GMR Infrastructure Ltd Directors Report.

Dear Shareholders,

The Board of Directors present the 23rd Annual Report together with the audited financial statements of the Company for the financial year (FY) ended March 31, 2019.

Your Company, GMR Infrastructure Limited ("GIL"), is a leading global infrastructure conglomerate with interest in Airports, Energy, Transportation and Urban Infrastructure business sectors in India and few countries overseas. The Company has an Engineering, Procurement and Construction (EPC) business focusing on execution of projects of Group SPVs and external customers and recently GMR led consortium has won Clark International Airports EPC project. The Group has large EPC order book of railway track construction including Dedicated Freight Corridor Project initiated by Government of India. GMR is also developing multi-product Special Investment Regions (SIR) spread across ~2100 acres at Krishnagiri in Tamil Nadu and ~10,400 acres at Kakinada in Andhra Pradesh. The Group has acquired a prominent space in airports sector with more than 26.35% of total countrys passenger traffic being routed through the two airports i.e ‘Indira Gandhi International Airport in New Delhi and ‘Rajiv Gandhi International Airport in Hyderabad managed by the Group, in addition to its presence in Philippines with an operating airport ‘Mactan Cebu International Airport. The Greenfield airport projects under development includes airport at Mopa in Goa and Airport at Heraklion, Crete, Greece. GMR is developing very unique airport cities on the commercial land available around its airports in New Delhi, Hyderabad and Goa. The GMR Group has a diversified portfolio of operational Coal, Gas and Renewable power plants and Hydro projects are under various stages of construction and development.

Performance Highlights – FY 2018-19

Performance Highlights of your Company on consolidated basis for the FY 2018-19:

Value unlocking of Airport Business through strategic partnership to deleverage the balance sheet and paving way for demerger of Airport business. The Group signed a binding term sheet with long term strategic and financial investors viz. Tata sons, GIC Singapore and SSG Capital Management for an investment of र 8,000 Crore. The transaction values Airport business at post money valuation of र 22,475 Crore, including value from earn-outs amounting to र 4,475 Crore;

Passenger Traffic at Delhi International Airport during the FY 2018-19 grew by 5% YoY from 65.7 Mn to 69.2 Mn., Passenger Traffic at Hyderabad International Airport during the FY 2018-19 grew by 17% YoY from 18.3 Mn to 21.4 Mn. Passenger Traffic at CEBU Airport (Philippines) during the FY 2018-19 grew by 15% YoY from 9.97 Mn to 11.51 Mn.;

The Base Airport Charges (BAC) in DIAL implemented from December 2018 onwards provides a strong base of stable and growing Aero revenues;

Airport portfolio continues to grow with addition of new airports at Nagpur, Bhogapuram (Vizag) and Crete (Greece);

In FY 2018-19 the GMR Airport business had a throughput of ~ 102 Mn passengers with 8% growth over FY 2017-18 driving an even stronger growth in Non Aero Revenues of 16% in FY 2018-19 over the FY 2017-18;

With Real estate monetization at Delhi Aerocity establishing new benchmarks in valuation, the Delhi Aerocity is poised to emerge as the new Central Business District for National Capital Region (NCR);

At Hyderabad Airport, GMR has launched GMR Business Park as an integrated office development, spanning ~0.8 Mn Sq. ft. of leasable area. In addition, significant progress was achieved in land monetization, with customers such as Safran, Amazon, etc, in both industrial and warehousing segments;

Improved operating performance in the Energy business. GKEL achieved PLF of 73% in FY 2018-19 as against 61% in FY 2017-18. GWEL achieved PLF of 74% in FY 2018-19 as against 71% in FY 2017-18. Resolution of GMR Rajahmundry Energy Limited through restructuring of loan was achieved;

Stabilizing energy assets through investment arrangement of upto र 226 Crore in GMR Bajoli Holi Hydropower by Tenaga Nasional Berhad;

Value unlocking of energy assets by divestment of PTBSL coal mines in Indonesia and Upper Marsyagadi (Himtal) hydro project in Nepal;

Strong growth in capacity, volumes and revenues at PTGEMS in its Coal Mining operations in Indonesia, during the FY 2018-19;

Kakinada SIR - Port based industrial park in 10,400 acres: The Industrial park spread over in about 8,550 acres of land, MoU has been signed for monetization of 3,100 acres of land;

Development of greenfield commercial port at Kakinada in an area of about 1,950 acres, with an initial capacity of 16MnT.

Financial results – FY 2018-19

a) Consolidated financial results
(र in Crore)
Particulars March 31, 2019 March 31, 2018
Continuing operations
Income
Revenue from operations:
Sales / income from operations (including other operating income and finance income) 7,564.88 8,721.21
Other income 719.84 553.04
Total Income 8,284.72 9,274.25
Expenses
Revenue share paid / payable to concessionaire grantors 1,764.75 1,911.50
Operating and other administrative expenditure 4,105.50 4,623.81
Depreciation and amortization expenses 983.96 1,028.40
Finance cost 2,684.15 2,316.34
Total expenses 9,538.36 9,880.05
(Loss)/ profit before share of (loss) / profit of associate and joint ventures, exceptional items and tax from continuing operations (1,253.64) (605.80)
Share of (loss) / profit of associates and joint ventures (net) (87.89) (431.36)
(Loss) / profit before exceptional items and tax from continuing operations (1,341.53) (1,037.16)
Exceptional items - (loss) / gains (net) (2,212.30) -
(Loss) / profit before tax from continuing operations (3,553.83) (1,037.16)
Tax (credit) / expense (87.42) 45.49
(Loss) / profit after tax from continuing operations (3,466.41) (1,082.65)
EBITDA from continuing Operations (sales/income from operations – Revenue share – Operating and other admin exp) 1,694.64 2,185.90
Discontinued operations
Profit / (loss) from discontinued operations before tax expenses 117.84 (31.96)
Tax expense / (credit) 7.72 (0.02)
Profit / (loss) after tax from discontinued operations 110.12 (31.94)
Total (Loss) / profit after tax for the year (3,356.29) (1,114.59)
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations 163.30 (134.68)
Net movement on cash flow hedges (net of taxes) 12.68 27.09
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Re-measurement (loss) / gain on defined benefit plans (Net of taxes) (2.35) (3.10)
Other comprehensive income for the year, net of tax 173.63 (110.69)
Total comprehensive income for the year, net of tax (3,182.66) (1,225.28)
Total comprehensive income attributable to
a) Equity holders of the parent (3,420.29) (1,482.23)
b) Non-controlling interests 237.63 256.95
Earnings per equity share (र ) from continuing operations (6.14) (2.24)
Earnings per equity share (र ) from discontinued operations 0.19 (0.03)
Earnings per equity share (र ) from continuing and discontinued operations (5.95) (2.27)

FY 2018-19 was very eventful year that witnessed unlocking of value of airport sector through strategic partnership with Tata Group, GIC and SSG Capital and divestment of few non-core assets in energy sector. Aero revenue in Airport sector declined in FY 2018-19 due to fall in aero revenue in DIAL, however the shortfall was compensated by increase in non-aero revenue. During the year there was good growth in energy sector revenues particularly in GKEL and GWEL, but revenue from electrical energy declined significantly due to netting off of revenue and cost on application of Ind AS 115 ‘Revenue from contracts with customers. The revenue from highways and EPC remained stagnant. Consolidated Revenues do not include the revenues of entities which were assessed as jointly controlled entities / JVs under Ind AS, including, GMR Energy Limited (GEL), GMR Kamalanga Energy Limited (GKEL), GMR Warora Energy Limited (GWEL) and Delhi Duty Free Services Private Limited (DDFS). Airport, Energy, Highways, EPC and other segments contributed र 5,253.93 Crore (69.45%), र 593.08 Crore (7.84%), र 570.50 Crore (7.54%), र 904.85 Crore (11.96%) and र 242.52 Crore (3.21%) respectively to the consolidated revenue from operations.

Decrease in revenue share paid / payable to concessionaire grantors was on account of lower revenue from DIAL. Increase in other expenses is primarily due to forex loss, write off advances and donation expense.

b) Standalone financial results

(र in Crore)
Particulars March 31, 2019 March 31, 2018
Revenue from operations 1,101.04 1,106.01
Operating and administrative expenditure (845.19) (811.06)
Other income 47.86 52.35
Finance cost (845.65) (821.61)
Depreciation and amortisation expenses (24.49) (19.06)
(Loss) / profit before exceptional items and tax (566.43) (493.37)
Exceptional Items:
Provision for diminution in value of loans / advances (475.96) (94.17)
(Loss) / profit before tax (1,042.39) (587.54)
Tax credit / (expenses) 8.08 (0.09)
(Loss) / profit for the year (1,034.31) (587.63)
Net surplus / (deficit) in the statement of profit and loss - Balance as per last financial statements 1,123.26 1,710.40
Transfer from / (to) debenture redemption reserve 32.34 -
Re-measurement gain / (loss) on defined benefit plans (net of taxes) 0.21 0.49
Surplus / (Deficit) available for appropriation 121.50 1,123.26
Appropriations - -
Net surplus in the statement of profit and loss 121.50 1,123.26
Earnings per equity share (र ) - Basic and diluted (per equity share of र 1 each) (1.72) (0.98)

The Company has changed its accounting policy, as per Ind-AS 8, with respect to measurement of its Investments in subsidiaries, associates and joint ventures at cost as per Ind-AS 27 "Separate financial statements" to Fair Value basis as per Ind-AS 109 "Financial Instruments".

During the year ended March 31, 2019, the revenue from EPC segment has increased by 4 % from र 736.13 Crore (FY 2017-18) to र 763.04 Crore (FY 2018-19), which was mainly on account of contribution by the ongoing DFCC (Railways) project. Other operating income of the company came down to र 4.91 Crore from र 6.34 Crore on account of reduction in profit on sale of investment and increase in income from leasing equipment.

During the year ended March 31, 2019, based on an internal assessment, the Company has written off loans of र 255.26 Crore and made a provision of र 220.70 Crore, totaling to र 475.96 Crore (March 31, 2018: र 94.17 Crore) towards diminution in value of loans/advances given to group companies which has been disclosed as an exceptional item in the financial statements.

Dividend / Appropriation to Reserves

Your Directors have not recommended any dividend on equity shares for the FY 2018-19.

Reserves

The net movement in the major reserves of the Company on standalone basis for FY 2018-19 and the previous year is as follows:

(र in Crore)
Particulars March 31, 2019 March 31, 2018
Treasury Shares (101.54) (101.54)
General Reserve 174.56 174.56
Securities Premium Account 10,010.98 10,010.98
Surplus in Statement of Profit and Loss 121.50 1,123.26
Debenture Redemption Reserve 94.86 127.20
Capital Reserve 141.75 141.75
Foreign currency monetary translation difference account (68.31) 40.40
Fair valuation through other comprehensive income (‘FVTOCI) reserve 677.84 4,993.65
Equity component of optionally convertible debentures (‘OCDs) 45.92 -
Total 11,097.56 16,510.26

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

Your Companys airport business comprises of three operating airports viz., Indira Gandhi International Airport at Delhi, Rajiv Gandhi International Airport at Hyderabad in India and Mactan Cebu International Airport in Philippines. Further two assets are under development viz., Greenfield Airport at Mopa, Goa and Crete International Airport in Greece where we, along with our Greek partner TERNA Group, have signed Concession Agreement with the local Government. We have also received Letter of Award (LOA) for Brownfield Dr. Babasaheb Ambedkar International Airport, Nagpur and emerged as the highest bidder to develop, operate and manage Greenfield Bhogapuram International Airport in Andhra Pradesh. The airports are housed under your Companys subsidiary GMR Airports Limited (GAL).

Your Companys aviation business also comprises of GMR Aviation Private Limited (GAPL), a 100% subsidiary of the Company, which is operating in the general aviation space.

An overview of these 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 GAL (64%), Airports Authority of India (AAI) (26%) and Fraport AG Frankfurt Airport Services Worldwide (Fraport) (10%). DIAL has entered into a long-term agreement to operate, manage and develop the Indira Gandhi International Airport (IGIA), Delhi.

Highlights of FY 2018-19:

DIAL nearly touched the 70 Mn passenger mark with 69.2 Mn passenger traffic in FY 2018-19, witnessing a growth of 5.5% over previous year with 7.6% growth in international traffic and 4.6% growth in domestic traffic. Slowdown in the months of February 2019 and March 2019 which can be attributed to the stress witnessed in the airlines industry, impacted the overall growth in domestic traffic. During the year, Delhi Airport achieved its highest ever monthly passenger traffic of 6.1 Mn in the month of December 2018. Delhi Airport handled 460,429 Air Traffic Movements (ATMs) and achieved the highest ever per day movements of 1,416 on May 14, 2018. It also achieved another landmark by crossing the 1 Mn MT of cargo in a year and clocked 1.04 MMT with an overall growth of 8.3% over previous year, led by 25% growth in the domestic cargo.

During the FY 2018-19 and after going through a consultative process, considering that DIALs current aeronautical charges for the second control period ending March 31, 2019 had fallen below Base Airport Charges (BAC), AERA allowed DIAL to charge the revised rates equivalent to (BAC +10% of BAC), from December 1, 2018 and revised X-ray baggage charges from February 1, 2019.

DIAL celebrated first anniversary of the reopening of Terminal 2, which has enabled IGI Airport to become the 12th busiest Airport in the World with respect to passenger traffic as recognized by ACI. DIAL also operationalized the Airport Cargo Logistics Center with 100 percent occupancy. The non-aeronautical revenues continued their double digit growth led by commercial non-aero income. With focus on increasing duty free sales, DIAL undertook the complete refresh of its duty free facility to further enhance its offerings and improved the passenger experience.

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

DIAL has initiated expansion of its 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 to 100 Mn passengers annually.

Key Awards and Accolades received in FY 2018-19:

• Awarded the Best Airport in the region in its category in Airport Service Quality by ACI.

• Became the only Indian Airport to be rated as 4 star by Skytrax and ranked as best Airport in Central Asia and number 9 worldwide in 60-70 Mn category.

• Certified as Indias First eAWB360 compliance Airport by International Air Transport Association (IATA).

• Won the Golden Peacock award for sustainability and national training award.

• Received the highest environmental recognition for Airports "Platinum" by ACI for Green Airports.

• Received the Hermes Platinum Award for Social Media Campaign "Creating Tomorrow Together."

• Delhi Cargo Terminal – Celebi received "Best Cold Chain Cargo Terminal of the Year" in Cold Chain Industry Awards by FSC.

• National Award for Excellence 2018 by Confederation of Indian Industry (CII).

• Received the CII National 5S Excellence Award.

• Grow Care Safety Award 2018 in Gold Category.

• Business Process Management (BPM) Asia Achievers Award 2018.

• Received various awards in the Garden Tourism Festival.

• Received Indias Best Airport award organized by Travel Leisure Magazine 2.

• DIAL has added one more feather in its cap by winning an award of Top 25 Innovative Companies in India.

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 entered into a long-term agreement to operate, manage and develop the Rajiv Gandhi International Airport (RGIA), Hyderabad.

Highlights of FY 2018-19:

During the FY 2018-19, RGIA successfully handled over 21.3 Mn passengers along with over 180,000 ATMs. The passenger growth has been impressive with 17% increase YoY, supplemented by a domestic traffic growth of 20% and international traffic growth of 9%. Overall ATM growth has been 21% YoY with domestic ATM growth at 6% and international ATM growth at 24% respectively, YoY.

Presently, RGIA is serving 64 destinations (16 international and 48 domestic) with 18 foreign carriers and 9 domestic carriers. RGIA has witnessed one of the highest percentage growth in passenger traffic and ATMs in the FY 2018-19 amongst all Metro Airports in India.

Further consolidating its position as an air cargo hub in the region, RGIA handled over 148,000 metric tonnes of cargo during the FY 2018-19, resulting in an increase of 8% YoY. The domestic cargo grew by 10% and international cargo grew by 7% YoY.

RGIA has a unique advantage, as it is considered the gateway to South Central India and caters to a large catchment area. With favourable growth in economy and increasing prosperous middle income households, GHIAL remains confident of sustaining the high traffic and business growth witnessed during the past few years.

MAJOR EVENTS AND ACHIEVEMENTS:

Route Development:

During FY 2018-19, a number of new destinations were added to Hyderabad Airports route network both on the domestic as well as the international front. During the period, Flynas started their operations at Hyderabad connecting to Saudi Arabia and Spicejet started daily flights to Bangkok.

On the domestic front, Hyderabad Airport added connectivity to Amritsar, Bhopal, Dehradun, Durgapur, Imphal, Kannur, Port Blair, Vadodara, Udaipur. Under the Government of Indias Regional Connectivity Scheme (RCS), Hyderabad Airport was connected to Nasik.

Airport Expansion:

RGIA has witnessed robust growth of around 20% YoY in the last few years and a large scale expansion of the airport facility has been initiated to increase the annual handling capacity accordingly.

In the intervening period, in an effort to ensure continued growth momentum for the business without compromising on the passenger experience, GHIAL has commissioned dedicated interim terminals for international departures and domestic arrivals. The Interim International Departure Terminal (IIDT) was inaugurated on October 23, 2018 and the Interim Domestic Arrival Terminal (IDAT) was inaugurated on March 23, 2019. With the commissioning of these terminals, Hyderabad Airport now has sufficient spare capacity to meet the capacity demand till the completion of ongoing expansion works.

As part of the capital expansion works, GHIAL commissioned additional capacity both on the landside and airside during FY 2018-19, while the full scale expansion works for the main Passenger Terminal Building (PTB) were initiated.

During the year, GHIAL commissioned 26 new aircraft parking stands towards the east of the PT Building on January 1, 2019. With the addition of these stands, the airport now has 83 parking stands from the earlier 57 (47 remote and 10 aerobridges), thus enhancing the aircraft handling capacity by over 45%. The new stands can hold 22 scheduled Code C aircrafts and 4 Code B aircrafts catering to general aviation or business jets.

To cater to the increased vehicular traffic along with the growing passenger traffic, the arrival and departure ramps at the airports forecourt area were expanded to offer twice the number of vehicle lanes at both levels and the new ramps have now been put to use.

Operations:

In order to provide a unique customer experience, GHIAL is continuously improving the customer offerings through process and infrastructure improvements to enhance throughput and efficiency, introduction of technology driven solutions and change in look and feel of the terminal ambience.

The major initiatives which came to fruition during FY 2018-19 are as follows:

Operationalization and Transition to Interim Facilities

In addition to the newly constructed IIDT and IDAT facilities, during FY 2018-19 a number of other interim capacity enhancement measures were implemented and operationalized, including 20 interim aircraft parking stands which helped to boost the available capacity for base flight departures and peak hour operations.

Enhancing Runway Capacity

During the year, GHIAL obtained re-declaration of capacity of the Main Runway from 33 to 36 hourly air traffic movements, enhancing the number of slots available during peak hours and boosting overall handling capacity.

Night Operations on Secondary Runway

The full length parallel taxiway–cum-secondary runway at the airport was upgraded to handle full scale night operations and following a series of trials, DGCA accorded its formal approval for night operations on the upgraded facility. With this, Hyderabad Airport now offers truly 24x7 operations with the ability to seamlessly transition operations between primary and secondary runways irrespective of time of day.

Automated Tray Retrieval Systems (ATRS)

Introduction of modern Automated Tray Retrieval Systems (ATRS) for hand baggage screening of passengers coupled with the operationalization of countrys first Remote Screening facility helped to bring about significant reduction in security check wait times and improved passenger experience. This initiative helped enhance throughput without having to increase manpower significantly. During the year, all security check lanes in the Domestic Departure area of the terminal have been converted to ATRS, making Hyderabad Airport the first in the country to achieve this feat.

Facial Recognition Based Passenger Processing System

Hyderabad is the first and only airport in the country to start trials of Face Recognition based end-to-end passenger processing systems under DigiYatra. Presently, trials have been running successfully for staff, and the same shall soon be rolled out for passengers.

Hyderabad Airport Metro Link

Government of Telangana announced plans to connect the airport via a high-speed rail link to the heart of the city. This will enhance the airport connectivity and will provide additional mode of transportation for the airport visitors and passengers.

Conversion of Taxiway Center Line Lights to Smart LED

The airport has completed the conversion of 715 Taxiway Center Line lights from conventional Halogen to the innovative and energy efficient Safe LED IQ lamps. The project took a month to complete without any impact to airport operations. With this milestone, Hyderabad International Airport has converted around 58% of Airfield Ground Lighting to LED lamps. Around 80% of the entire lights at the airport is now on LED.

Commercial/Non-aero

GHIAL added 13 new stores by renowned brands such as BIBA, Jockey & Speedo, Almond House, Gadget Studio and Forest Essentials in the Airport Terminal, increasing the range of offerings and choices for the passengers and helping to enhance the non-aeronautical revenues.

During the year under review, GHIAL launched a Rewards & Recognition Programme to create a healthy competition among concessionaires with focus on sales growth and customer service.

Key Awards and Accolades received in FY 2018-19:

• Ranked World #4 in Airport Service Quality (ASQ) survey in the 15-25 MPPA category for 2018

• Won "Best Regional Airport" in Skytrax World Airport Awards 2019, in India and Central Asia

• Won "Best Airport Staff" award by Skytrax World Airport Awards 2019, in India and Central Asia

• Received ACI Asia-Pacific Green Airports Silver Recognition 2019, towards efforts in environmental sustainability (water conservation through rain water harvesting)

• Received ACI Asia-Pacific HR Excellence Bonze Recognition in 2019, towards the organizational efforts in the area of "Change Management"

• Won Excellent Energy Efficient Unit Award by the Confederation of Indian Industry (CII)

• Won ‘Smart Cargo Airport of the Year by Maritime Gateway

• Secured 1st place in ICAIs Excellence in Cost Management for FY 2016-17 in Transportation and Logistics Category

• Won CSR Excellence Award 2018 by Institute of Company Secretaries of India (ICSI)

• Secured 4 star recognition in CII – EHS Excellence Award 2018 by CII

• Won Golden Peacock CSR Award for 2017

• ACI Asia-Pacific Young Executive of the Year 2019 was awarded to Mr. Tasneem Ejaz of RGIA for a research paper on "How airports can understand and capitalize on their passengers needs to advance their strategic vision".

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 a period of 25 years. GMCAC took operational responsibility of the airport in November 2014 and has now been successfully operating the airport for nearly 54 months.

Highlights of FY 2018-19:

GMCAC continues to work with tourism bodies of Philippines and neighboring countries along with travel agents, airlines and other Government bodies to boost tourism in Cebu. Continued focus on South Korea and Japan along with addition of several new routes from China led to total traffic growth of over 15% in 2018.

GMCAC also inaugurated a new international terminal in July 2018 with world class facilities for passengers and state of the art operating equipment. The new Terminal was inaugurated by the President of Phillipines to rave reviews. The growth in revenues due to commissioning of this new terminal has been above expectation till date. GMCAC is now undertaking renovation of domestic terminal and expects to complete it by September 2019. Post renovation, the new terminal will provide for more commercial areas for passengers, better facilities and expand the overall capacity of Terminal 1 to 11 Mn pax from existing 4.5 Mn pax.

GMR Goa International Airport Limited (GGIAL)

GGIAL has been granted exclusive right, license and authority to develop, operate and maintain the Mopa airport at Goa for 40 years with extension option for another 20 years. Government of Goa (GoG) has already provided vacant access and Right of Way (RoW) to GGIAL for more than 99.5% of the land identified for the project.

All Conditions Precedent for the project are completed, Rehabilitation and Resettlement Works for Project Affected Families (PAF) have been completed. Earth works and substructure works for PTB and ATC are in progress. GGIAL is working closely with Government of Goa to resolve the pending appeals on the validity of the environment clearances granted to the project.

Airport Land Development (ALD)

The airport land development business presents an exciting opportunity and is a key value driver for the group that possesses valuable real estate as part of its airport concessions. Aerocity at Delhi is a 230 acre master planned development with presence of 11 reputed hospitality players (more than 4,000 keys) and 1.5 Mn sq. ft. of Office and Retail. Next Phase of development has already been initiated with award of 5 Mn sq. ft. (with an option of additional 5 Mn sq. ft.) at Aerocity to a consortium led by Bharti Realty Limited. The transaction is the largest land deal by value in Delhi-NCR and has set a new benchmark for valuation in the sector. Airport City at Hyderabad is spread over 1,463 acres with an integrated ecosystem comprising commercial offices, retail, entertainment, logistics as well as SEZ. The year marked the launch of GMR Business Park, a world-class integrated office development, spanning ~ 1 Mn sq. ft. of which 0.2 Mn sq. ft. is already operational and another 0.2 Mn. sq. ft. is under construction. With occupants such as Decathlon, Safran and Amazon in retail, industrial and warehousing segments, significant progress has been achieved in land monetization at Hyderabad. Goa airport land development is envisaged as a retail-entertainment destination spread across 232 acres of commercial land at the airport.

Energy Sector

Energy Sector companies are operating around 4,400 MWs of Coal, Gas, Liquid fuel and Renewable power plants in India and around 2,300 MWs of power projects are under various stages of construction and development, besides a pipeline of other projects. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements (PPA).

Following are the major highlights of the Energy Sector:

A. Operational Assets:

1. GMR Warora Energy Limited (GWEL) – 600 MW:

The Plant consists of 2 x 300 MW coal fired units with all associated auxiliaries and Balance of Plant Systems. GWEL has a Coal Supply Agreement with South Eastern Coalfields Limited (SECL) for a total Annual Contracted Quantity (ACQ) of 2.6 Mn Tonnes per annum.

During the year, the Plant has achieved availability of 76% and Gross Plant Load Factor (PLF) of 74%.

Plant achieved lower plant availability and PLF due to severe coal supply shortage across the industry.

We expect the coal supply levels will increase during the year and more coal will be taken through alternative modes like e-auction of coal.

Many favorable verdicts were given for "Change in Law" and "Coal Pass Through" related regulatory issues.

Plant was awarded with many prestigious awards during the year, some of them are as below:

• Awarded with the prestigious "Global performance excellence award-2018- World class" in service category by Asia Pacific Quality Organization (APQO) in the 24th International conference at Abu Dhabi.

• Awarded with "National Award for Excellence in Energy Management" by CII.

• Awarded with "MEDA 13th State Level Award for Excellence in Energy Conservation and Management by Government of Maharashtra".

• Awarded with "Shrestha Suraksha Puraskar Award 2018" by NSCI for effective implementation of Occupational Safety and Health Management System.

• Declared winner of "Golden Peacock Award for Corporate Social Responsibility-2018" for Initiatives in Corporate Social Responsibility.

2. GMR Kamalanga Energy Limited (GKEL) – 1,050 MW:

GKEL, subsidiary of GMR Energy Limited, has developed 1,050 MW (3x350) coal fired power plant at Kamalanga Village, Odisha.

The plant is supplying power to Haryana through PTC India Limited, to Odisha through GRIDCO Limited and to Bihar through Bihar State Power Holding Company Limited.

85% of the capacity is tied-up in long term PPAs.

GKEL has Fuel Supply Agreement (FSA) for 2.14 MTPA firm linkage from Mahanadi Coalfields Limited (MCL). GKEL secured another 1.5 MTPA long-term FSA under SHAKTI linkage auction during the year.

During this period, GKEL achieved availability of 87% and PLF of 73%. Lower Availability and PLF was due to planned maintenance and unsold power on merchant sale.

3. GMR Chhattisgarh Energy Limited (GCEL) – 1,370 MW:

GCEL is a 1,370 MW (2 x 685 MW) pulverized coal- fired super critical technology based plant in Raipur district in the State of Chhattisgarh.

During the year GCEL supplied 500 MW to Gujarat Discom (GUVNL) under short-term case 4 bid PPA for April to Nov-2018. GCEL won a revised bid under same arrangement for 1000 MW and commenced supply from January 2019 onwards.

The Consortium Lenders of GCEL adopted the "Change in Management" as a Resolution Plan (RP) in accordance with the Guidelines issued by Reserve Bank of India.

Accordingly, on June 29, 2019, definitive Share Purchase Agreement has been signed with Adani Power Limited (APL) for the sale of the entire stake 47.62% in GMR Chhattisgarh

Energy Limited (GCEL), held by your Companys wholly owned subsidiary GMR Generation Assets Limited (GGAL).

4. GMR Vemagiri Power Generation Limited (GVPGL) - 370 MW:

GVPGL, a wholly owned subsidiary of GEL, operates a 370 MW natural gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh.

GVPGL did not operate in the last financial year due to scarcity of gas.

Due to addition of Renewable capacities, efforts and discussions with Government is on to operate GVPGL through relaunching of e-RLNG scheme.

5. GMR Rajahmundry Energy Limited (GREL) – 768 MW:

GREL is a 768 MW (2 x 384 MW) combined cycle gas based power project at Rajahmundry, Andhra Pradesh.

GREL has executed a resolution plan with the lenders for the outstanding debt of र 2,353 Crore.

The key features of the Resolution Plan are:

• The existing Debt of र 2,353 Crore has been brought down to a Sustainable Debt of र 1,412 Crore.

• Against above Sustainable debt of र 1,412 Crore, GMR Group has already infused an amount of र 395 Crore towards meeting 20% of Principal towards repayment of the Sustainable Debt and the interest servicing obligations of GREL for the first year.

• This leaves balance outstanding Sustainable debt of र 1,130 Crore carrying a floating rate of 9% p.a repayable over 20 years.

• The Balance Debt of र 941 Crore has been converted into Long Dated Cumulative Redeemable Preference Shares (CRPS) carrying 0.1% coupon rate, which is repayable from 17th to the 20th year.

6. Barge mounted Power Plant of GMR Energy Limited (GEL), Kakinada:

GEL owns the 220 MW combined cycle barge mounted power plant at Kakinada, Andhra Pradesh. There was no generation of power by the barge mounted power plant during the year ended March 31, 2019 on account of non- availability of gas.

Plant is kept under preservation since March 2013. Preservation methods were adopted based on Original Equipment Manufacturers (OEM) procedures.

Efforts are ongoing to find a suitable buyer for the asset.

7. GMR Power Corporation Limited (GPCL), Chennai:

GPCL, a subsidiary of GEL, owned the 200 MW diesel powered power plant and was selling power to Tamil Nadu Generation and Distribution Corporation.

Plant had long term PPA with TANGEDCO for 15 years, which was extended for additional period of one year. PPA has since expired. The plant was in preservation mode.

GPCL Plant has been dismantled and the land handed over to TANGEDCO.

8. GMR Gujarat Solar Power Limited (GGSPL), Charanka Village, Gujarat:

GGSPL, a wholly owned subsidiary of GEL, operates 25 MW Solar power plant at Charanka village, Patan district, Gujarat. GGSPL has entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for the supply of entire power generation. GGSPL attained commercial operation on March 4, 2012. M/s. Solarig Gensol has been awarded O&M contract of the Plant for a period of 5 years. Plant achieved a gross PLF of 17.7% for FY 2018-19 and recorded operating revenue (post straight lining) of र 36.38 Crore during this period. Plant has maintained ISO 9001, ISO 14001, OHSAS 18001 certifications since June 2015.

9. GMR Rajam Solar Power Private Limited (GRSPPL), Rajam:

GRSPPL, a wholly owned subsidiary of GEL, commissioned a 1 MW Solar power plant in Rajam, Andhra Pradesh in January 2016. The Company has signed a 25 year PPA with both GMR Institute of Technology (700KW) and GMR Varalakshmi Care Hospital (300KW) for the sale of power generated. M/s Enerpac has been awarded O&M contract for the Plant for a period of 5 years. Plant achieved gross PLF of 14.4% for FY 2018-19 and recorded revenue of र 0.87 Crore during the period.

10 GMR Generation Assets Limited (Formerly GMR Renewable Energy Limited) (GGAL), Kutch:

GGAL, a wholly owned subsidiary of your Company, commissioned a 2.1 MW wind based power plant at Moti Sindhodi Village, Kutch District, Gujarat in July 2011. GGAL has signed a 25 year PPA with Gujarat Urja Vikas Nigam Limited ("GUVNL") with respect to the entire power generated from the Plant. M/s. Suzlon has been awarded O&M contract of the Plant for period of 5 years.

11. GMR Power Infra Limited (GPIL), Tamil Nadu:

GPIL, a wholly owned subsidiary of your Company, commissioned a 1.25 MW wind based power plant at Muthayampatty Village, Tirupur District, Tamil Nadu in December 2011. GPIL has signed a 20 year PPA with TANGEDCO with respect to the entire power generated from the Plant. M/s. Suzlon has been awarded O&M contract of the Plant for period of 5 years.

B. Projects:

1. GMR Bajoli Holi Hydropower Private Limited (GBHHPL) - 180 MW:

GBHHPL, a subsidiary of GEL, is implementing 180 MW hydro power plant on the river Ravi at Chamba District, Himachal Pradesh.

GBHHPL has already achieved financial closure and tied-up the debt requirement of र 1,380 Crore.

GBHHPL had also executed the Connectivity Agreement with HP Power Transmission Corporation Limited and Long Term

• Access Agreement with Power Grid Corporation of India Limited (PGCIL) for evacuating power outside Himachal Pradesh.

The construction works of the project including HRT excavation, Dam Concreting and Power House Concreting along with E&M works are in full swing. Majority of the underground works like Surge/Pressure Shaft, Tunneling etc. have been completed or are in advanced stage of completion. Overall progress of more than 80% has been achieved till end of FY 2018-19.

2. GMR Upper Karnali Hydro Power Public Limited (GUKPL) – 900 MW:

GUKPL, a subsidiary of GEL, is developing 900 MW Upper Karnali Hydroelectric Project (HEP) located on river Karnali in Dailekh, Surkhet and Achham Districts of Nepal.

Post execution of Project Development Agreement (PDA), several key activities have been completed. Technical design of the Project has been finalized post detailed technical appraisal by a seven member Panel of Experts (empaneled with IFC) and Hydraulic model studies.

An MoU for sale of power to Bangladesh was executed in April 2017. The PPA negotiations for the same are in advance stage and the PPA signing is expected in the next FY 2019-20. EPC Bids have been received and first round of technical discussions have been completed.

Total land identified for the Project comprises of forest land and private land. As for private land, negotiation has been completed and MoU has been executed with Rehabilitation Action Plan (RAP) committees for acquisition and approximately 7.4 Ha of private land was acquired till March 2019. Whereas for forest land, Deed of Agreement for forest land was executed with Department of Forest (DoF), Government of Nepal (GoN) in October 2017 post cabinet approval and tree cutting process initiated. 12.45 Ha of forest land has been already acquired for infra works and tree cutting work completed.

Power Evacuation is proposed through 400KV D/C transmission line from Bus bar of project to Bareilly Pooling point of PGCIL in Uttar Pradesh, India. Nepal portion transmission line (from projects Bus bar up to Indo-Nepal border) is to be developed by Karnali Transmission Company Private Limited (KTCPL), a GMR Group Company and Indian portion up to Bareilly will be developed by GoI. Post execution of the Power Trade Agreement (PTA) between GoI and GoN and the SAARC energy pact between SAARC nations, revised cross border guidelines has been notified by GoI and cross border trade of electricity regulation has been notified by CERC.

3. GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL) - 300 MW:

GBHPL, a subsidiary of GEL, is in the process of developing a 300 MW hydroelectric power plant on Alaknanda river in the Chamoli District of Uttarakhand State. The project has received all major statutory clearances like Environmental and Techno economic concurrence from Central Electricity Authority (CEA). The project construction is held up on account of stay order issued by the Honble Supreme Court on 24 hydro power projects in the State of Uttarakhand, vide its order dated May 7, 2014 and the said order is in force till date.

The Environmental Clearance (EC) of the project was granted by Ministry of Environment, Forest & Climate Change (MoEF & CC) on March 12, 2008 which was valid for 10 years from the date of issue. Considering the delay in commencement of construction, we placed application with MoEF & CC for extension of validity of EC. However, the application was considered by Expert Appraisal Committee (EAC) of MoEF & CC during 12th EAC meeting held on March 28, 2018 and the EAC considered the grant of extension of validity of EC accorded earlier, but as the case is sub-judice before Honble Supreme Court, EAC deferred the proposal till the final order of the court in this regard.

4. Himtal Hydropower Company Private Limited (HHCPL) – 600 MW:

HHCPL, a subsidiary of GEL, is developing a 600 MW Upper Marsyangdi-2 Hydroelectric Power Project on the river Marsyangdi in Lamjung and Manang Districts of Nepal.

Binding documentations had been executed for 100% stake sale with Chinese and Nepalese investors on an Enterprise Value basis for which Share Purchase Agreement (SPA) had been signed on May 5, 2018.

97% stake sale has been completed in FY 2018-19.

5. GMR Londa Hydropower Private Limited (GLHPPL) - 225 MW:

GLHPPL, a subsidiary of GGAL, is developing a 225 MW project in East Kameng district in Arunachal Pradesh. The Detailed Project Report (DPR) has been prepared and has received techno-economic concurrence from the CEA. The Expert Appraisal Committee (EAC) of Ministry of Environment, Forest and Climate Change (MoEF & CC) has recommended Environmental Clearance and accordingly MoEF & CC had issued in-principle clearance to this project. However, formal Environmental Clearance shall be granted by MoEF & CC after obtaining the Forest- stage-I clearance. Defence clearance for setting up the project has been received from Ministry of Defence, Government of India. The forest land diversion proposal is under scrutiny of MoEF & CC.

C. Mining Assets:

1. PT Barasentosa Lestari, (PTBSL):

PTBSL has coal mine in South Sumatra Province with more than 393 MT Coal Resources in ~23,300 Hectares and total mineable reserves of about 195 Mn Metric Ton (MMT). A conditional share purchase agreement (CSPA) was signed with PT Golden Energy Mines Tbk (PT GEMS) on May 12, 2017 for sale of PTBSL. PT GEMS acquired PT BSL and the transaction was successfully completed in September 2018.

2. PT Golden Energy Mines Tbk (PT GEMS):

Group through its overseas subsidiary, GMR Coal Resources Pte. Limited, holds 30% stake in PT GEMS, a group company of Sinarmas Group, Indonesia. PT GEMS, a limited liability company, is listed on the Indonesia Stock Exchange. PT GEMS is carrying out mining operations in Indonesia through its subsidiaries which own coal mining concessions in South Kalimantan, Central Kalimantan and Sumatra. PT GEMS is also involved in coal trading through its subsidiaries. Coal mines owned by PT GEMS and its subsidiaries have total resources of more than 2.0 billion tons and Joint Ore Reserves Committee (JORC) certified reserves of more than 620 MT of thermal coal. GMR Group has a Coal off take Agreement with PT GEMS which entitles GMR to off take coal for 25 years. GEMS earned a profit after tax of USD 100 Mn during 2018. Out of 2018 profits, GEMS has declared the interim dividend of USD 35 Mn in 2018. The Coal Supply Agreement (CSA) with GEMS became operational from November 2017, pursuant to the SGX approval in August 2017. Till date the coal offtake under CSA is 1.37 Mt.

Transportation Highways

GMR Highways Limited, a subsidiary of your Company, is one of the leading highways developers in India with 6 operating highways in its portfolio. During FY 2018-19, the focus was on cash flow improvement and resolving the pending arbitration claims to contest undue policy factors which have impacted the projects adversely. Sufficient progress was made in this regard.

Urban Infrastructure

The Group is developing a 2,100 acre multi product Special Investment Region (SIR) at Krishnagiri, near Hosur in Tamil Nadu and 10,400 acre Port- based multi-product SIR at Kakinada, Andhra Pradesh.

Krishnagiri SIR

GMR Group, with an objective of building world class industrial infrastructure in India, is setting up an SIR at Hosur, Tamil Nadu, just 45 kms from Electronic City, Bengaluru. The location provides unique advantage of multi-modal connectivity with National and State Highways and a railway line running alongside. Krishnagiri SIR plans to house the following industrial clusters:

Automotive & Ancillary

Defence and Aerospace

Precision Engineering

Logistics and Warehousing

Electronics Product Manufacturing & Electrical

Textile and Food Processing

• Currently, about 275 Acres is being developed as Phase 1A.

Project Progress:

GKSIR is actively pursuing several leads both within India and abroad in Auto Components, Aerospace & Defence, Precision Engineering, Logistics and Warehousing etc. and are on the verge of signing up with a few clients soon. The laying of foundation stone by the Honble. Chief Minister of Tamil Nadu last year has given a boost to the project. The Company has received all approvals like Environmental Clearance from MoEF, Consent to Establish from TNPCB, Planning Approval from state Town Planning Authority (DTCP), trunk infra like power and water etc. GKSIR started the infrastructure development works in Phase 1A like site levelling, road works, culverts, street lighting etc. Further, an MoU has been signed with TANGEDCO for setting up 230 KV substation within the SIR. In June, 2019 the test charging of the sub-station was completed successfully and the commissioning is expected shortly. Also, civil works for the 33KV sub-station are under progress within Phase 1A. These developments have also been instrumental in attracting many Indian and International companies for setting-up their manufacturing facilities as part of their future expansion plans. The Company is currently in advanced stages of discussion with a few potential clients to lease land in the SIR.

Kakinada SEZ/ SIR

GMR Group owns 51% in Kakinada SEZ Limited (KSEZ), which is developing Kakinada SEZ / SIR in the State of Andhra Pradesh in proximity to the cities of Kakinada and Visakhapatnam. It is situated in the Government of Andhra Pradeshs PCPIR (Petroleum Chemical Petrochemical Investments Region) and hydro- carbon rich East Godavari District thereby providing excellent potential for its development, as a future hub for Refinery and Petrochemical based industries. With an area spanning over 10,400 acres, Kakinada SEZ / SIR will be a self-contained Port-based Industrial park with ideally designed core infrastructure, industrial common infrastructure, business facilitation infrastructure and social infrastructure.

Project Progress:

KSEZ has signed Concession Agreement with Government of Andhra Pradesh on November 21, 2018 for developing Commercial Port on DBFOT basis for which foundation stone has been laid by the then Chief Minister of Andhra Pradesh Shri N Chandra Babu Naidu.

Government of Andhra Pradesh has signed an MoU with Haldia Petrochemicals Limited on January 4, 2019 for development of Integrated Crude to Chemicals Manufacturing complex producing Gasoline,Diesel,Paraxylene along with other Polymer and Petrochemical products in suitable land parcel (approximately 2,500 acres) within Kakinada SEZ. Investment of the project shall be approximately र 62,714 Crore and is expected to generate 500,000 direct and indirect new jobs including those in the downstream industries.

Currently, KSEZ has generated employment approximately for 1,000 people through running units such as Nekkanti Sea foods, Pals Plush and Rural BPO. Also KSEZ attracted investments from Sea food processing plants (Sandhya Aqua, Devi fisheries Limited, Continental fisheries Limited) and is expected to generate employment to approximately 1,500 locals in the next one year.

GMR has signed an MoU with Andhra Pradesh Gas Development Corporation (APGDC) on October 9, 2018. APGDC shall provide piped natural gas to the Industrial customers of KSEZ. Necessary infrastructure shall be built by APGDC at their cost. Availability of piped natural gas in KSEZ is a differentiator, which makes KSEZ competitive over other Industrial parks.

A 900 KLD water treatment plant has been commissioned at the project site and is supplying water to clients. The project has been getting several enquiries from companies in the space of oil and gas, glass and ceramics, chemicals, petrochemicals and associated downstream industries etc. over past one year.

EPC

Pursuant to the strategic decision taken to pursue EPC opportunities outside GMR Group and consequent to the Groups entry into Railway Projects during FY 2013-14, significant progress has been achieved in the construction of 2 Dedicated Freight Corridor Corporation (DFCC) projects (201 and 202) in the State of Uttar Pradesh and package 301 and 302 in the States of Haryana, Uttar Pradesh and Punjab. Track laying work also commenced in 201 and 202. The Company also achieved substantial completion of two other smaller Rail Vikas Nigam Limited (RVNL) projects in the States of Andhra Pradesh and Uttar Pradesh that were awarded in previous years.

RAXA

Raxa Security Services Limited, an ISO 9001:2015 and 18788:2015 certified company established in July 2005, provides Integrated Security solutions and technical security to industrial and business establishments. To enable the delivery of quality services, a State-of-the-Art Security Training Academy was established with best in class training and administrative infrastructure on the outskirts of Bengaluru. Raxa employs over 5,000 personnel and has operations across 18 states. Adding to its repertoire of several prestigious clients, Raxa bagged contracts of some more premier clients such as Biocon, Bosch, Kia Motors and others. It also provided security services to important events such as the IPL matches, Airtel – Hyderabad and Tata Steel – Kolkata marathon runs and the Sunburn DJ Snake performances at Delhi and Hyderabad. For the first time, Raxa conducted a one – year ‘Assignment Manager cum Security Officer course for graduate students from Odisha under DDUGKY (Deen Dayal Upadhyaya Grameen Kaushalya Yojana) – ORMAS (Odisha Rural Development and Marketing Society) scheme. During the year, it also conducted its short-term Advance Security Management Course for several senior security professionals from Corporation Bank, Syndicate Bank and Bharat Diamond Bourse as well as senior army personnel employed with corporates/ looking for corporate employment.

GMR Aviation Private Limited (GAPL)

GAPL owns and operates one of the best fleet in the country and addresses the growing need for charter services. In order to boost revenues and rationalize overhead costs, GAPL has entered into a management contract with Jet Set Go – a general aviation fleet aggregator, commonly referred to as the "Uber of the Skies". As per the agreement, Jet Set Go has taken responsibility for operations and sourcing of external clients for the use of our aircrafts and the business has shown marked improvement over the past years with 2 aircrafts recording the highest number of hours flown on an annual basis. All maintenance contracts have also been renegotiated leading to a reduction in costs. We are confident that GAPL will continue on the turnaround path.

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 is provided in the Annual Report.

Holding, Subsidiaries, Associate Companies and Joint Ventures

GMR Enterprises Private Limited remains the holding company of your Company.

As on March 31, 2019, the Company has 113 subsidiary companies apart from 39 direct associate companies and joint ventures. During the year under review, the entities listed below have become or ceased to be Companys subsidiaries or associate companies/ JVs. The Policy for determining material subsidiaries may be accessed on the Companys website at the link: https://investor.gmrgroup.in/policies. The complete list of subsidiary companies and associate companies (including joint ventures) as on March 31, 2019 is provided in Annexure ‘F to this Report.

GMR Airports International BV and GMR Logistics Park Private Limited became subsidiaries of the Company during the year under review. Further, GMR Infrastructure Airports (Mauritius) Limited, Himtal Hydropower Company Private Limited, PT Unsoco, PT Dwikarya Sejati Utama, PT Duta Sarana Internusa, PT Barasentosa Lestari and Asia Pacific Flight Training Academy Limited ceased to be subsidiaries during the FY 2018-19.

During the year under review, GMR Highway Projects Private Limited (GHPPL) ceased to be a subsidiary of the Company after being struck off from the Register of Companies pursuant to an application made by GHPPL. Further, GMR Hosur EMC Limited ceased to be a subsidiary of the Company, pursuant to amalgamation with its holding company GMR Krishnagiri SIR Limited, also a subsidiary of your Company.

Heraklion Crete International Airport Societe Anonyme, DIGI Yatra Foundation, Mactan Travel Retail Group Co., SSP-Mactan Cebu Corporation, GMR Tenaga Operations and Maintenance Private Limited and Megawide GMR Construction JV, Inc. became Associates of your Company.

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 Annexure ‘A to this Report.

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, 2019, 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, 2019 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 2018-19 with related parties 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 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://investor.gmrgroup.in/ policies. Your Directors draw attention of the members to Note no. 34 to the standalone financial statements which sets out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which was approved by the Board. The CSR Policy may be accessed on the Companys website at the link: https://investor.gmrgroup. in/policies.

The Company has identified three focus areas towards the community service / CSR activities, which are as under:

Education

Health, Hygiene & Sanitation

Empowerment & Livelihoods

During the year, 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, directly. However, the Company, through its subsidiaries/ associate companies and group companies, spent an amount of र 36.86 Crore during the year. 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 along with CSR policy is annexed as Annexure ‘B to this Report.

Risk Management

The GMR Groups Enterprise Risk Management (ERM) philosophy is "To integrate the process for managing risk across GMR Group and throughout its businesses and lifecycle to enable protection and enhancement of stakeholder value." With significant changes in business environment over the last couple of years, your Companys businesses face emerging risks that require effective risk management framework and dedicated resources to implement the framework.

Your Companys ERM framework follows the current best practices in order to achieve Companys objectives.

Significant developments during the year under review are as follows:

Risk assessment was carried out in detail at bid stage for Sofia International Airport (Bulgaria), Nagpur Airport, Lucknow Airport, Jaipur Airport, Ahmedabad Airport, Mangalore Airport, Trivandrum Airport, Guwahati Airport and Bhogapuram International Airport (Andhra Pradesh). Risk assessment of key business assumptions made for each of the bids was carried out by ERM for enabling informed decision-making;

ERM has continued to carry out regular risk assessment of ongoing railway projects under DFCC in coordination with project management teams.

The Group is working on several fronts to address the financing risks associated with the nature of its business.

The Company is focused on unlocking the value potential of its Airports business. In addition, the management has continued thrust on greater cash flow from operations with greater profitability focus, asset monetisation and collection of regulatory receivables. Taking into account the stress in the banking sector, the Group, where market conditions are favourable, has decided to raise bonds for its financing needs as against depending on loans from the banks. We have successfully done the same at both the Delhi and Hyderabad airport operations. The Company is also working closely with lenders for two of our stressed energy projects which have undergone Strategic Debt Restructuring, to address issues keeping in view the most recent RBI guidelines.

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 risk management committee has been formed during the year 2019.

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

Internal Financial Controls

The Company has adopted policies and procedures including the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures under the Companies Act, 2013.

During the year under review, such controls were reviewed and tested by the internal audit department 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 for the matter qualified by statutory auditor in audit report on internal financial controls for both standalone and consolidated financial statements.

Directors and Key Managerial Personnel

During the year under review, Mr. Vikas Deep Gupta was regularised as Director from the position of Additional Director at the 22nd Annual General Meeting of the Company. Further, Mr. Vikas Deep Gupta resigned from the position of Director of the Company with effect from closure of business hours of December 20, 2018.

Mr. Madhva Bhimacharya Terdal, Chief Financial Officer of the Company resigned from his position with effect from closing of business hours on February 14, 2019 and Mr. Saurabh Chawla was appointed as Executive Director- Finance and Strategy in the category of Chief Financial Officer with effect from February 15, 2019.

With effect from August 8, 2019, Mr. Madhva Bhimacharya Terdal was appointed as an Additional Director and Whole-Time Director subject to the approval of shareholders at the ensuing Annual General Meeting.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. B.V.N. Rao, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible has offered himself for re-appointment.

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 the 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 Companys Nomination and Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is annexed as Annexure ‘C to this report.

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 and Regulation 16 of SEBI LODR and there has been no change in the circumstances affecting their status as Independent Directors of the Company.

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

As per sub section (2) of Section 139 of the Companies Act, 2013, a Company can appoint a firm of auditors for a maximum of two terms of five years each and as per the first proviso a firm of auditors which has completed two terms of five years each cannot be re-appointed unless a period of five years has elapsed since the end of the previous term. Accordingly, S. R. Batliboi & Associates LLP, Chartered Accountants who have completed 10 years of service to the Company cannot be continued further.

The Board at its meeting held on August 8, 2019, has recommended the appointment of Walker Chandiok Co LLP, Chartered Accountants as Statutory Auditors of the Company and to hold office for a period of 5 consecutive years from the conclusion of the 23rd AGM till the conclusion of the 28th AGM.

Your Company has obtained consent of Walker Chandiok Co LLP and received a certificate in accordance with Section 139, 141 and other applicable provisions of the Act to the effect that their appointment, if made, shall be in accordance with the conditions prescribed and that they are eligible to hold office as Statutory Auditors of the Company.

Statutory Auditors Qualification / Comment on the Companys Standalone Financial Statements

1) As detailed in note 5(5) to the accompanying standalone Ind AS financial statements for the year ended March 31, 2019, GMR Energy Limited (‘GEL), GMR Vemagiri Power Generation Limited (‘GVPGL) and GMR Rajahmundry Energy Limited (‘GREL) have ceased operations and have been incurring significant losses with a consequential erosion of net worth resulting from the continued unavailability of adequate supply of natural gas. Further, GREL has rescheduled the repayment of project loans due to implementation of the Strategic Debt Restructuring Scheme to convert part of the debt outstanding into equity and has signed a Resolution Plan with the lenders to restructure its debt obligations during the year. The carrying value of the investments/obligations in these entities is significantly dependent on the achievement of key assumptions around availability of natural gas, future tariff and the outcome of the sale of the Barge mounted power plant. Accordingly, we are unable to comment on the carrying value of the investments (including advances)/ obligations in these entities as at March 31, 2019. In respect of the above matter, our audit report for the year ended March 31, 2018 was also similarly qualified.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Standalone Financial Statements

As mentioned in Note no. 5(5) of Standalone Financial Statements, the management is evaluating various approaches / alternatives to deal with the situation and is confident that Government of lndia (‘Gol) would take further necessary steps / initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. The management has also carried out a valuation assessment of GVPGL and GREL during the year ended March 31, 2019 which includes certain assumptions relating to availability and pricing of domestic and imported gas, future tariff, tying up of PPA realization of claims for losses incurred in earlier periods from the customer and other operating parameters, which it believes reasonably reflect the future expectations from these projects. The business plan of GREL considered for valuation assessment has been approved by the consortium of lenders at the time of execution of the resolution plan. The management will monitor these aspects closely and take actions as are considered appropriate and is confident that these gas based entities will be able to generate sufficient profits in future years and meet their financial obligations as they arise. The Group has provided for its investment in full in GREL and the management is confident that no further loss on fair valuation would arise on the implementation of the resolution plan with the lenders. Based on the aforementioned reasons and business plans the view that the carrying value of the investment of GEL and GVPGL as at March 31, 2019 is appropriate.

Statutory Auditors Qualification / Comment on the Companys Standalone Financial Statement

2) The Companys internal financial control with regard to assessment of carrying value of investments in certain subsidiaries, joint ventures and associates as more fully explained in note 5(5) to the standalone Ind AS financial statements were not operating effectively and could potentially result in the Company not providing for adjustments that may be required to be made to the carrying value of such investments.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Standalone Financial Statement

Qualification in the report on internal financial controls over financial reporting regarding assessment of carrying value of investments in certain subsidiaries, joint ventures and associates – The Group has a robust system in place to assess the appropriateness of the carrying value of its investments, including testing for impairments. Managements view on the instant cases are explained in the para 1 above.

Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

1) As detailed in note 8B(m)(ii) and 8B(m)(v) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, GMR Chhattisgarh Energy Limited (‘GCEL) and certain other entities have been incurring losses for reasons as more fully discussed in the aforesaid notes. Based on the valuation assessment carried out by an independent expert during the year ended March 31, 2018, there existed a further diminution in the value of र 2,250.00 crore for the Groups investment in GCEL and certain other entities which was not accounted by the management during the year ended March 31, 2018 and has been charged in the statement of profit and loss in the current year. In our opinion, the aforesaid accounting treatment is not in accordance with the relevant accounting standards. Had the management provided for the aforesaid diminution in the previous year, the loss after tax and minority interest for the year ended March 31, 2019, would have been lower by र 2,250.00 crore and the loss after tax and minority interest for the year ended March 31, 2018, would have been higher by र 2,250.00 crore with no consequential impact on the consolidated reserves as at March 31, 2019.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

As detailed in note 8B(m)(ii) and 8B(m)(v) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, the Management has accounted for an impairment loss of र 969.58 crore in the value of Groups investment in GCEL and र 1,242.72 crore in the value of Groups investment in GEL and its subsidiaries/joint ventures which has been disclosed as an exceptional item in the consolidated financial results of the Group for the year ended March 31, 2019. Further the Group has accounted र 515.67 crore as its share of loss of associates and joint venture during the year ended March 31, 2019.

The management of the Group, including the lenders who also collectively are the majority shareholders, have initiated a process for ‘change of control in last year for GMR Chhattisgarh Energy Limited (‘GCEL), which entails sale of up to 100% equity stake of GCEL. The process is in an advanced stage and is expected that the process of change in control would be completed in due course. The management has fully provided for the value of equity investment in GCEL and did not foresee any further obligation in GCEL due to change in control.

Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

2) As detailed in note 8B(m)(iv) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, GMR Energy Limited (‘GEL), GMR Vemagiri Power Generation Limited (‘GVPGL) and GMR Rajahmundry Energy Limited (‘GREL) have ceased operations and have been incurring significant losses with a consequential erosion of net worth resulting from the unavailability of adequate supply of natural gas. Further, GREL has rescheduled the repayment of project loans due to implementation of the Strategic Debt Restructuring Scheme to convert part of the debt outstanding into equity and has signed a Resolution Plan with the lenders to restructure its debt obligations during the year. Continued uncertainty exists as to the availability of adequate supply of natural gas which is necessary to conduct operations by GEL, GVPGL and GREL in the future. The carrying value of the investments / obligations in GEL, GVPGL and GREL is significantly dependent on the achievement of key assumptions around availability of natural gas, future tariff and the outcome of the sale of the Barge mounted power plant. Accordingly, we are unable to comment on the carrying value of the Groups assets (including advances)/ obligations in these entities as at March 31, 2019.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

As detailed in note 8B(m)(iv) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, the management of the Group is evaluating various approaches / alternatives to deal with the situation and is confident that Government of lndia (‘Gol) would take further necessary steps / initiatives in this regard to improve the situation regarding availability of natural gas from alternate sources in the foreseeable future. The management of the Group carried out a valuation assessment of GVPGL and GREL during the year ended March 31, 2019 which includes certain assumptions relating to availability and pricing of domestic and imported gas, future tariff, tying up of PPA realization of claims for losses incurred in earlier periods from the customer and other operating parameters, which it believes reasonably reflect the future expectations from these projects. The business plan of GREL considered for valuation assessment has been approved by the consortium of lenders at the time of execution of the resolution plan. The GREL consortium of lenders have decided to implement the resolution plan which has been approved by all the lenders and accordingly the lenders have restructured the debt. Additionally based on the resolution plan, the Group has accounted for waiver/reduction of accrued interest/penal interest.

The management of the Group will monitor these aspects closely and take actions as are considered appropriate and is confident that these gas based entities will be able to generate sufficient profits in future years and meet their financial obligations as they arise. The Group has provided for its investment in full in GREL and the management is confident that no further impairment would arise on the implementation of the resolution plan with the lenders. Based on the aforementioned reasons and business plans, the management is of the view that the carrying value of the investment of GEL and GVPGL as at March 31, 2019 is appropriate.

Further, mangement is in the process of identifying the buyer for sale of barge plant in GEL.

Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

3) As detailed in note 45(xii) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, the Group has acquired the Class A Compulsory Convertible Preference Shares (‘CCPS) of GMR Airport Limited (‘GAL), a subsidiary of the Group for an additional consideration of र 3,560.00 crore from Private Equity Investors as per the settlement agreement entered during the year ended March 31, 2019. The said CCPS were converted into equity shares of an equivalent amount as per the investor agreements. The aforesaid additional settlement consideration of र 3,560.00 crore paid to Private Equity Investors has been considered as recoverable and recognised as other financial assets based on proposed sale of such equity shares to the proposed investors as detailed in note 45(xvii) to the accompanying consolidated Ind AS financial statements. The transaction towards sale of such equity shares is subject to regulatory, other approvals and lenders consent and such approvals are pending as at March 31, 2019. In our opinion, the aforesaid accounting treatment is not in accordance with the relevant accounting standards. Had the management not accounted for the aforesaid proposed sale transaction other equity would have been lower by र 3,560.00 crore and other financial assets would have been lower by र 3,560.00 crore with a consequential impact on segment assets of Airport sector as at March 31, 2019.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

As detailed in note 45(xii) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, The Group entered into a binding term sheet with Tata Group "Tata", Singapores sovereign wealth fund, an affiliate of GIC, "GIC" and SSG Capital Management "SSG" ("Investors") whereby the investors will acquire equity stake in GMR Airports Limiteds (‘GAL) assets on a fully diluted basis for a consideration of र 8,000 Crore through issuance of equity shares of GAL of र 1,000 Crore and purchase of GALs equity shares held by the Group of र 7,000 Crore. The management is in the process of executing definitive agreement with investors for stake sale in GAL. Management has considered the aforesaid additional obligation as recoverable from the prospective investors and have recognized the same as a financial asset in its consolidated financial statements.

Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

4) As detailed in note 36(a) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, the tax authorities of Maldives have disputed certain transactions not considered by GMR Male International Airport Private Limited (‘GMIAL), a subsidiary of the Company, in the computation of business profit taxes and withholding tax and have issued notice of tax assessments together with the applicable fines and penalties. In the absence of comprehensive analysis on the above tax exposures, we are unable to determine whether any adjustments to provision for tax with consequential impact on reserves and surplus may be necessary to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

As detailed in note 36(a) to the accompanying consolidated Ind AS financial statements for the year ended March 31, 2019, GMR Male International Airport Private Limited (‘GMIAL), a subsidiary of the Company entered into an agreement on June 28, 2010 with Maldives Airports Company Limited (‘MACL) and Ministry of Finance and Treasury (‘MoFT), Republic of Maldives, for the Rehabilitation, Expansion, Modernization, Operation and Maintenance of Male International Airport (‘MIA) for a period of 25 years ("the Concession Agreement"). On November 27, 2012, MACL and MoFT issued notices to GMIAL stating that the Concession Agreement was void ab initio and that neither MoFT nor MACL had authority under the laws of Maldives to enter into the agreement and MACL took over the possession and control of the MIA and GMIAL vacated the airport effective December 8, 2012. The matter was under arbitration. During the year ended March 31, 2017, the arbitration tribunal delivered its final award in favour of GMIAL. During the year ended March 31, 2018 , Maldives Inland Revenue Authority (‘MIRA) has issued tax audit reports and notice of tax assessments demanding business profit tax amounting to USD 1.44 Crore, USD 0.29 Crore as the additional withholding tax excluding fines and penalties. During the year ended March 31, 2019, MIRA has issued additional demands of USD 0.21 Crore and USD 0.13 Crore on account of fines on business profit tax and withholding taxes respectively. However, management of the Group is of the view that the notice issued by MIRA is not tenable.

On 23rd May 2019, the Attorney Generals office has issued statement on this matter to MIRA stating that in the event of the Maldives parties deducting any sum from this award in respect of taxes, the amount payable under the award shall be increased to enable the GMIAL to receive the sum it would have received if the payment had not been liable to tax.

Accordingly, no adjustments have been made to the accompanying consolidated financial results of the Group for the quarter and year ended March 31, 2019. The statutory auditors of the GMAIL have qualified their Audit Report in this regard which has been continued by the auditor of GMR infrastructure Limited in their audit report on the consolidated financial statements.

Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

5) The Holding Companys internal financial control with regard to assessment of carrying value of investments in certain associates and joint ventures as more fully explained in note 8B(m)(iv) to these consolidated Ind AS financial statements were not operating effectively and could potentially result in the Group not providing for adjustments that may be required to be made to the carrying value of such investments.

Managements response to the Statutory Auditors Qualification / Comment on the Companys Consolidated Financial statement

Qualification in the report on internal financial controls over financial reporting regarding assessment of carrying value of investments in certain joint ventures and associates – The Group has a robust system in place to assess the appropriateness of the carrying value of its investments, including testing for impairments. Managements view on the instant cases are explained in the para 2 above.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, your Company with reference to its EPC business is required to maintain the cost records as specified under sub-section 1 of section 148 of the Companies Act, 2013 and the said cost records are also required to be audited.

Your Company is maintaining all the cost records referred above and M/s. Rao, Murthy & Associates, Cost Auditors, have issued a cost audit report for FY 2018-19 which does not contain any qualification, reservation or adverse remark.

The Board, on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, as cost auditors for conducting the audit of cost records of the Company for the FY 2019-20.

Accordingly, a resolution seeking members ratification for the remuneration to M/s. Rao, Murthy & Associates, Cost Accountants is included in the Notice convening the ensuing AGM.

Secretarial Auditor

The Board has appointed M/s. V. Sreedharan & Associates, Company Secretaries, a firm of Company Secretaries in Practice, to conduct Secretarial Audit for the FY 2018-19. The Secretarial Audit Report, as prescribed under Section 204 of the Companies Act, 2013 read with Regulation 24A of the SEBI LODR for the FY ended March 31, 2019 is annexed herewith as Annexure D to this Report. The Board noted the observation in the secretarial audit report that an e-form (MGT-14) filed with the Registrar of Companies did not include the resolution for approving the annual financial statements of the company for the year ended March 31, 2018 and that it was an inadvertent omission. The Board further noted that appropriate measures are initiated to file the said resolution with the Registrar of Companies.

Further, the Secretarial Audit of material unlisted subsidiaries of the Company, as required under Regulation 24A of the SEBI LODR, has been done for the FY 2018-19 and there were no adverse remarks or disclaimers in the said reports of the material subsidiaries.

Secretarial Standards

The Company confirms compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Disclosures: CSR Committee

The CSR Committee comprises of Mr. R.S.S.L.N. Bhaskarudu as Chairman, Mr. B.V.N. Rao and Mr. G.B.S. Raju as members.

Audit Committee

The Audit Committee comprises of Mr. N.C. Sarabeswaran as Chairman, Mr. S. Rajagopal, Mr. R.S.S.L.N. Bhaskarudu and Mrs. Vissa Siva Kameswari as members.

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

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

Vigil Mechanism

The Company has a vigil mechanism named Whistle Blower Policy, which provides a platform to disclose information, confidentially and without fear of reprisal or victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrong doing within the Company. 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 convened and 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.

Particulars of Loans, Guarantees and Investments

Details of Loans/ Guarantees given and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given 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 Annexure E to this report.

Annual Return

Pursuant to Section 134 and Section 92(3) of the Companies Act, 2013, as amended, the Extract of Annual Return as on March 31, 2019 in form MGT-9 is enclosed as Annexure G to this report. Additionally, the said extract of MGT-9 as on March 31, 2019 and a copy of the Annual Return for the financial year 2017-18 has been placed on the Company website at https://investor. gmrgroup.in/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 Annexure H 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. None of the employees listed in the said Annexure, other than the Chairman and Managing Director, is related to any Director 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 provided as Annexure I and is disclosed on the website of the Company at the link: https://investor.gmrgroup.in/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 "Developments in Human Resources and Organization Development at GMR Group".

Changes in Share capital

There was no change in authorized, issued and paid-up share capital of the Company during the year under review.

The Company had issued 4 (Four) valid Unrated Unlisted Optionally Convertible Debentures (OCDs) having face value of र 43,08,02,315/- each to Doosan Power Systems India Private Limited (Doosan) during the FY 2018-19. The said OCDs are redeemable in four equal quarterly instalments commencing from March 31, 2019.

The Company had also issued another four OCDs of र 57,41,97,685/- each to Doosan during this period, however the same were subsequently withdrawn, in compliance with the SEBI interpretative letter.

Environmental 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 environmental protection and sustainability are described in Business

Responsibility Report forming part of Annual Report.

Events subsequent to the date of financial statements

There are no material changes and commitments affecting financial position of the Company between March 31, 2019 and Boards Report dated August 8, 2019 except as disclosed in note no. 55 in consolidated financial statements and in boards report for sale of stake in GCEL.

Change in the nature of business, if any

There is no change in the nature of 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, 2019.

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.

The following is a summary of sexual harassment complaints received and disposed of during the FY ended March 31, 2019:

Number of complaints received Nil
Number of complaints disposed off Nil

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.

For and on behalf of the Board
GMR Infrastructure Limitd
Place: New Delhi G.M. Rao
Date: August 8, 2019 Chairman