gmr airports infrastructure ltd share price Auditors report


To the Members of GMR Infrastructure Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of GMR Infrastructure Limited (‘the Company), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
1. Assessment of going concern basis (refer note 2.1 to the accompanying standalone financial statements)
The Company has incurred loss before tax from continuing operations amounting to 100.59 crore during the year ended 31 March 2022 and its current liabilities exceeds its current assets by 7.87 crore as at 31 March 2022. While the above factors indicated a need to assess the Companys ability to continue as a going concern, as mentioned in note 2.1 to the accompanying standalone financial statements, the Company has taken into consideration various initiatives including raising of finance from financial institutions, strategic investors and from other strategic initiatives considered as mitigating factors in its assessment for use of going concern basis of accounting for preparation of the accompanying standalone financial statements. Our audit procedures included but were not limited to, the following in relation to assessment of appropriateness of going concern basis of accounting:
• Obtained an understanding of the managements process for identifying all the events or conditions that could impact the Companys ability to continue as a going concern and the process followed to assess the mitigating factors for such events or conditions. Also, obtained an understanding around the methodology adopted and the associated controls implemented by the Company to assess their future business performance to prepare a robust cash flow forecast;
For the aforesaid purpose, the Management has prepared future cash flow forecasts based on the management business plans as approved by the Board of the Directors, and performed sensitivity analysis of the key assumptions and inputs used for such projections to assess whether the Company would be able to operate as a going concern for a period of at least 12 months from the date of standalone financial statements and concluded that the going concern basis of accounting used for preparation of the accompanying standalone financial statements is appropriate and there is no material uncertainty in such assessment. • Reconciled the cash flow forecast to the future business plans of the Company as approved by the Board of Directors and considered the same for our assessment of the Companys capability to meet its financial obligation falling due within next twelve months;
• In order to corroborate managements future business plans and to identify potential contradictory information, we read the minutes of the Board of Directors and discussed the same with the management;
We have considered the assessment of managements evaluation of going concern basis of accounting as a key audit matter due to the pervasive impact thereof on the standalone financial statements and the significant judgements and assumptions that are inherently subjective and dependent on future events, involved in preparation of cash flow projections and determination of the overall conclusion by the management. • Tested the appropriateness of key assumptions used by the management, including the impact of COVID-19 pandemic on such assumption, that had most material impact in preparation of the cash flow forecast and evaluated the completeness and accuracy of the expected outflows on account of debt repayments and other commitments made by the Company;
• Performed independent sensitivity analysis to test the impact of estimation uncertainty on the cash flows due to change in key assumptions;
• Reviewed the historical accuracy of the cash flow projections prepared by the management in prior periods;
• Inspected the relevant documents and other supporting evidence for managements plan of raising funds from strategic investors and raising of additional funds from financial institutions; and
• Assessed the appropriateness and adequacy of the disclosures made in the standalone financial statements in respect of going concern.
2. Fair value measurement of investments in equity and preference shares of subsidiaries (refer note 2.2 for the accounting policy and note 5 for disclosures of the accompanying standalone financial statements)
As at 31 March 2022, the Company has investments in unquoted equity shares and preference shares of its subsidiaries amounting to 12,613.61 crore which are carried at fair value. Our audit procedures to assess the reasonableness of fair valuation of investments included the following:
The fair value of such unquoted investments is determined by applying valuation techniques which has been performed by independent valuation experts, applying applicable valuation methodologies. • Obtained an understanding of the managements process and controls for determining the fair value and provision and tested the design and operating effectiveness of such controls;
The determination of fair values involves significant management assumptions, judgements and estimates which include unobservable inputs such as future cash flows and judgments with respect to estimation of Passenger traffic, Air traffic movement and rates, future outcomes of ongoing litigations as detailed in note 46(b) of the accompanying standalone financial statements. • Carried out assessment of forecasts of future cash flows prepared by the management, evaluating the assumptions and estimates used in such forecasts including economic and financial data;
• Evaluated the Companys valuation methodology in determining the fair value of the investment. In making this assessment, we also assessed the professional competence, objectivity and capabilities of the valuation expert engaged by the management;
The valuation of these investments was considered to be the area which required significant auditor attention and was of most significance in the audit of standalone financial statements due to the materiality of these investments to the standalone financial statements and complexities and subjectivity involved in the estimates and underlying key assumptions used in the valuation models for these investments. Hence, we have determined this as a key audit matter for current year audit.
• Engaged auditors valuation experts to ascertain the appropriateness of the valuation methodology including the allocation made to different investments and the concluded fair value;
• Ensured the appropriateness of the carrying value of these investments in the standalone financial statements and the gain or loss recognised in the standalone financial statements as a result of such fair valuation;
In addition to above, following disclosures made in the accompanying standalone financial statements have been considered as fundamental to the users understanding of such standalone financial statements: • Obtained appropriate management representations with re- spect to the underlying valuation report.
• Assessed the appropriateness and adequacy of related disclo- sures in the standalone financial statements in accordance with the applicable accounting standards.
a) Note 46(a) of the accompanying Standalone Financial Statements, which describes the uncertainties due to the outbreak of COVID-19 pandemic and managements evaluation of its impact on the assumptions underlying the valuation of investments in the airport sector which are carried at fair value in the Standalone Financial Statements as at the balance sheet date.
b) Note 46(b) in relation to carrying value of investments in the subsidiaries as mentioned in the aforesaid note, which are dependent on the uncertainties relating to the future outcome of the ongoing matters as further described in the aforesaid note.
3. Accounting of Demerger of non-airport business (refer note 2.1 of accounting policy and note 41 & 45 for disclosures of the accompanying standalone financial statements)
During the current year, the Company has demerged its Engineering, procurement and construction (EPC) business and Urban Infrastructure Business (including Energy Business) (collectively referred as ‘non-airport business) into GMR Power and Urban Infra Limited (‘GPUIL) pursuant to the Composite Scheme of arrangement ("Composite Scheme") approved by the National Company Law Tribunal (NCLT) on dated 22 December 2021 with an appointed date of 01 April 2021. The Company filed the NCLT approved Composite Scheme with Registrar of Companies on 31 December 2021. Our audit procedures included but were not limited to, the following in relation to accounting of Demerger of non-airport business :
• Evaluated the design and tested the operating effectiveness of the internal financial controls relevant for recording the impact of the Composite Scheme and related disclosures around ‘discontinued operations.
The Company has given accounting effect to such Composite Scheme in the accompanying standalone financial statements from 31 December 2021, being the ‘effective date as per the Composite Scheme. The accounting of demerger of the non-airport business has significant measurement and disclosure impact on the Companys financial statements and also involved significant judgements and assessment around: • Read the NCLT order (‘the order) dated 22 December 2021 in respect of approval of the Composite Scheme and subsequent filing of the order with Registrar of the Companies, Mumbai on 31 December 2021.
• Evaluated the appropriateness of the accounting treatment followed by the Company for identification, recognition and measurement of assets and liabilities of non-airport Business as at the effective date in accordance with the Composite Scheme and generally accepted accounting principles in India including Indian Accounting Standards notified under the Companies Act, 2013.
- identification of assets and liabilities to be transferred which is subject to the provisions of the Composite Scheme.
• Tested the allocation of assets and liabilities between non- airport Business and the remaining business in the company and ensured its completeness in accordance with the Com- posite Scheme and minutes of meeting of the Board held on 28 December 2021.
- estimates and significant management judgement in respect of the derecognition of assets and liabilities to be transferred to GPUIL.
This has been considered as a key audit matter in view of magnitude of the transaction classified as a ‘discontinued operation, being a significant non-routine event in the current year and owing to above mentioned complexities involved.
• Assessed the adequacy and appropriateness of the disclosures in the standalone financial statements, relating to the discon- tinued operations and the transfer of segment, as required by the applicable Indian Accounting Standards.
The above matter is also considered fundamental to the understanding of the users of the accompanying standalone financial statements.

Information other than the Financial Statements and Auditors Report thereon

6. The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditors report thereon. These reports are expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Companys Board of Directors. The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. 11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure I, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) The matters described in Emphasis of Matter reported in S.No. 2(a), 2(b) and 3 of the Key audit matters section in paragraph 5 above, in our opinion, may have an adverse effect on the functioning of the Company;

f) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of section 164(2) of the Act;

g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and

h) With respect to the other matters to be included in the Auditors Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 36(I) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. The Company, as detailed in note 35(e) to the standalone financial statements, has made provision as at 31 March 2022, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The Company does not have any derivative contracts at the end of the year;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv. a. The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any entities, including foreign entities (‘the intermediaries), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any entities, including foreign entities (‘the Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement. v. The Company has not declared or paid any dividend during the year ended 31 March 2022.

For Walker Chandiok & Co LLP
Chartered Accountants
Firms Registration No.: 001076N/N500013
Neeraj Sharma
Partner
Place: New Delhi Membership No.: 502103
Date: 17 May 2022 UDIN: 22502103AJBZVW5917

Annexure I referred to in Paragraph 16 of the Independent Auditors Report of even date to the members of GMR Infrastructure Limited on the standalone financial statements for the year ended 31 March 2022

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The property, plant and equipment have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

In our opinion, the frequency of physical verification program adopted by the Company, is reasonable having with regard to the size of the Company and the nature of its assets.

(c) The title deeds of all the immovable properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

(d) The Company has not revalued its Property, Plant and Equipment or intangible assets during the year. (e) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable to the Company.

(ii) (a) The Company does not hold any inventory. Accordingly, reporting under clause 3(ii) (a) of the Order is not applicable to the Company.

(b) The Company had working capital limits* in excess of 5 crore sanctioned by banks based on the security of current assets during the year. The quarterly statements, in respect of the working capital limits have been filed by the Company with such banks and such statements are in agreement with the books of account of the Company for the respective periods, which were not subject to audit except for following:

Name of the Bank/ financial institution Working capital limit sanctioned (Rs. in crore) Nature of current assets offered as security Quarter Amount disclosed as per return (Rs. in crore) Amount as per books of accounts (Rs. in crore) Difference (Rs. in crore) Remarks/reason, if any
Bank of Baroda 304.50 1. Current assets of the Company (DFCC Project Package 202); June 2021– Current Assets 598.88 648.79 49.91 Bank considers Work-in- Progress based on certificate of Chartered Engineer (CE) at Project
2. The Escrow Account (in the name of GIL- SIL JV) maintained for the purpose of September 2021 – Current Assets 530.85 653.68 122.83 Level. CE issues the certificate based on Total Work Done upto the end of the month minus Total
Project Package 202 along with other working capital as well as term loan lenders and December 2021 – Current Assets 664.78 676.01 11.32 work certified by DFCCIL. Whereas in Books of accounts, WIP is recognized based on accounting policies.
equipment financed by Laksmi Vilas Bank (‘LVB) June 2021– Current Liabilities 715.49 856.85 141.37 Difference is due to figures shown in Returns pertains to Project Package 202 which
September 2021 – Current Liabilities 645.13 863.66 218.53 includes Current Liabilities of the Company and GIL SIL JV while figures as per books of
December 2021 – Current Liabilities 772.81 889.04 116.24 accounts are only for the Company.

* pursuant to Composite Scheme of arrangement these working capital limits have been transferred to GMR Power and Urban Infra Limited (refer note 41).

(iii) (a) The Company has not provided advances in the nature of loans or security to Subsidiaries/Joint Ventures / Associates / Others during the year. Further, the Company has provided loans and guarantees, to Subsidiaries / Joint Ventures / Associates / Others during the year. The details of the same are given below: (also refer note 36(I) of the accompanying standalone financial statements)

Particulars Guarantees Loans
(Rs. in crore) (Rs. in crore)
Aggregate amount during the year
a) Transferred during the year to GPUIL*
- Subsidiaries - 666.74
- Joint Ventures 194.31 145.79
b) Other than those covered in a) above:
- Subsidiaries 750.00 115.58
- Others 3,234.21 401.55
Balance outstanding as at balance sheet date
- Subsidiaries 2,061.03 132.25
- Others 4,799.57 331.05

* Pursuant to scheme of arrangement these transactions/balances have been transferred during the year to GPUIL with effect from 31 December 2021 as outstanding as on that date (refer note 41):

(b) The investments made, guarantees provided, security given and terms and conditions of the grant of all loans and advances in the nature of loans and guarantees provided are not, prima facie, prejudicial to the Companys interest.

(c) The Company has not granted advances in the nature of loans during the year. Further, in respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments/receipts of principal and interest are regular.

(d) There is no overdue amount in respect of loans or advances in the nature of loans granted to such companies, firms, LLPs or other parties.

(e) The Company has granted loans or advances in the nature of loans which had fallen due during the year and such loans or advances in the nature of loans was / were renewed/extended during the year / fresh loans have been granted to settle the dues of the existing loans given to the same parties. The details of the same has been given below:

Name of the party Nature of loan Total loan amount (Rs. in crore) Nature of extension (i.e. renewed/ extended/fresh loan provided) Aggregate amount of overdues of existing loans renewed or extended or settled by fresh loans (Rs. in crore) Percentage of the aggregate to the total loans or advances in the nature of loans granted during the year
GMR Generation Assets Ltd* Loan to related parties 893.36 Extended 337.00 37.72%
GMR Energy Limited* Loan to related parties 810.04 Extended 262.66 32.43%
Energy Trading Limited* Loan to related parties 56.97 Extended 22.71 39.87%

*These loans given have been transferred to GMR Power and Urban Infra Limited (‘GPUIL) (refer note 41) pursuant to Composite Scheme of arrangement w.e.f. 31 December 2021.

(f) The Company has not granted any loans or advances in the nature of loans, which are repayable on demand or without specifying any terms or period of repayment.

(iv) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Act in respect of loans, investments, guarantees and security, as applicable.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there is no amount which has been considered as deemed deposit within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has specified maintenance of cost records under sub-section (1) of section 148 of the Act only in respect of specified products of the Company. For such products, we have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under the aforesaid section, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

Further, specified products of the Company has been transferred to GMR Power and Urban Infra Limited (‘GPUIL) (refer note 41) pursuant to composite scheme of arrangement w.e.f. 31 December 2021.

(vii) (a) In our opinion, and according to the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues referred in sub-clause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute Nature of dues Gross Amount (Rs. in crore) Amount paid under Protest (Rs. in crore) Period to which the amount relates Forum where dispute is pending
Income Tax Act, 1961 Income Tax 183.42 - Assessment year 2010-11 to 2015-16 Income Tax Appellate Tribunal, Bengaluru
Income Tax Act, 1961 Income Tax 10.82 - Assessment year 2016-17 Commissioner of Income Tax (A), Bengaluru

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been recorded in the books of accounts.

(ix) (a) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or other borrowings to any lender or in the payment of interest thereon, except for the below:

Nature of borrowing, including debt securities Name of lender Amount not paid on due date (Rs. in crore) Whether principal or interest No. of days delay or unpaid till the date of audit report Remarks, if any
Loans and borrowings retained in the Company
Foreign Currency Kuwait Investment 48.00 Interest 137-158
Convertible Bonds Authority
Loan and borrowings transferred to GMR Power and Urban Infra Limited*
Term Loans LIC 43.33 Principal 42
Term Loans LIC 15.88 Interest 2-47
Term Loans Yes Bank 66.96 Principal 8-50
Term Loans Yes Bank 41.79 Interest 3-61
Term Loans ICICI Bank 18.65 Interest 5-40
Foreign Currency Kuwait Investment 157.18 Interest 21
Convertible Bonds Authority

*Pursuant to composite scheme of arrangement these borrowings have been transferred to GMR Power and Urban Infra Limited (‘GPUIL) (refer note 41) w.e.f. 31 December 2021 and accordingly, aforementioned ‘number of days of delay has been computed up till 31 December 2021.

(b) According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained.

(d) In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the Company, funds raised by the Company on short term basis have not been utilised for long term purposes.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. (f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year.

Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit.

(b) No report under section 143(12) of the Act has been filed with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone financial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system as required under section 138 of the Act which is commensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with them and accordingly, provisions of section 192 of the Act are not applicable to the Company.

(xvi) (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Accordingly, reporting under clauses 3(xvi)(a), (b) and (c) of the Order are not applicable to the Company.

(b) Based on the information and explanations given to us and as represented by the management of the Company, the Group (as defined in Core Investment Companies (Reserve Bank) Directions, 2016) has two CICs as part of the Group.

(xvii) The Company has incurred cash losses in the current and immediately preceding financial years amounting to 176.05 crores and 484.81 crores respectively (including cash losses of 82.95 crores and 378.23 crores relating to discontinued operations for the current and immediately preceding financial year respectively).

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management, we are of the opinion that no material uncertainty exists as on the date of the audit report that Company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) According to the information and explanations given to us, although the Company fulfilled the criteria as specified under section 135(1) of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, however, in the absence of average net profits in the immediately three preceding years there is no requirement for the Company to spend any amount under sub-section (5) of section 135 of the said Act. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.

(xxi) The reporting under clause 3(xxi) is not applicable in respect of audit of standalone financial statements of the Company.

Accordingly, no comment has been included in respect of said clause under this report.

For Walker Chandiok & Co LLP
Chartered Accountants
Firms Registration No.: 001076N/N500013
Neeraj Sharma
Partner
Place: New Delhi Membership No.: 502103
Date: 17 May 2022 UDIN: 22502103AJBZVW5917

Annexure II to the Independent Auditors Report of even date to the members of GMR Infrastructure Limited, on the standalone financial statements for the year ended 31 March 2022

Annexure II

Independent Auditors Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act)

1. In conjunction with our audit of the standalone financial statements of GMR Infrastructure Limited (‘the Company) as at and for the year ended 31 March 2022, we have audited the internal financial controls with reference to financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companys business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility for the Audit of the Internal Financial Controls with Reference to Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI) prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A Companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP
Chartered Accountants
Firms Registration No.: 001076N/N500013
Neeraj Sharma
Partner
Place: New Delhi Membership No.: 502103
Date: 17 May 2022 UDIN: 22502103AJBZVW5917