year 2011-12 for Rs. 11 (March 31,2014 : Rs. 11) and for assessment year 2012-13 Rs. 44 (March 31,2014: Rs. Nil).

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company's favour

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 1,83,000,000 (March 31,2014: 170,800,000) shares of GVK Airport Developers Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 87,910,588 (March 31, 2014: 87,910,588) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs 227,919 (March 31,2014: Rs. 212,371) to subsidiaries and Rs. 1,441 to an associate (March 31,2014: Rs. 1,441) for various fund and non- fund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 3,941 (March 31,2014: Rs. 5,635) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 320,189 (March 31, 2014: Rs. 294,489) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

6. Capital and other commitments

(a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 146,614 (March 31,2014: Rs. 161,416).

(b) The company has given undertaking to infuse equity aggregating to Rs. 333,258 (March 31, 2014: Rs. 306,509) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2014: 81,148,236), 22,495,000 (March 31, 2014: 22,495,000) and 48,000,000 (March 31, 2014: 44,800,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors ('investors') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited's equity shares ('Qualified IPO' or 'QIPO') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor's shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management's knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31,2015 or March 31,2014.

8. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

9 . On January 17, 2013 and subsequently from time to time, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market in excess of 10% of total assets of the scheme. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares within five years from October 28, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

10. The Company has made investments aggregating to Rs. 33,318 (March 31, 2014: Rs. 22,202) by way of advances, subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 653,448 to lenders of GVK Coal Singapore Pte Limited (GVK Coal), an entity in which Company owns 10%. GVK Coal has borrowed Rs. 653,448 (March 31,2014: Rs. 600,998) as at March 31,2015 from its lender against the aforesaid guarantees and commitments. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 885 million (Rs. 553,929) based on unaudited financial statements for the year ended June 30, 2014. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. The prices of the coal have significantly fallen since GVK coal had acquired stake in the coal mines. GVK coal is also in discussion with non- controlling shareholders to realign the option exercise dates and additional funding from potential investors.

Management believes that GVK Coal would be able to establish profitable operations, meet it's obligations and it's current liabilities being in excess of current assets is temporary situation and will not impact ability of the company to continue in operation in foreseeable future and accordingly will not have any material adverse impact upon operations and cash flows of the Company.

11. The Company had applied to Central government on May 13, 2013 for waiver of excess managerial remuneration amounting to Rs. 21 for the year ended March 31, 2013 paid to a director in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes approval will be obtained in due course and would not have any material impact upon the financial statements.

12. Uncertainties faced by GVK Energy Limited

a The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively 'subsidiary companies') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,655 (March 31, 2014: Rs. 15,655). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future.

Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 196,252 (March 31,2014: Rs. 209,670) has during the current financial year achieved Nil PLF (March 31, 2014: Nil) and Nil PLF (March 31,2014: Nil) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 6,916 (March 31,2014: Rs. 7,888) and Rs. 20,474 (March 31,2014: Rs. 21,103) respectively. However, GVKIL is in the process of tying up of additional loans and GVKGPL has already obtained moratorium for payments. Further, the Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches to deal with the situation and Management of the Company is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and in view of installing alternate fuel equipment and on the basis of aforesaid discussions believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses.

b. GVK Goindwal (Sahib) Limited, subsidiary company is presently constructing 540 MW power project with carrying value of Rs. 388,986 which was dependent upon GVK coal mine for fuel. In the wake of cancellation of coal mine as referred in note 36, Management has obtained coal linkage for six months, taken opinion for running plant on imported call, tied up for importing coal and is mulling other options such as, obtaining coal linkage locally and has filed petition with Punjab State Electricity Regulatory Commission for re- negotiation of terms of power purchase agreement such as rate revision, approval for using imported coal etc. claiming force majeure and change in law as envisaged under Power Purchase Agreement. Management based on legal advise believes that cancellation of coal mine will not impact the operations of the upcoming power project.

The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

13. During the previous year, Termination Notice was served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary had alleged that it has not been able to effectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defence clearance issues. The Management believes that Ministry will reimburse subsidiary for costs incurred by it and accordingly no adjustment is required to balance carrying value of investments and advances aggregating to Rs. 10,161 (net of written off Rs. 7,590) (March 31,2014: Rs. 17,745) and guarantee aggregating to Rs. Nil (March 31,2014: Rs. 813) issued by the Company for subsidiary.

14. The Honourable Supreme Court vide is decision of September 24, 2014 held that allotment of various coal blocks including those allotted to GVK Coal (Tokisud) Company Private Limited, subsidiary of GVK Energy Limited is arbitrary and illegal and has 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 Honourable Supreme Court's judgment. The subsidiary company has filed writ petition before the Hon'ble High Court of Delhi impugning the decision of the Nominated Authority, Ministry of Coal which quantified the compensation payable to the subsidiary company for taking over the Tokisud Coal Block as Rs. 11,129 against the carrying value of assets of Rs. 35,575 in the books of subsidiary company. The Management believes that the subsidiary will be appropriately reimbursed for cancelled coal mine and accordingly no provision is required to be made to investments, including Compulsory Convertible Debentures, in GVK Energy Limited with carrying value of Rs. 108,323

15. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

16. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year's classification.

Mar 31, 2014

1. Corporate information

GVK Power & Infrastructure Limited (''the Company'' or ''GVKPIL'') provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notifed under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Afairs. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

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

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship: (a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited (BAIADPL)

Mumbai International Airport Private Limited

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Shivpuri Dewas Expressway Private Limited

b) Associates

Bangalore International Airport Limited Seregraha Mines Limited

(c) Key management personnel

Dr. GVK Reddy, Chairman and Managing director Mr. G V Sanjay Reddy, Director Mr A Issac George, Director Mr Krishna Ram Bhupal, Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

24. Details of loan given to subsidiaries, associates, parties in which directors are interested

Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2014 Rs. 17,740 (March 31, 2013: Rs. 17,620)

Maximum amount outstanding during the year was Rs. 17,740 (March 31, 2013: Rs. 17,620)

The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2014 Rs. 6,710 (March 31, 2013: Rs. 6,692)

Maximum amount outstanding during the year was Rs. 6,710 (March 31, 2013:Rs. 6,692)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2014 Rs. 4,759 (March 31, 2013: Rs. 4,751)

Maximum amount outstanding during the year was Rs. 4,759 (March 31, 2012: Rs. 4,751)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2014 Rs. 51,802 (March 31, 2013: Rs. 57,302)

Maximum amount outstanding during the year was Rs. 58,302 (March 31, 2012: Rs. 81,590)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2014 Rs. 5,579 (March 31, 2013: Rs. 15,112)

Maximum amount outstanding during the year was Rs. 17,959 (March 31, 2013: Rs. 15,112)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2014 Rs. 43,070 (March 31, 2013: Rs. 35,782)

Maximum amount outstanding during the year was Rs. 43,070 (March 31, 2013: Rs. 37,191)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. 4,258)

Maximum amount outstanding during the year was Rs. 4,268 (March 31, 2013: Rs. 4,258)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2014 Rs. 2 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 2 (March 31, 2013: Rs. Nil)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1,325 (March 31, 2013: Rs. 971)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2014 Rs. 0 (March 31, 2013: Rs. 0)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2013: Rs. 0)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2014 Rs. 6 (March 31, 2013: Rs. 4)

Maximum amount outstanding during the year was Rs. 907 (March 31, 2013: Rs. 7,502) The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2014 Rs. 3 (March 31, 2013: Rs. 88)

Maximum amount outstanding during the year was Rs. 165 (March 31, 2013: Rs. 119)

The aforesaid loan is repayable on demand.

xiii) GVK Bagodara Vasad Expressway Private Limited

Balance as at March 31, 2014 Rs. 1 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2013: Rs. Nil)

The aforesaid loan is repayable on demand.

xiv) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2014 Rs. 1 (March 31, 2013: Rs. Nil)

Maximum amount outstanding during the year was Rs. 1 (March 31, 2013: Rs. Nil)

The aforesaid loan is repayable on demand.

5. Contingent liabilities

a. Direct and indirect taxes:

(i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2013: Rs. 73), for assessment year 2010-11 for Rs. 279 (March 31, 2013: 871) and for assessment year 2011-12 for Rs. 11 (March 31, 2013 : Rs. Nil)

(ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

(i) The Company had provided security by way of pledge of 170,800,000 (March 31, 2013: 170,800,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

(ii) The Company had provided security by way of pledge of 87,910,588 (March 31, 2013: Nil) shares of GVK Energy Limited for loans taken by the aforesaid subsidiary.

(iii) The Company has provided security by way of corporate guarantees amounting to Rs. 212,371 (March 31, 2013: Rs. 114,322) to subsidiaries and Rs. 1,441 to an associate (March 31, 2013: Rs. 1,441) for various fund and non- fund based facility availed by them.

(iv) The Company has provided security by way of corporate guarantees amounting to Rs. 5,635 (March 31, 2013: Rs. 6,879) for securing loans obtained by GVK Projects and Technical Services Limited.

(v) The Company has provided security by way of guarantee amounting to Rs. 332,601 (March 31, 2013: Rs. 281,432) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

6. Capital and other commitments

(a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 161,416 (March 31, 2013: Rs. 63,625).

(b) The company has given undertaking to infuse equity aggregating to Rs. 346,177 (March 31, 2013: Rs. 292,919) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 81,148,236 (March 31, 2013: 73,217,647), 22,495,000 (March 31, 2013: 22,495,000) and 44,800,000 (March 31, 2013: 44,800,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet it''s obligations.

(c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (''investors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public ofering of the GVK Energy Limited''s equity shares (''Qualifed IPO'' or ''QIPO'') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no ofer for sale takes place within 12 months of the preferred listing period, then, at any time thereafer, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public oferings with an issue size of Rs. 100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

7. Micro, small and medium enterprises

The identifcation of micro, small and medium enterprise suppliers as Defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2014 or March 31, 2013.

8. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

9. On January 17, 2013, May 13, 2013 and November 29, 2013, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares by June 30, 2014 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on Statement of profit and loss.

10. The Company has made investments aggregating to Rs. 22,202 by way of subscription of shares and share application money and provided guarantees and commitments aggregating to Rs. 678,778 to GVK Coal Singapore Pte Limited (GVK Coal), an entity in which Company owns 10%. GVK Coal is currently under development phase and is making losses and its current liabilities exceed current assets by USD 259 mn based on unaudited financial statements for the year ended June 30, 2013. In addition to aforesaid commitments, the Company has also given assurance for financial assistance, if required. GVK coal is also in discussion with non- controlling shareholders to realign the option exercise dates and additional funding from potential investors.

Management believes that GVK Coal would be able to establish profitable operations and current liabilities being in excess of current assets is temporary and accordingly will not have any impact upon investments/guarantees of the Company.

11. The Company had applied to Central government on May 13, 2013 and April 24, 2012 for waiver of excess managerial remuneration for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 137 and Rs. 207 respectively paid to two directors in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. During the current year, one of the directors has refunded excess remuneration and the Company is awaiting approval for excess managerial remuneration paid to another director for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 21 and Rs. 112 respectively which the Company believes will be obtained in due course and would not have any material impact upon the financial statements.

12. The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively ''subsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,655 (March 31, 2013: Rs. 15,659). Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 209,670 (March 31, 2013: Rs. 220,491) has during the current financial year achieved Nil PLF (March 31, 2013: 29.49%) and Nil PLF (March 31, 2013: 24.52%) respectively. Also, GVKIL and GVKGPL have incurred losses of Rs. 7,888 (March 31, 2013: Rs. 8,547) and Rs. 21,103 (March 31, 2013: Rs. 15,332) respectively. However, both the Companies have already tied up with lead bankers and majority of other consortium lenders for additional loans/ moratorium for payments of loan and are confident of receiving approval from the remaining lenders. Further, the Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches such as installing alternate fuel equipment (already done by GVKGPL and GVKIL) etc. to deal with the situation and Management of the Company is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. Further, Management based on its rights under power purchase agreement to recover capacity charges and receipt of the approval from majority of the consortium lenders, believes the subsidiary companies will continue to be in operation in foreseeable future despite continued losses. The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

13. During the year Termination Notice has been served by GVK Oil & Gas Limited, a subsidiary involved in oil & gas activity on Ministry of Petroleum and Natural Gas (Ministry) for termination of Production Sharing Contract. The subsidiary has alleged that it has not been able to efectively carry out exploration operations in the Blocks allotted to it due to Ministry of Defence clearance issues. The Management believes that Ministry will reimburse subsidiary for costs incurred by it and accordingly no adjustment is required to carrying value of investments and advances aggregating to Rs. 17,745 and guarantee aggregating to Rs. 813 issued by the Company for subsidiary.

14. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

15. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2013

1. Corporate information

GVK Power & Infrastructure Limited (''the Company'' or ''GVKPIL'') provides operation and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power companies, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is funded.

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

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a)Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited

Alaknanda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited

GVK Oil & Gas Limited

GVK Developmental Projects Private Limited

GVK Energy Limited

GVK Gautami Power Limited

GVK Airport Holdings Private Limited

PT.GVK Services, Indonesia.

GVK Transportation Private Limited

GVK Ratle Hydro Electrical Projects Private Limited

GVK Energy Venture Private Limited

GVK Bagodara Vasad Expressway Private Limited

GVK Deoli Kota Expressway Private Ltd

Bangalore Airport & Infrastructure Developers Private Limited Mumbai International Airport Private Limited (was associate till October 17, 2011)

GVK Power (Khadur Sahib) Private Limited

GVK Airports International Pte Ltd

GVK Shivpuri Dewas Expressway Private Limited

b) Associates

Bangalore International Airport Limited Seregraha Mines Limited

(c) Key management personnel

Dr. G V K Reddy, Chairman and Managing director

Mr. G V Sanjay Reddy, Director

Mr A Issac George, Director

Mr Krishna Ram Bhupal, Director

(d) Enterprises over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Technical & Consultancy Services Private Limited

Pinakini Share and Stock Broker Limited

GVK Foundation

GVK Projects and Technical Services Limited

GVK Employee Welfare Trust

GVK Coal Developers (Singapore) Pte Ltd

5. Details of loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2013 Rs. 17,620 (March 31, 2012: Rs. 16,906)

Maximum amount outstanding during the year was Rs. 17,620 (March 31, 2012: Rs. 16,906)

The aforesaid loan is repayable on demand.

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2013 Rs. 6,692 (March 31, 2012: Rs. 6,638)

Maximum amount outstanding during the year was Rs. 6,692 (March 31, 2012:Rs. 6,638)

The aforesaid loan is repayable on demand.

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2013 Rs. 4,751 (March 31, 2012: Rs. 4,674)

Maximum amount outstanding during the year was Rs. 4,751 (March 31, 2012: Rs. 4,674)

The aforesaid loan is repayable on demand.

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2013 Rs. 57,302 (March 31, 2012: Rs. 81,437)

Maximum amount outstanding during the year was Rs. 81,590 (March 31, 2012: Rs. 83,894)

The aforesaid loan is repayable on demand.

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2013 Rs. 15,112 (March 31, 2012: Rs. 92)

Maximum amount outstanding during the year was Rs. 15,112 (March 31, 2012: Rs. 92)

The aforesaid loan is repayable on demand.

vi) GVK Transportation Private Limited

Balance as at March 31, 2013 Rs. 35,782 (March 31, 2012: Rs. 32,854)

Maximum amount outstanding during the year was Rs. 37,191 (March 31, 2012: Rs. 38,147)

The aforesaid loan is repayable on demand.

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2013 Rs. 4,258 (March 31, 2012: Rs. 3,649)

Maximum amount outstanding during the year was Rs. 4,258 (March 31, 2012: Rs. 3,650)

The aforesaid loan is repayable on demand.

viii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2013 Rs. Nil (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2012: Rs. 3)

The aforesaid loan was repayable on demand.

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2013 Rs. Nil (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 971 (March 31, 2012: Rs. Nil)

The aforesaid loan was repayable on demand.

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2013 Rs. 0 (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 0 (March 31, 2012: Rs. Nil)

The aforesaid loan is repayable on demand.

xi) GVK Energy Limited

Balance as at March 31, 2013 Rs. 4 (March 31, 2012: Rs. Nil)

Maximum amount outstanding during the year was Rs. 7,502 (March 31, 2012: Rs. Nil)

The aforesaid loan is repayable on demand.

xii) GVK Coal Developers (Singapore) Pte Limited Limited

Balance as at March 31, 2013 Rs. 88 (March 31, 2012: Rs. 40)

Maximum amount outstanding during the year was Rs. 119 (March 31, 2012: Rs. 718)

The aforesaid loan is repayable on demand.

6. Contingent liabilities

a. Direct and indirect taxes:

i) Income tax demand for assessment year 2008-09 for Rs. 73 (March 31, 2012: Rs. 73) and for assessment year 2010-11 for Rs. 871 (March 31, 2012: Nil)

ii) The Company had received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 2,829 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Company''s favour.

b. Security against loans taken by others

i) The Company has provided security by way of pledge of 170,800,000 (March 31, 2012: 180,000,000) shares of GVK Airport Developers Private Limited for loans taken by the aforesaid subsidiary.

ii) The Company has provided security by way of corporate guarantees amounting to Rs. 1 14,322 (March 31, 2012: Rs. 88,220) to subsidiaries and Rs. 1,441 to an associate (March 31, 2012: Rs. 1,441) for various fund and non-fund based facility availed by them.

iii) The Company has provided security by way of corporate guarantees amounting to Rs. 6,879 (March 31, 2012: Rs. 9,074) for securing loans obtained by GVK Projects and Technical Services Limited.

iv) The Company has provided security by way of guarantee amounting to Rs. 281,432 (March 31, 2012: Rs. 220,587) for securing loans obtained by GVK Coal Developers (Singapore) Pte Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

7. Capital and other commitments

a) The Company has outstanding equity commitments to fund subsidiaries under construction stage aggregating to Rs. 30,617 (March 31, 2012: Rs. 29,565).

b) The company has given undertaking to infuse equity aggregating to Rs. 292,919 (March 31, 2012: Rs. 229,590) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 73,217,647 (March 31, 2012: 73,217,647), 22,495,000 (March 31, 2012: 22,495,000) and 44,800,000 (March 31, 2012: Nil) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Private Limited respectively for securing loan obtained by GVK Coal (Singapore) Pte. Limited, an entity in which Company has 10% stake.

c) During the year ended March 31, 2011, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (''investors'') had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited''s equity shares (''Qualified IPO'' or ''QIPO'') within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investor''s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of Rs.100,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

The Company believes that the subsidiary Company would be able to successfully conduct QIPO in the preferred listing period.

8. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management''s knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2013 or March 31, 2012.

9. Operating leases

The Company has entered into commercial leases which are in the nature of operating lease agreements for office spaces for period up to 3 years. There are no restrictions placed upon the company by entering into these leases. Further there are no renewal or escalation clauses in the lease.

10. On January 17, 2013 and May 13, 2013, Securities and Exchange Board of India (SEBI) made amendment to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Equity Listing Agreement, pursuant to which listed entities have been prohibited from framing any employee benefit schemes involving acquisition of own securities from secondary market. The Company had formed GVK Employee Welfare Trust on July 15, 2009 which currently holds 18,083,890 own equity shares which were acquired from secondary market. SEBI circular requires such Trust to dispose shares by December 31, 2013 or to align the Trust with SEBI (ESOS and ESPS) Guidelines. Management is evaluating options available in the circular and believes that application of this circular will not have any material impact on statement of profit and loss.

11. The Reserve Bank of India (''RBI'') had issued guidelines for Core Investment Companies (CIC) on January 5, 2011 pursuant to which Systematically Important Core Investment Companies (SI-CIC) are required to apply for registration with RBI within six months from the date of issue of the guidelines. The Company had applied to RBI for granting Certificate of Registration and was awaiting approval. During the current year, the Company based on legal advice and internal assessment concluded that since its income from financial assets in the year ended March 31, 2012 are less than 50% of the gross income, the Company is not a Non- Banking Financial Company and accordingly not required to register with RBI. The Company vide its letter dated September 20, 2012 to RBI indicated that it is not a Non-Banking Financial Company and is withdrawing its application for registration.

12. The Company has applied to Central government on May 13, 2013 and April 24, 2012 for waiver of excess managerial remuneration for the year''s ended March 31, 2013 and March 31, 2012 amounting to Rs. 137 and Rs. 207 respectively paid to two directors in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. The Company believes that approval will be obtained in due course and would not have any material impact upon the financial statements.

13. The subsidiary companies of GVK Energy Limited viz. GVK Industries Limited (GVKIL) and GVK Gautami Power Limited (GVKGPL) (collectively ''subsidiary companies'') had commenced construction of phase III and phase II power plants respectively on which they have incurred aggregated cost of Rs. 15,659 as at March 31, 2013. Due to lower supply/availability of gas, the subsidiary companies have temporarily suspended the construction activities and intend to resume construction once natural gas is available which Management expects to happen in foreseeable future. Further, phase II of GVKIL and Phase I of GVKGPL having fixed assets with Written Down Value of Rs. 220,491 as at March 31, 2013 has during the current financial year achieved PLF of 29.49% and 24.52% respectively and have provided for refund of capacity charge and disincentives aggregating to Rs. 10,608 (March 31, 2012: Rs. 2,510) and Rs. 24,114 (March 31, 2012: Rs. 7,009) respectively. The Company and Association of Power Producers are closely monitoring the situation and evaluating various approaches such as installing alternate fuel equipment (already done by GVKGPL and GVKIL is in the process of installing) etc. to deal with the situation and Management is confident that Government of India will take necessary steps/initiatives to improve the situation of natural gas. The Company accordingly believes that investments, including Compulsory Convertible Debentures, in subsidiary company with carrying value of Rs. 108,323 (includes gas and non-gas based projects) is recoverable in normal course of business and no provision for diminution is necessary.

14. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

15. The financial statements contain certain amounts reported as "0"which are less than Rs. 1.

16. Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to confirm to this year''s classification.

Mar 31, 2012

1. Corporate information

GVK Power & Infrastructure Limited ('the Company' or 'GVKPIL') provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants, airports etc. The Company has also acquired substantial ownership interest into power generating assets, airports, roads and companies providing infrastructure facilities.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) Terms/rights attached to equity shares

The Company has only one class of equity share having par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Vehicle loan from bank carries interest at 8.5% p.a. The loan is repayable in 36 monthly installments of Rs.3.15 from the date of loan, viz., January 29, 201 1. The loan is secured by charge over fixed asset i.e. vehicle, for which finance is provided by the lender.

a. Overdraft facility is unsecured and carries interest rate of 10.85%.

b. Term loan aggregating to Rs.20,000 is secured by first charge on the current assets, present and future of the Company and carries interest at base 150 bps i.e. 11.50% per annum

c. Term loan aggregating to Rs.1,870 presently carries interest of 12% per annum and scured by (i) charge on loans and advances of the Company to GVK Airport Developers Private Limited ("GVKADPL") and also loans and advances provided by GVKADPL to GVK Airport Holdings Private Limited ("GVKAHPL") and Bangalore Airport & Infrastructure Developer Private Limited ("BAIDPL") (ii) exclusive charge on shares of GVKADPL to the extent of two times of facility amount. (iii) exclusive charge on shares of GVKAHPL and BAIDPL not exceeding 30% of the shares of the Companies and the no. of shares to be pledged to be in proportion to the lenders at GVKADPL.

d. Term loans aggregating to Rs.15,000 is unsecured and carries interest rate of 11.75%.

3. Gratuity benefit

The company operates one defined benefit plan, viz., gratuity, for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on retirement or termination at 15 days of last drawn salary for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

* During the previous year, the Company has transferred certain employees to its subsidiary GVK Energy Limited pursuant to which liability of Rs.30 was transferred to aforesaid subsidiary.

4. Related party disclosures

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

a) Related parties where control exists

Subsidiaries

GVK Industries Limited GVK Jaipur Expressway Private Limited Alaknanda Hydro Power Company Limited GVK Airport Developers Private Limited GVK Coal (Tokisud) Company Private Limited Goriganga Hydro Power Private Limited GVK Power (Goindwal Sahib) Limited

5. Details of Loan given to subsidiaries, associates, parties in which directors are interested Subsidiaries

i) GVK Oil & Gas Limited

Balance as at March 31, 2012 Rs.16,906 (March 31, 2011: Rs.15,225)

Maximum amount outstanding during the year was Rs.16,906 (March 31, 2011: Rs.15,225)

The aforesaid loan is repayable on demand

ii) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2012 Rs.6,638 (March 31, 2011: Rs.6,302)

Maximum amount outstanding during the year was Rs.6,638 (March 31, 2011:Rs.6,302)

The aforesaid loan is repayable on demand

iii) Goriganga Hydro Power Private Limited

Balance as at March 31, 2012 Rs.4,674 (March 31, 2011: Rs.4,309) Maximum amount outstanding during the year was Rs.4,674 (March 31, 2011: Rs.4,309)

The aforesaid loan is repayable on demand

iv) GVK Airport Developers Private Limited

Balance as at March 31, 2012 Rs.81,437 (March 31, 2011: Rs.58,485) Maximum amount outstanding during the year was Rs.83,894 (March 31, 2011: Rs.83,285)

The aforesaid loan is repayable on demand

v) GVK Developmental Projects Private Limited

Balance as at March 31, 2012 Rs.92 (March 31, 2011: Rs.92) Maximum amount outstanding during the year was Rs.92 (March 31, 2011: Rs.95)

The aforesaid loan is repayable on demand

vi) GVK Transportation Private Limited

Balance as at March 31, 2012 Rs.32,854 (March 31, 2011: Rs.191) Maximum amount outstanding during the year was Rs.38,147 (March 31, 2011: Rs.191 )

The aforesaid loan is repayable on demand

vii) GVK Ratle Hydro Electrical Projects Private Limited

Balance as at March 31, 2012 Rs.3,649 (March 31, 2011: Rs.3,574) Maximum amount outstanding during the year was Rs.3,650 (March 31, 2011:Rs.3,574)

The aforesaid loan is repayable on demand

viii) Alakananda Hydro Power Company Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil) Maximum amount outstanding during the year was Rs.3 (March 31, 2011:Rs.28)

The aforesaid loan was repayable on demand

ix) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs.Nil (March 31, 2011:Rs.500)

The aforesaid loan was repayable on demand

x) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2011:Rs.1,023)

The aforesaid loan was repayable on demand

xi) GVK Energy Limited

Balance as at March 31, 2012 Rs.Nil (March 31, 2011: Rs.Nil)

Maximum amount outstanding during the year was Rs. Nil (March 31, 2011:Rs.3,279)

The aforesaid loan was repayable on demand

6. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises Act, 2006" is based on Management's knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2012 or March 31, 2011.

7. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

8. The Reserve Bank of India ('RBI') had issued guidelines for Core Investment Companies (CIC) on January 5, 2011 pursuant to which Systematically Important Core Investment Companies (SI-CIC) are required to apply for registration with RBI within six months from the date of issue of the guidelines. The Company had applied to RBI for granting Certificate of Registration and is awaiting approval. As a SI-CIC, the Company is required to comply with requirements of capital requirements and leverage ratios. The Company is not in compliance with the aforesaid requirements and in the process of submitting an application to

Reserve Bank of India for granting additional time to meet the compliance requirements. The Company based on legal advice/ internal assessment believes that RBI would look favourably into the matter. Further, the Company based on legal advise/ internal assessment believes that since its income from financial assets in the year ended March 31, 2012 are less than 50% of the gross income, the Company is not a Non- Banking Financial Company in the current year.

9. The Company has applied to Central government on April 24, 2012 for waiver of excess managerial remuneration amounting to Rs.207 paid to two directors during the year beyond the limits specified in Part II of Section II (B) and Section III of Schedule XIII of the Companies Act, 1956. The Company believes that approval will be obtained in due course and would not have any material impact upon the financial statements.

10. The financial statements contain certain amounts reported as "0"which are less than Rs.1.

11. Previous year figures

Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.

Mar 31, 2011

1. Nature of operations

GVK Power & Infrastructure Limited ("the Company or "GVKPIL") provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants and infrastructure companies. It has also acquired substantial ownership interest into power generating assets and companies engaged in providing infrastructure facilities.

2. Employee benefits

The Company has a defined benefit gratuity scheme. Every employee who has completed five years or more of service gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit recognized in the profit and loss account and amounts recognized in the balance sheet for the gratuity scheme.

3. Related party transaction

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

b) Associates Mumbai International Airport Private Limited **

Bangalore International Airport Limited**

Seregraha Mines Limited**

** through subsidiary Company

c) Key management personnel

Dr G V Krishna Reddy - Chairman & Managing Director

Mr G V Sanjay Reddy - Vice Chairman

Mr A Issac George - Director & CFO

Mr Krishna Ram Bhupal - Director

d) Enterprises over TAJ GVK Hotels & Resorts Limited which the key Orbit Travel & Tours Private Limited management GVK Novopan Industries Limited personnel exercise GVK Technical & Consultancy Services Private Limited significant influence Gautami Power (Samalkot) Private Limited (merged with GVK Gautami Power Limited) Pinakini Share & Stock Broker Limited GVK Projects & Technical Services Limited GVK Foundation GVK Employees Welfare Trust

5. Details of Loan given to subsidiaries, associates, parties in which directors are interested and companie under same management Subsidiaries:

i) GVK Gautami Power Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 155,500)

The aforesaid loan was repayable on demand

ii) GVK Industries Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 83,401)

The aforesaid loan was repayable on demand

iii) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. 50,000)

Maximum amount outstanding during the year was Rs. 50,000 (Previous Year Rs. 196,938)

The aforesaid loan is repayable on demand

iv) GVK Oil & Gas Limited

Balance as at March 31, 2011 Rs. 1,522,535 (Previous Year Rs. 9)

Maximum amount outstanding during the year was Rs. 1,522,535 (Previous Year Rs. 9)

The aforesaid loan was repayable on demand

v) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2011 Rs. 630,224 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 630,224 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

vi) Goriganga Hydro Power Private Limited

Balance as at March 31, 2011 Rs. 430,886 (Previous Year Rs. 543)

Maximum amount outstanding during the year was Rs. 430,886 (Previous Year Rs. 543)

The aforesaid loan was repayable on demand

vii) GVK Airport Developers Private Limited

Balance as at March 31, 2011 Rs. 5,848,477 (Previous Year Rs. 4,863,760)

Maximum amount outstanding during the year was Rs. 8,328,477 (Previous Year Rs. 4,911,160)

The aforesaid loan is repayable on demand

viii) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. 102,267)

Maximum amount outstanding during the year was Rs. 102,267 (Previous Year Rs. 140,302)

The aforesaid loan is repayable on demand

ix) GVK Developmental Projects Private Limited

Balance as at March 31, 2011 Rs. 9,226 (Previous Year Rs. 6)

Maximum amount outstanding during the year was Rs. 9,513 (Previous Year Rs. 102,002)

The aforesaid loan is repayable on demand

x) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 60,000)

The aforesaid loan was repayable on demand

xi) GVK Transportation Private Limited

Balance as at March 31, 2011 Rs. 19,143 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 19,143 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

Notes to Accounts

(All amounts expressed in Indian Rupees Thousands unless otherwise stated)

xii) GVK Energy Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 327,894 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xiii) Alaknanda Hydro Power Company Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 2,758 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xiv) Mumbai International Airport Limited

Balance as at March 31, 2011 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 275 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xv) Bangalore International Airport Limited

Balance as at March 31, 2011 Rs. 872 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 872 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

xvi) GVK Ratle Hydro Electrical Project Private Limited

Balance as at March 31, 2011 Rs. 357,424 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 357,424 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

4. Contingent liability

a. Direct and indirect taxes

i) Income tax demand for assessment year 2008-09 for Rs. 7,298 (March 31, 2010 Rs. Nil).

ii) The Company has received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 282,960 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

Management based on its internal assessment and/or legal advice is confident that the cases will be decided in the Companys favour.

b. Security against loans taken by others

i) During the year ended March 31, 2011 the Company has provided security amounting to Rs. 1,800,000 (Previous Year Rs. 6,047,918) by way of pledge of its investments in subsidiaries in respect of amounts borrowed by its subsidiaries.

ii) During the year ended March 31, 2011 the Company has provided security by way of corporate guarantees amounting to Rs. 11,618,821 (Previous Year 14,980,000) to subsidiaries and Rs. 144,100 to an associate (Previous Year Rs. 144,100).

iii) During the year ended March 31, 2011 the Company has provided security by way of corporate guarantees amounting to Rs. 1,004,792 (Previous Year 990,533) to GVK Projects and Technical Services Limited.

Management is of the opinion that the aforesaid Companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

5. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

6. Additional information pursuant to the provisions of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 to the extent Nil or not applicable have not been disclosed.

7. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises development Act, 2006" is based on Managements knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2011.

8. Dilution of investment

During the current year, the Company, GVK Energy Limited (subsidiary Company) and certain private equity investors (investors) have entered into an investment agreement pursuant to which the Company has transferred its investments in the below mentioned subsidiaries to GVK Energy Limited and then diluted its stake by 18.05% in favour of the investors:

a. GVK Industries Limited

b. GVK Gautami Power Limited

c. GVK Coal (Tokisud) Company Private Limited

d. GVK Power (Goindwal Sahib) Limited

e. Alaknanda Hydro Power Company Limited

As per the investment agreement, the Company and GVK Energy Limited has undertaken to conduct an initial public offering of the GVK Energy Limiteds equity shares (Qualified IPO or QIPO) within 60 months from the date of investment agreement (preferred listing period).

If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor ("Put Right") on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor ("Put IRR") and ii) the fair market value of the investors shares.

Provided the Put IRR shall be reduced to 15% IRR, if at least 3 private sector initial public offerings with an issue size of Rs.10,000,000 or more each have not taken place in India between the 36th month to the 60th month from date of investment agreement.

9. Previous year comparatives

Previous year figures have been regrouped where necessary to conform to current year classification.`

Mar 31, 2010

1. Nature of operations

GVK Power & Infrastructure Limited ("the Company or "GVKPIL") provides operating and maintenance services, manpower and consultancy services and incidental services to owners of power plants and infrastructure companies. It has also acquired substantial ownership interest into power generating assets and companies engaged in providing infrastructure facilities.

2. Employee benefits

The Company has a defined Benefit Gratuity Plan. Every employee who has completed five years or more of service gets a gratuity on retirement or termination at 15 days salary (last drawn salary) for each completed year of service. The scheme is unfunded.

The following tables summarize the components of net benefit recognized in the profit and loss account and amounts recognized in the balance sheet for the respective plans.

3. Related party transaction

Disclosure as required by Notified Accounting Standard 18 (AS -18) "Related Party Disclosures" are as follows:

Names of the related parties and description of relationship:

(a) Related parties where control exists

Subsidiaries GVK Industries Limited

GVK Jaipur Expressway Private Limited

Alakananda Hydro Power Company Limited

GVK Airport Developers Private Limited

GVK Coal (Tokisud) Company Private Limited

Goriganga Hydro Power Private Limited

GVK Power (Goindwal Sahib) Limited

GVK Perambalur SEZ Private Limited (Formerly GVK Infratech Private Limited)

GVK Oil & Gas Limited (Formerly GVK Energy Limited)

GVK Developmental Projects Pvt Ltd

GVK Energy Limited

GVK Gautami Power Limited (Fomerly Gautami Power Limited)

GVK Airport Holdings Private Limited*

Bangalore Airport & Infrastructure Developers Private Limited*

* Through subsidiary Company

(b) Associates

Mumbai International Airport Private Limited ** Bangalore International Airport Limited **

Seregraha Mines Limited** ** Through subsidiary Company

(c) Key management personnel

Mr. G V Krishna Reddy Chairman and Managing director

Mr. G V Sanjay Reddy Director

Mr A Issac George Director

Mr Krishna Ram Bhupal Director

(d) Companies over which the key management personnel exercise significant influence

TAJ GVK Hotels & Resorts Limited

Orbit Travels & Tours Private Limited

GVK Novopan Industries Limited

GVK Technical & Consultancy Services Private Limited

Gautami Power (Samalkot) Private Limited

Pinakini Share and Stock Broker Limited

GVK Projects and Technical Services Limited

(Formed by merger of GVK Aviation Private Limited and Vertex Project Limited)

GVK Foundation

4. Details of Loan given to subsidiaries, associates and parties in which directors are interested Subsidiaries

(i) GVK Gautami Power Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 155,500 (Previous Year Rs. 348,500)

The aforesaid loan was repayable on demand

(ii) GVK Industries Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. 50,000)

Maximum amount outstanding during the year was Rs. 83,401 (Previous Year Rs. 200,000)

The aforesaid loan was repayable on demand

(iii) GVK Power (Goindwal Sahib) Limited

Balance as at March 31, 2010 Rs. 50,000 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 196,938 (Previous Year Rs. 125)

The aforesaid loan is repayable on demand

(iv) GVK Oil & Gas Limited

Balance as at March 31, 2010 Rs. 9 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 9 (Previous Year Rs. 760)

The aforesaid loan is repayable on demand

(v) GVK Perambalur SEZ Private Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. Nil (Previous Year Rs. 20,000)

The aforesaid loan was repayable on demand

(vi) Goriganga Hydro Power Private Limited

Balance as at March 31, 2010 Rs. 543 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 543 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(vii) GVK Airport Developers Private Limited

Balance as at March 31, 2010 Rs. 4,863,760 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 4,911,160 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(viii) GVK Coal (Tokisud) Company Private Limited

Balance as at March 31, 2010 Rs. 102,267 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 140,302 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(ix) GVK Developmental Projects Private Limited

Balance as at March 31, 2010 Rs. 6 (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 102,002 (Previous Year Rs. Nil)

The aforesaid loan is repayable on demand

(x) GVK Jaipur Expressway Private Limited

Balance as at March 31, 2010 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year was Rs. 60,000 (Previous Year Rs. Nil)

The aforesaid loan was repayable on demand

5. Contingent liability

a. Security against loans taken by others

(i) During the year ended March 31, 2010 the Company has provided security amounting to Rs. 6,047,918 (Previous Year Rs. 2,860,912) by way of pledge of its investments in subsidiaries in respect of amounts borrowed by its subsidiaries.

(ii) During the year ended March 31, 2010 the Company has provided security by way of corporate guarantees amounting to Rs. 14,980,000 (Previous Year 2,918,200) to subsidiaries and Rs. 144,100 to an associate (Previous Year Rs. Nil).

(iii) During the year ended March 31, 2010 the Company has provided security by way of corporate guarantees amounting to Rs. 990,533 (Previous Year 1,211,210) to GVK Projects and Technical Services Limited (formerly known as GVK Aviation Private Limited)

Management is of the opinion that the subsidiary Companies and the associate will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided.

b. Claims against the Company not acknowledged as debt

(i) The Company has received a notice dated February 4, 2008 from the Office of the District Registrar of Assurances, Hyderabad demanding payment of stamp duties of Rs. 282,960 on transfer of shares to the shareholders of GVK Industries Limited vide the scheme of arrangement approved by the Andhra Pradesh High Court. The Company has obtained an order from the Andhra Pradesh High Court staying the above notice on March 13, 2008 until such further orders from the said court.

(ii) The Company has received a show cause notice from service tax authorities demanding the Company to pay service tax of Rs. 27,943 under the category "Management, Maintenance or Repair services" for operating and maintenance of immovable property, management of power plant and maintenance of equipment for the period from July 1, 2003 to September 30, 2008. The Company has preferred an appeal against the said order before Customs, Excise and Service Tax Appellate Tribunal, Bangalore. The consequential liability in respect of service tax for the period from July 1, 2003 to March 31, 2010 is estimated at Rs. 48,529 (Previous Year Rs. 30,624). Management, based on its internal assessment, is confident that the case will be decided in the Companys favour.

6. Segment information

In accordance with Accounting Standard 17 - Segment Reporting, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

7. Additional information pursuant to the provisions of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 to the extent Nil or not applicable have not been disclosed.

8. Micro, small and medium enterprises

The identification of micro, small and medium enterprise suppliers as defined under the provisions of "Micro, small and medium enterprises development Act, 2006" is based on Managements knowledge of their status. There are no dues to micro, small and medium enterprises as on March 31, 2010.

9. Previous year comparatives

Previous year figures have been regrouped where necessary to conform to current year classification.

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