gmr airports infrastructure ltd share price Directors report


Dear Shareholders,

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

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

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

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

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

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

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

Performance highlights - FY 2021-22

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

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

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

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

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

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

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

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

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

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

Hyderabad Airport Extension of the term of Concession Agreement.

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

• Crete Airport (Greece), Project is fully funded mainly through state grant which is already received. It is a debt free Project. Earthworks are progressing in multiple fronts of runway, apron, terminal building and access roads along with flood protection and drainage works. Approx. 11% financial progress is achieved with completion of approx. 76% of earthworks in airport area and 30% earthworks in access roads as of March 31, 2022.

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

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

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

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

(Rs. in crore)

Particulars March 31,2022 March 31, 2021
Continuing operations
Income
Revenue from operations 4,600.72 3,566.01
Other income 358.44 430.73
Total Income 4,959.16 3,996.74
Expenses
Revenue share paid/ payable to concessionaire grantors 224.02 360.79
Operating and other administrative expenditure 2,274.13 2,417.32
Depreciation and amortization expenses 889.40 886.12
Finance costs 2,018.66 1,803.00
Total expenses 5,406.21 5,467.23
Loss before share of profit/ (loss) of investments accounted for using equity method, exceptional items and tax from continuing operations (447.05) (1,470.49)
Share of profit/ (loss) of investments accounted for using equity method 70.70 (59.09)
Loss before exceptional items and tax from continuing operations (376.35) (1,529.58)
Exceptional items - (loss) (388.26) -
Loss before tax from continuing operations (764.61) (1,529.58)
Tax credit (12.30) (286.32)
Loss after tax from continuing operations (i) (752.31) (1,243.26)
EBITDA from continuing operations 2,102.57 787.90
(Revenue from operations - Revenue share - operating and other admin expenses)
Discontinued operations
Loss from discontinued operations before tax expenses (318.33) (2,160.62)
Tax expenses 60.75 23.89
Loss after tax from discontinued operations (ii) (379.08) (2,184.51)
Total loss after tax for the year (A) (i + ii) (1,131.39) (3,427.77)
(Rs. In Crore)
Particulars March 31,2022 March 31, 2021
Other comprehensive income from continuing operations
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations (101.29) 112.66
Net movement on cash flow hedges (370.00) 91.01
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Re-measurement gains / (losses) on defined benefit plans (net of taxes) (1.80) 1.97
Other comprehensive income for the year from continuing operations, net of tax (B) (473.09) 205.64
Other comprehensive income from discontinued operations
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations 17.57 (8.61)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Re-measurement gains / (losses) on defined benefit plans (net of taxes) (0.57) 0.61
Other comprehensive income for the year from discontinued operations, net of tax (C) 17.00 (8.00)
Other comprehensive income for the year (D = B + C) (456.09) 197.64
Total comprehensive income for the year, net of tax (A+D) (1,587.48) (3,230.13)
Loss for the year (1,131.39) (3,427.77)
a) Attributable to equity holders of the parent (1,023.29) (2,797.28)
b) Attributable to non-controlling interests (108.10) (630.49)
Total comprehensive income (1,587.48) (3,230.13)
a) Attributable to equity holders of the parent (1,226.89) (2,657.64)
b) Attributable to non-controlling interests (360.59) (572.49)
Earnings per equity share (Rs.) from continuing operations (0.98) (1.22)
Earnings per equity share (Rs.) from discontinued operations (0.72) (3.42)
Earnings per equity share (Rs.) from continuing and discontinued operations (1.70) (4.64)

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

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

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

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

There is increase in share of profit from investment in joint venture/ associate mainly due to disruption cause by Covid-19 pendemic in previous year.

b) Standalone financial results

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

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

(Rs. in crore)

Particulars March 31,2022 March 31, 2021
Continuing operations
Revenue from operations 21.33 -
Other operating income 17.73 7.33
Other income 1.00 0.94
Operating and other administrative expenditure 43.97 32.27
Depreciation and amortization expenses 0.91 1.20
Finance costs 78.98 78.32
Loss before exceptional items and tax from continuing operations (83.80) (103.52)
Exceptional items (16.79) (13.06)
Loss before tax from continuing operations (100.59) (116.58)
Tax expense 58.72 -
Loss after tax from continuing operations (i) (159.31) (116.58)
Discontinued operations
Loss from discontinued operations before tax expenses (150.47) (1,169.26)
Tax credit - (3.86)
Loss after tax from discontinued operations (ii) (150.47) (1,165.40)
Total loss after tax for the year (i + ii) (309.78) (1,281.98)
Net surplus / (deficit) in the statement of profit and loss - balance as per last financial statements 2,122.60 (956.34)
Transfer from debenture redemption reserve - 59.49
Re-measurement gains on defined benefit plans (net of taxes) (0.62) 0.55
Transfer on account of redemption of OCDs - 45.92
Transfer from fair valuation through other comprehensive income (FVTOCI) 1,674.97 4,254.96
Transfer on account of composite scheme of arrangement (32.68) -
Surplus available for appropriation 3,454.49 2,122.60
Appropriations - -
Net surplus in the statement of profit or loss 3,454.49 2,122.60
Earnings per equity share (Rs.) from continuing operations (0.26) (0.19)
Earnings per equity share (Rs.) from discontinued operations (0.25) (1.93)
Earnings per equity share (Rs.) from continuing and discontinued operations (0.51) (2.12)

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

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

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

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

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

COVID-19 Impact

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

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

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

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

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

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

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

Dividend / Appropriation to Reserves

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

Reserves

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

(Rs. in crore)
Particulars March 31, 2022 March 31, 2021
General reserve 174.56 174.56
Securities premium account - 10,010.98
Surplus in statement of profit and loss 3,454.49 2,122.60
Capital reserve 141.75 141.75
Foreign currency monetary translation reserve (FCMTR) (20.21) (173.82)
Fair valuation through other comprehensive income (FVTOCI) reserve 6,037.65 (3,143.07)
Equity component of related party loans - 1.24
Total 9,788.24 9,134.24

Composite Scheme of Amalgamation and Arrangement

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

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

Management Discussion and Analysis Report (MDA)

MDA Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI LODR"), is presented in a separate section forming part of the Annual Report.

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

Airport Sector

The Companys airport business comprises of four operating airports viz., Indira Gandhi International Airport at Delhi, Rajiv Gandhi International Airport at Hyderabad & Bidar Airport at Karnataka in India and Mactan Cebu International Airport in Philippines. Further two assets are under construction viz., Greenfield Airports at Mopa, Goa and Crete International Airport in Greece. Also, post signing of the Bhogapuram International Airport (new Vishakhapatnam Airport) concession agreement in June 2020, the Company has been working on various preparatory activities even as the authorities seek clearances to meet their obligations for initiating the construction work.

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

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

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

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

Delhi International Airport Limited (DIAL)

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

Highlights of FY 2021-22:

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

Indian Aviation Sector continued to face disruptions from Covid-19 but amid normalization of consumer sentiment and rationalization of travel restrictions, exhibited tremendous recovery in passenger traffic towards the end of the financial year. The year started with second wave of Covid-19 which led to the reset in passenger traffic level to 10% - 15% of pre-Covid level. With the phase wise capacity deployment in domestic operation, passenger traffic started to pick up in 2nd half of the year though there was temporary setback with the onset of third wave of Covid-19.

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

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

Operational Performance:

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

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

Capacity augmentation initiatives of FY 2021-22

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

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

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

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

Passenger convenience initiatives of FY 2021-22

• Launched Indias first airport Rapid RT PCR testing at COVID testing facility at IGIA.

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

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

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

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

Awards and Accolades of FY 2021-22

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

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

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

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

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

Sustainability Focus

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

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

• DIAL was declared the prestigious Energy Excellent Unit and bestowed with National Energy Leader Award 2021 by CII - Green Business Centre based on the consistent performance of the highest level in the last four years.

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

GMR Hyderabad International Airport Limited (GHIAL)

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

Highlights of FY 2021-22:

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

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

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

Operational Performance:

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

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

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

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

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

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

Capacity augmentation initiatives FY 2021-22

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

> On Airside,

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

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

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

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

• Straight portion of East Pier of about 15,750 sqm has been constructed and is in trails for operational readiness. In addition to enhancing passenger experience, this will add more passenger and retail spaces on the domestic side. Also 3 more contact stands will be made operational.

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

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

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

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

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

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

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

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

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

Passenger convenience initiatives FY 2021-22

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

Highlights from FY 2021-22 include:

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

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

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

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

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

Other Initiatives- Operations

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

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

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

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

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

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

• RGIA Aerodrome license was renewed till March 2024.

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

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

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

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

Awards and Accolades

• Ranked 64th in Skytrax Annual Awards (Moved up by 7 places from 71st) and further to 63rd rank in 2022 (ahead of BOM and BLR), Best Regional Airport in Central Asia & India Award;

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

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

• ACI Voice of Customer Recognition.

• Best Airport Award at Wings India 2022.

<p >Sustainability Focus

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

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

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

• Winner of CIIs National Energy Leader &amp; Energy Excellence Unit Award 2021.

• Received the &quot;Certificate of Merit&quot; at BEEs National Energy Conservation Awards (NECA) 2021.

GMR Goa International Airport Limited (GGIAL)

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

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

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

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

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

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

GMR Megawide Cebu Airport Corporation (GMCAC)

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

Highlights of FY 2021-22:

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

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

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

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

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

In line with our strategy to churn assets and redeploy capital in high growth opportunities, GMR Airports International BV (GAIBV), a stepdown subsidiary of Company holding stake in GMCAC has on September 2, 2022 entered into definitive agreements with Aboitiz InfraCapital Inc (AIC) for sale of stake, subject to necessary customary regulatory approvals. However, we would to operate as a technical services provider to GMCAC until December 2026.

Crete International Airport

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

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

Highlights of FY 2021-22:

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

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

Project funding - The project SPV received equity infusion of &#128; 101.30 Mn on 27th January 2022. With this the project SPV has received entire committed share capital of &#128; 175.50 Mn. SPV has also started receiving Airport Modernization and Development tax (AMDT) from May 2021 onwards and received &#128; 26.08 Mn till March 2022.

Medan Airport

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

Highlights of FY 2021-22:

The initial submission of the bid for an award of the project happened in July 2021. Post that, the top 2 bidders were called for negotiations, which lasted for approximately 3 months until the end of October 2021. The final bid submission was made on the 10th of November 2021, post which the notice of award was issued to GMR Airports Limited on the 23rd of November 2021.

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

Airport Adjacencies:

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

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

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

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

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

Airport Land Development (ALD)

Aerocity Delhi

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

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

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

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

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

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

Aerocity Hyderabad

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

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

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

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

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

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

Aerocity Goa

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

Raxa Security Services Limited (RAXA)

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

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

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

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

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

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

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

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

Consolidated Financial Statements

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

Holding, Subsidiaries, Associate Companies and Joint Ventures

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

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

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

Report on the highlights of performance of subsidiaries, associates and joint ventures and their contribution to the overall performance of the Company has been provided in Form AOC-1 as &quot;Annexure- A&quot; to this Report and therefore not reported here to avoid duplication.

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

Directors Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note no. 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the loss of the Company for the year ended on that date;

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

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and are operating effectively;

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

Corporate Governance

The Company continues to follow the Business Excellence framework, based on the Malcolm Baldrige Model, for continuous improvement in all spheres of its activities. Your Company works towards continuous improvement in governance practices and processes, in compliance with the statutory requirements.

The Report on Corporate Governance as stipulated under relevant provisions of SEBI LODR forms part of the Annual Report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the said Report.

Business Responsibility Report

As stipulated under Regulation 34(2)(f) of SEBI LODR, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report.

Contracts and arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the FY 2021-22 with related parties referred in Section 188(1) of the Companies Act, 2013 were in the ordinary course of business and on arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties referred in Section 188(1) of the Companies Act, 2013 which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Since all the related party transactions were in ordinary course of business and at arms length basis, Form AOC-2 is not applicable.

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

Corporate Social Responsibility (CSR)

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

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

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

• Education

• Health, Hygiene &amp; Sanitation

• Empowerment &amp; Livelihoods

• Community Development

The Company, as per the approved policy, may undertake other need- based initiatives in compliance with Schedule VII to the Companies Act, 2013. For example, in the year 2021-22, the Company (through its subsidiaries) has taken up many relief measures for the Covid affected individuals and families. During the year under review, the Company was not required to spend any amount on CSR as it did not have any profits. Accordingly, it has not spent any amount on CSR activities. However, the Company, through its subsidiaries/ associate companies, spent an amount of 21.04 Crores during the year on CSR activities. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Business Responsibility Report. The Annual Report on CSR activities is annexed as &quot;Annexure D&quot; to this Report.

Risk Management

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

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

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

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

Significant developments during the year under review are as follows:

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

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

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

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

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

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

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

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

Internal Financial Controls

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

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

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

Directors and Key Managerial Personnel

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

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

Mr. Madhva Terdal, who was appointed as the Whole-time Director of the Company for a term of three years with effect from August 8, 2019, upon completion of his tenure on August 7, 2022, ceased to be an Executive Director and continues to serve as a Non-Executive &amp; Non-Independent Director of the Company.

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

Annual performance evaluation of the Board, its Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have been carried out. The performance of the Board and its committees was evaluated based on the criteria like composition and structure, effectiveness of processes, information and functioning etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the Individual Directors on the basis of criteria such as the contribution of the Individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

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

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

Declaration of independence

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 (&quot;Act&quot;) and Regulation 16 of SEBI LODR and there has been no change in the circumstances affecting their status as independent directors of the Company. The Company has also received a declaration from all the Independent Directors that they have registered their names in the Independent Directors Data Bank.

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

Auditors and Auditors Report Statutory Auditors

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

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

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

Cost Auditors

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

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

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

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

Secretarial Auditor

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

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

It may be noted that based on the audited financial statements of the Company as on March 31, 2021, the Company had 7 (seven) material subsidiaries, incorporated in India. However, post effectiveness of the Scheme, which took effect from the Appointed Date of April 01, 2021, the Company has only 2 material subsidiaries i.e. GMR Airports Limited and Delhi International Airport Limited during the year under review.

Secretarial Standards

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

Disclosures:

CSR Committee

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

Audit Committee

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

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

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

Vigil Mechanism

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

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

Meetings of the Board

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

Particulars of Loans, Guarantees and Investments

A statement regarding Loans/ Guarantees given and Investments covered under the provisions of Section 186 of the Companies Act, 2013 is made in the notes to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in &quot;Annexure G&quot; to this report.

Annual Return

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

Particulars of Employees and related disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereto), is attached as &quot;Annexure H&quot; to this Report.

The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Dividend Distribution Policy

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

Developments in Human Resources and Organization Development

The Company has robust process of human resources development which is described in detail in Management Discussion and Analysis section under the heading &quot;Developments in Human Resources and Organization Development at GMR Group&quot;.

Changes in Share capital

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

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

Debentures

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

Foreign Currency Convertible Bonds

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

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

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

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

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

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

The necessary approval for the above split have been obtained.

Environment Protection and Sustainability

Since inception, sustainability has remained at the core of our business strategy. Besides economic performance, safe operations, environment conservation and social well-being have always been at the core of our philosophy of sustainable business. The details of initiatives/ activities on environment protection and sustainability are described in Business Responsibility Report forming part of Annual Report.

Change in Name of the Company

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

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

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

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

Change in the nature of business, if any

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

Significant and Material Orders passed by the Regulators

There are no significant and material orders passed by the Regulators or courts or tribunals impacting the going concern status and Companys operations in future.

Deposits

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

Compliance by Large Corporates:

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

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

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

Proceeding under Insolvency and Bankruptcy Code and One time settlement

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

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

Acknowledgements

Your Directors thank the lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large for their valuable support and co-operation. Your Directors also thank the employees of the Company and its subsidiaries for their continued contribution, commitment and dedication.