gmr power & urban infra ltd share price Auditors report

To the Members of GMR Power and Urban Infra Limited Report on the Audit of the Consolidated Financial Statements Qualified Opinion

1. We have audited the accompanying consolidated financial statements of GMR Power and Urban Infra Limited (‘the Holding Company) and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group), its associates, joint ventures and joint operations, as listed in Annexure 1, which comprise the Consolidated Balance Sheet as at 31 March 2023, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on separate financial statements and on the other financial information of the subsidiaries, associates and joint ventures and joint operations except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, and other accounting principles generally accepted in India of the consolidated state of affairs of the Group, its associates, joint ventures and joint operations, as at 31 March 2023, and their consolidated profit (including other comprehensive income), consolidated cash flows and the consolidated changes in equity for the year ended on that date.

Basis for Qualified Opinion

3. As stated in note 7(b)(12)(i) to the accompanying consolidated financial statements, the Group has an investment amounting to Rs. 895.74 crore (net of impairment) in GMR Energy Limited (‘GEL), a joint venture company and outstanding loan (including accrued interest) amounting to Rs. 2,188.80 crore recoverable from GEL and its subsidiaries and joint ventures as at 31 March 2023. GEL has further invested in GMR Kamalanga Energy Limited (‘GKEL), a subsidiary of GEL.

As further mentioned in note 7(b)(12)(iii), the fair value of investment in GKEL considered for the purpose of determining the carrying value of aforesaid investment is based on the valuation performed by an external expert using the discounted future cash flows method which is significantly dependent on the achievement of certain key assumptions considered in aforementioned valuation such as settlement of disputes with customers and timely realization of receivables, expansion and optimal utilization of existing capacity, and favourable outcome of the litigations with respect to claims of capital creditors filed against GKEL.

In addition to the above, considering the erosion of net worth and net liability position of GKEL, we, in the capacity of auditors of GKEL have also given a separate section on material uncertainty related to going concern in the audit report on the Financial Statements of GKEL for the year ended 31 March 2023. Owing to the aforementioned uncertainties, we are unable to comment upon adjustments, if any, that may be required to the carrying values of the loans (including accrued interest) and non-current investment as at 31 March 2023 and the consequential impact on the accompanying consolidated financial statements. The opinion expressed by us on the consolidated financial statements of the Holding Company for the year ended 31 March 2022 vide our audit report dated 18 May 2022 was also qualified in respect of above matter.

4. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates, joint ventures and joint operations in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained together with the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph 19 of the Other Matters section below,is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters

5. We draw attention to note 33(a) to the accompanying consolidated financial statements, which describes the uncertainty related to the outcome of a tax assessment from Maldives Inland Revenue Authority (‘MIRA) on business profit tax. As per the statement issued by MIRA dated 28 October 2021, GMR Male International Airport Private Limited (‘GMIAL) has to settle business profit tax amounted to USD 1.44 crore and fines on business profit tax amounted to USD 0.82 crore. As per the letter dated 22 January 2020 issued by the Ministry of Finance Male, Republic of Maldives, "the amount of tax assessed by the MIRA relating to the final arbitration award is only USD 0.59 crore and this amount should be paid by whom the payment was settled to GMIAL in the event of any tax payable by GMIAL". Further the letter also confirms that GMIAL is not liable to pay for the taxes assessed by MIRA on the arbitration sum and the Government of Maldives have initiated communication with MIRA to settle the taxes and fines payable on the arbitration award. Accordingly, the ultimate outcome of the business tax assessment sent by the MIRA cannot be determined and hence, the effect on the consolidated financial results is uncertain. Accordingly, the Group has not made any provision in the accompanying consolidated financial statements. Our opinion is not modified in respect of this matter.

The above matter has also been reported as an emphasis of matter in the audit report dated 04 May, 2023 issued by other firm of chartered accountants on the financial statement of GMIAL for the period ended 31 December 2022.

6. We draw attention to note 42(i) to the accompanying consolidated financial statements in relation to implications of CERC (Procedures, terms and conditions for grant of trading license and other related matters) Regulation, 2020, effective from January 2020 on the operations of GMR Energy Trading Limited (‘GETL), a subsidiary of the Holding Company. GETL is in the process of ensuring necessary compliances with respect to current/liquidity ratio as required under aforesaid regulations in due course.

The Management of the Holding Company based on the legal opinion is of the view that non achievement of the said ratio will not have any material implication on operations of GETL. Our opinion is not modified in respect of this matter.

The above matter has also been reported as an emphasis of matter in the audit report dated 26 April 2023 issued by other firm of chartered accountants on the financial results of GETL for year ended 31 March 2023.

7. We draw attention to note 43(i) to the accompanying consolidated financial statements which describes that the milestones linked to the contingent sale consideration receivable on account of sale of equity stake and inter-corporate deposits recoverable from Kakinada SEZ Limited (‘KSEZ) have not been achieved, and as a result, the Group has reversed the balance consideration receivable amounting to Rs. 442.58 crore during the current year, which has been charged to Statement of Profit and Loss and disclosed under exceptional items. Our opinion is not modified in respect of this matter.

Key Audit Matters

8. Key audit matters are those matters that, in our professional judgment and based on the consideration of the reports of the other auditors on separate financial statements of the subsidiaries, associates, and joint ventures, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

9. In addition to the matters described in the Basis for Qualified Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter		How our audit addressed the key audit matter
1. Assessment of going concern basis (refer Note 1.1 to the accompanying consolidated financial statements)
The Group has profit before tax amounting to Rs. 1,232.19 crores for the year ended 31 March 2023 with a consequent lower credit rating of some of its borrowings. While the above factors indicated a need to assess the Groups ability to continue as a going concern, as mentioned in note 1.1 to the accompanying consolidated financial statements, the Group has taken into consideration various initiatives including monetization of assets, recovery of outstanding claims in various infra business (highway sector/EPC), raising finances from financial institutions/ group companies, strategic investors and from other strategic initiatives and refinancing of existing debts considered as mitigating factors in its assessment for use of going concern basis of accounting for preparation of the accompanying consolidated financial statements.		Our audit procedures included but were not limited to, the following in relation to assessment of appropriateness of going concern basis of accounting:?
For the aforesaid purpose, the Management has prepared future cash flow forecasts based on the management business plans as approved by the Board of the Directors and performed sensitivity analysis of the key assumptions and inputs used in such projections to assess whether the Group would be able to operate as a going concern for a period of at least 12 months from the date of financial statements and concluded that the going concern basis of accounting used for preparation of the accompanying consolidated financial statements is appropriate and there is no material uncertainty in such assessment.		• Obtained an understanding of the managements process for identifying all the events or conditions that could impact the Groups ability to continue as a going concern and the process followed to assess the mitigating factors for such events or conditions. Also, obtained an understanding around the methodology adopted and the associated controls implemented by the Group to assess their future business performance to prepare a robust cash flow forecast;
We have considered the assessment of managements evaluation of going concern basis of accounting as a key audit matter due to the pervasive impact thereof on the consolidated financial statements and the significant judgements and assumptions that are inherently subjective and dependent on future events, involved in preparation of cash flow projections and determination of the overall conclusion by the management.		• Reconciled the cash flow forecast to the approved future business plans of the respective companies included in the Group, as applicable, and considered the same for our assessment of the Groups capability to meet its financial obligation falling due within next twelve months;
		• In order to corroborate managements future business plans and to identify potential contradictory information, we read the minutes of the Board of Directors and discussed the same with the management;
		• Tested the appropriateness of key assumptions used by the management that had most material impact in preparation of the cash flow forecast and evaluated the completeness and accuracy of the expected outflow on account of debt repayments and other commitments made by the Group;
		• Performed independent sensitivity analysis to test the impact of estimation uncertainty on the cash flows due to change in key assumptions;
		• Reviewed the historical accuracy of the cash flow projections prepared by the management in prior periods;
		• Inspected the relevant documents and other supporting evidence for managements plan for raising finance through strategic investors and of refinancing of existing borrowings and recoverability of claims; and
		• Assessed the appropriateness and adequacy of the disclosures made in the consolidated financial statements in respect of going concern.
2. Evaluation and disclosure of accrual estimates for legal claims, litigation matters and contingencies (refer note 2.2(t) for accounting policy and note 38(c)for disclosures of the accompanying consolidated financial statements)
The Group has ongoing litigations with various authorities and third parties which could have a significant impact on the consolidated financial statements, if the potential exposures were to materialize.		Our audit procedures in relation to the assessment of legal claims, litigation matters and contingencies included but were not limited to the following:
The amounts involved are significant, and the application of accounting standards to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is inherently subjective. Claims against the Group are disclosed in the consolidated financial statements by the Group.
We have determined the evaluation and disclosure for litigations matters and contingencies as a key audit matter because the outcome of such legal claims and litigation is uncertain and the position taken by management involves significant judgments and estimations to determine the likelihood and/or timing of cash outflows and the interpretation of preliminary and pending court rulings.		• Obtained an understanding of managements process and evaluated design, implementation and operating effectiveness of managements key internal controls over assessment of legal claims, litigations and various other contingencies and completeness of disclosures;
Considering the aforementioned matter is fundamental to the understanding of the users of the consolidated financial statements, we further draw attention to the following specific matters involving significant litigations and contingencies:		• Obtained and read the summary of litigation matters provided by management, the supporting documentation on sample basis and held discussions with the management of the Group;
a. Note 42(ii) to the accompanying consolidated financial statements relating to certain claims and counter claims filed by GMR Power Corporation Limited (‘GPCL), (an erstwhile step down subsidiary of the Holding Company, now merged with GMR Generation Assets Limited (‘GGAL‘), a subsidiary of the Holding Company vide National Company Law Tribunal (‘NCLT) order dated 13 March 2020) and Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) which are pending before the Honorable Supreme Court of India and Appellate Tribunal For Electricity (‘APTEL) as detailed in the aforesaid note. Based on GPCLs internal assessment and legal opinion, pending final outcome of the litigation, the management is of the view that no further adjustments in addition to those described in aforementioned note are required to be made to the accompanying consolidated financial statements for the aforesaid matter.		• For claims/matters/disputes settled during the year if any, we have read the related orders/directions issued by the courts/ settlement agreements in order to verify whether the settlements were appropriately accounted for/disclosed;
The above matter is also reported as an emphasis of matter in the audit report dated 24 April 2023 issued by another firm of chartered accountants on the standalone financial results of GGAL for the year ended 31 March 2023. Further, considering the erosion of net worth and net liability position of GGAL, such auditor has also given a separate section on the material uncertainty relating to going concern in their audit report. b. Note 41(iii) to the accompanying consolidated financial statements, which states that Honorable High Court of Delhi vide its order dated 06 April 2022 in favour of GMR Pochanpalli Expressways Limited (‘GPEL), a subsidiary of the Holding Company, has held that overlay work is to be carried out as and when the roughness index of roads surpasses the specified thresholds. However, basis legal opinion obtained, the Groups management is of the view that pending finality of the appeal filed by NHAI before the divisional bench of the Honble Delhi High Court, since the matter is sub-judice, the Group has not given financial effect to the impact of the aforementioned order in the accompanying consolidated financial statements.		• Evaluated various legal opinions obtained by management and conducted a review of the assessment done by the management through internal and external tax and legal experts for the likelihood of contingencies and potential impact of various litigations and legal claims, examining the available supporting documents;
The above matter has also been reported as an emphasis of matter in the audit report dated 27 April 2023 issued by other firm of chartered accountants on the financial statement of GPEL for the year ended 31 March 2023.		• Involved auditors experts to assess relevant judgements passed by the appropriate authorities in order to assess the basis used for the accounting treatment and resulting disclosures for entities audited by us;
		• Assessed the financial statements of the components with regards to the disclosures pertaining to the various legal claims, litigation matters and contingencies; and
		• Assessed the appropriateness and adequacy of the related disclosures in note 38(c) to the consolidated financial statements in accordance with the requirements of applicable accounting standards.
3. Revenue recognition and measurement of upfront losses on long-term construction contracts (refer note 2.2(f) for the accounting policy and note 24 for disclosures of the accompanying consolidated financial statements)
For the year ended 31 March 2023, the Holding Company has recognized revenue from Engineering, procurement and construction (EPC) contracts of Rs. 1,000.47 crores and has accumulated provisions for upfront losses amounting to Rs. 4.64 crores as at 31 March 2023.	Our audit procedures for recognition of contract revenue, margin and contract costs, and related receivables and liabilities included, but were not limited to, the following:
The Holding Companys revenue primarily arises from construction contracts, which is recognised over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contract with Customers, as further explained in note 2.2(f) to the accompanying consolidated financial statements, and which, by its nature, is complex given the significant judgements involved in the assessment of current and future contractual performance obligations.	• Evaluated the appropriateness of the Holding Companys accounting policy for revenue recognition from construction contracts in accordance with Ind AS 115, ‘Revenue from Contracts with Customers;
The Holding Company recognises revenue and margins based on the stage of completion which is determined on the basis of the proportion of value of goods or services transferred as at the Balance Sheet date, relative to the value of goods or services promised under the contract.	• Assessed the design and implementation of key controls, over the recognition of contract revenue and tested the operating effectiveness of these controls;
The recognition of contract revenue, contract costs and the resultant profit/ loss therefore rely on the estimates in relation to forecast contract revenue and the total cost. These contract estimates are reviewed by the management on a periodic basis. In doing so, the management is required to exercise judgement in its assessment of the valuation of contract variations and claims and liquidated damages as well as the completeness and accuracy of forecast costs to complete and the ability to deliver contracts within contractually determined timelines. The final contract values can potentially be impacted on account of various factors and are expected to result in varied outcomes. Changes in these judgements, and the related estimates as contracts progress can result in material adjustments to revenue and margins/ onerous obligations.	• For a sample of contracts, we have tested the appropriateness of amount recognized as revenue by evaluating key management judgements inherent in the determining forecasted contract revenue and costs to complete that drive the accounting under the percentage of completion method by performing following procedures:
Owing to these factors, we have determined revenue recognition and provision for upfront losses from EPC contracts as a key audit matter for the current year audit.	• reviewed the contract terms and conditions;
In addition to the above, following disclosures made in the accompanying standalone financial statements have been considered as fundamental to the users understanding of such financial statements:	• evaluated the identification of performance obligation of the contract;
a. We draw attention to note 24(h) to the accompanying consolidated financial statements which describes that the Holding Company has recognised certain claims in the current year pertaining to Dedicated Freight Corridor Corporation (‘DFCC) project basis evaluation by the joint venture (‘JV) incorporated between the Company and SEW Infrastructure Limited, of JVs entitlement under the contract towards recovery of prolonged cost, as further detailed in the aforesaid note.	• evaluated the appropriateness of managements assessment that performance obligation was satisfied over time and consequent recognition of revenue using percentage of completion method;
	• obtained an understanding of the assumptions applied in determining the forecasted revenue and cost to complete;
	• assessed managements estimates of the impact to revenue and budgeted costs arising from scope changes made to the original contracts, claims, disputes and liquidation damages (including prolongation claims) with reference to supporting documents including variation orders and correspondence between the Holding Company and the customers; and
	• Assessed the appropriateness and adequacy of disclosures made by the management with respect to revenue recognised during the year in accordance with applicable accounting standards.
4. Impairment testing carried out for carrying value of investments in joint venture and associates and carriage-ways grouped under other intangible assets of the Group (refer note 7a, 7b and 6 to the accompanying consolidated financial statements other than those referred in basis of qualified opinion paragraph 3 above)
The Group has total investments in joint ventures and associates amounting to Rs. 903.47 crores and carriage-ways grouped under other intangible assets amounting to Rs. 2,062.46 crores. The aforementioned investments and intangible assets are accounted for in accordance with Ind AS 27, Separate Financial Statements and Ind AS 38, Intangible Assets, respectively.		Our audit procedures with respect to assessment of impairment loss on carrying value of investments in joint venture and associates and carriage-ways grouped under other intangible assets of the Group included but not limited to the following:
The Group assesses these investments and assets for impairment when impairment indicators exist by comparing the recoverable amount (determined as the higher of fair value less costs of disposal and value in use) with the carrying amount of the respective assets as on the reporting date. The value in use is computed using the Discounted Cash Flow Model (‘DCF) model.		• Obtained an understanding of the managements process for identifying impairment indicators as well as determining the appropriate methodology to carry out impairment testing for the carrying value of investments in accordance with the requirements of Ind AS 36, Impairment of Assets;
The determination of recoverable amounts of the carrying value of these investments in joint venture and associates and carriage-ways grouped under other intangible assets of the Group relies on various management estimates of future cash flows and their judgment with respect to the following:		• Evaluated the Groups valuation methodology in determining the value-in-use and fair value to estimate the recoverable value of such investments. In making this assessment, we also assessed the professional competence, objectivity and capabilities of the valuation specialist engaged by the management;
Investments in joint venture and associates:		• Involved auditors valuation specialists to assess the appropriateness of the value-in-use and fair value determined by the management and to test reasonability of the key assumptions used in the cash flow forecasts such as growth rates during the explicit period, terminal growth rate and the discount rate;
In case of investments in entities in the energy business, cash flow projections are based on estimates and assumptions relating to conclusion of tariff rates, operational performance of the plants, market prices of gas, coal and other fuels, restructuring of loans etc.
Carrying values of carriage-ways grouped under other intangible assets:
In case of investments in carriage-ways, cash flow projections are based on assumptions relating to periodic major maintenance by using a model that incorporates a number of assumptions, including the life of the concession agreement, annual traffic growth and the expected cost of the periodic major maintenance which are considered as reasonable by the management and also consider favourable outcomes of litigations etc. in the carriage-ways business.		• We have carried out discussions with management on the performance of these investments as compared to previous year in order to evaluate whether the inputs and assumptions used in the aforesaid cash flow forecasts were suitable;
The key assumptions underpinning managements assessment of the recoverable amount further include, but are not limited to, projections of growth rates, discount rates, estimated future operating and capital expenditure. Changes to assumptions could lead to material changes in estimated recoverable amounts, resulting in impairment of investments in joint venture and carriage-ways grouped under other intangible.		• Discussed the significant ongoing litigations in these entities which had a material impact to ascertain the appropriateness of the outcome considered in the respective valuation models;
Considering the significance of the amounts involved and auditor attention required to test the appropriateness of the accounting estimates that involves high estimation uncertainty and significant management judgement, this matter has been determined as a key audit matter for current years audit.		• Tested the arithmetical accuracy of the calculations performed by the management expert; and
Considering the matter is fundamental to the understanding of the users of the accompanying consolidated financial statements we further draw attention to:		• Assessed the appropriateness and adequacy of the related disclosures in the consolidated financial statements in accordance with the requirements of relevant accounting standards.
a. Note 7b(11) and 7b(12)(ii) to the accompanying consolidated financial statements which is in addition to the matters described in Basis for Qualified Opinion above, regarding the investment made by the Group in GEL amounting to Rs. 895.74 crores as at 31 March 2023. The recoverability of such investment is further dependent upon various claims and other receivables from customers of GMR Warora Energy Limited (‘GWEL), a subsidiary of GEL, which are pending settlement / realization as on 31 March 2023, capacity utilization of plant in future years and certain other key assumptions as considered in the valuation performed by an external expert.
The above claims also include disputed claims pertaining to recovery of transmission charges from Maharashtra State Electricity Distribution Company Limited (‘MSEDCL) by GWEL. GWEL has disputed the contention of MSEDCL that the cost of transmission charges are to be paid by GWEL. However, based on the Order of the Appellate Tribunal for Electricity (‘APTEL) (‘the Order) dated 08 May 2015, currently contested by MSEDCL in the Honble Supreme Court and pending conclusion, GWEL has accounted for reimbursement of such transmission charges in the Statement of Profit and Loss amounting to Rs. 616.33 crore for the period from 17 March 2014 to 31 March 2023 and transmission charges invoiced directly to MSEDCL by Power Grid Corporation Limited for the period December 2020 to March 2023 as contingent liability, as further described in aforesaid note.
The management of the Holding Company, based on its internal assessment, legal opinion, certain interim favourable regulatory orders and valuation assessment made by an external expert, is of the view that the carrying value of the aforesaid investment of the Group in GEL, taking into account the matters described above in relation to the investment made by GEL in GWEL is appropriate and accordingly, no adjustments to the aforesaid balance have been made in the accompanying Statement for the year ended 31 March 2023.
The above matters with respect to GWEL are also reported as an emphasis of matter in the audit report dated 05 May 2023 issued by other firm of chartered accountants on the standalone financial statements of GWEL for the year ended 31 March 2023.
b. Note 7(b)(12)(iv) to the accompanying consolidated financial statements which is in addition to the matters described in
Basis for Qualified Opinion above, regarding the investment made by the Group in GEL amounting to Rs. 895.74 crore as at 31 March 2023. The recoverability of such investment is further dependent upon achievement of business plans of GMR Bajoli Holi Hydropower Private Limited (‘GBHHPL), a joint venture of GEL and recoverability of capital advances in the near future given to contractor for GBHPPLs project, which along with other claims which are pending before the Arbitral Tribunal as described in the said note.
The management of the Holding Company, based on its internal assessment, legal opinion and valuation assessment made by an external expert, is of the view that the carrying value of the aforesaid investment of the Group in GEL, taking into account the matter described above in relation to the investment made by GEL in GBHPPL, is appropriate and accordingly, no adjustments to the aforesaid balance have been made in the accompanying consolidated financial statement for the year ended 31 March 2023.
c. Note 41(i) and 41(ii) to the accompanying consolidated financial statements which relates to the ongoing arbitrations with National Highways Authority of India (NHAI) for compensation of losses being incurred by GMR Ambala Chandigarh Expressways Private Limited (‘GACEPL) and GMR Hyderabad Vijayawada Expressways Private Limited (‘GHVEPL), step-down subsidiaries of the Holding Company, since the commencement of commercial operations. Pending outcome of the aforementioned arbitration proceedings, GHVEPL has not paid to NHAI an amount of Rs. 1,291.57 crore as at 31 March 2023 towards additional concession fee along with interest thereon and GACEPL has not provided for interest on the negative grant amounting to Rs. 60.33 crore calculated up-to 25 August 2020 in the accompanying consolidated financial statements. GACEPLs claim for compensation of losses is currently pending for re-initiation of arbitration proceedings as per the order of the High Court of Delhi dated 26 September 2022 which has set aside the earlier issued Arbitral Award dated 26 August 2020 appealed under Section 34 by GACEPL and has referred the entire dispute back to Arbitration Tribunal. Such order of the High Court has been further appealed by NHAI and others under section 37 which is currently pending with the Honble High Court for final judgement.
Further, based on managements internal assessment of compensation inflows, external legal opinions and valuation performed by independent experts, the management is of the view that the recoverable amounts of the carriageways of GACEPL and GHVEPL is assessed to be in excess of the respective carrying values amounting Rs. 280.77 crore and Rs. 1,778.37 crore as at 31 March 2023. Currently, useful life of 25 years has been considered in arriving at the carrying value and amortisation of carriageways of GHVEPL, on the basis of managements plan to develop the six-lane project within the contractually stipulated timelines ending in April 2024. This useful life is subject to the outcome of the dispute between GHVEPL and NHAI in relation to the restriction of concession period by NHAI to 15 years and withdrawal of six laning of the highway project, in which case the useful life will need to be revised. The management has obtained a legal opinion and is of the view that the original contractual term of 25 years is likely to be enforced and accordingly, no adjustments to the consolidated financial statements are considered necessary.
The above matters have also been reported as an emphasis of matters in the audit reports dated 27 April 2023 issued by other firms of chartered accountants on the financial statements of the GACEPL and GHVEPL, for the year ended 31 March 2023.
Further, considering the erosion of net worth and net liability position of these entities, such auditors have also given a separate section on the material uncertainty relating to going concern in their respective audit reports.

Information other than the Consolidated Financial Statements and Auditors Report thereon

10. The Holding Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Report on Corporate Governance, Directors Report, etc., but does not include the consolidated financial statements and our auditors report thereon. These reports are expected to be made available to us after the date of this auditors report.

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

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

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

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

11. The accompanying consolidated financial statements have been approved by the Holding Companys Board of Directors. The Holding Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated changes in equity and consolidated cash flows of the Group including its associates, joint ventures and joint operations in accordance with the Ind AS specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, and other accounting principles generally accepted in India. The Holding Companys Board of Directors are also responsible for ensuring accuracy of records including financial information considered necessary for the preparation of consolidated Ind AS financial statements. Further, in terms of the provisions of the Act the respective Board of Directors of the companies included in the Group, and its associate companies, joint ventures and joint operations companies covered under the Act are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. These financial statements have been used for the purpose of preparation of the consolidated financial statements by the Board of Directors of the Holding Company, as aforesaid.

12. In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associates, joint ventures and joint operations are responsible for assessing the ability of the Group and of its associates and joint ventures to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

13. Those respective Board of Directors are also responsible for overseeing the financial reporting process of the companies included in the Group and of its associates, joint ventures and joint operations.

Auditors Responsibilities for the Audit of the Consolidated Financial Statements

14. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

15. As part of an audit in accordance with Standards on Auditing specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

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

• Obtain sufficient appropriate audit evidence regarding the financial information/ financial statements of the entities or business activities within the Group, and its associates, joint ventures and joint operations to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of financial statements of such entities included in the financial statements, of which we are the independent auditors. For the other entities included in the financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

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

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

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

Other Matters

19. We did not audit the annual financial statements of 52 subsidiaries and 1 joint operation (including 8 subsidiaries consolidated for the year ended 31 December 2022, with a quarter lag and 1 joint operation consolidated for the year ended

31 December 2022, with a quarter lag) whose financial statements reflects (before adjustments for consolidation) total assets of Rs. 13,374.32 crore and net assets of Rs. (1,631.99) crore as at 31 March 2023, total revenues of Rs. 4,454.95 crore, and net cash inflows of Rs. 526.91 crore for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also includes the Groups share of net profit (including other comprehensive income) of Rs. 679.50 crore for the year ended 31 March 2023, as considered in the consolidated financial statements, in respect of 23 associates and 16 joint ventures (including 22 associates and 2 joint ventures consolidated for the year ended 31 December 2022, with a quarter lag), whose annual financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint operation, associates and joint ventures, and our report in terms of sub-section (3) of section 143 of the Act in so far as it relates to the aforesaid subsidiaries, joint operation, associates and joint ventures, are based solely on the reports of the other auditors. Further, of these subsidiaries, associates, joint ventures, joint operations, 8 subsidiaries, 22 associates, 5 joint ventures, and 1 joint operations are located outside India, whose financial statements other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries, and which have been audited by other auditors and under generally accepted auditing standard applicable in their respective countries. The Holding Companys management has converted the financial statements of such subsidiaries, associates, joint ventures and joint operations from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Holding Companys management. Our opinion on the consolidated financial statements, in so far as it relates to the balances and affairs of such subsidiaries, associates, joint venture and joint operations located outside India, is based on the audit report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us.

Our opinion above on the consolidated financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matters with respect to our reliance on the work done by and the reports of the other auditors.

20. We did not audit the financial information of 6 subsidiaries (including 6 subsidiaries consolidated for the year ended 31 December 2022, with a quarter lag), whose financial information reflect (before adjustment of consolidation) total assets of Rs. 23.43 crore and net assets of Rs. 22.66 crore as at 31 March 2023, total revenues of Rs. 0.04 crore, and net cash flows of Rs. 0.23 crore for the year then ended, as considered in the consolidated financial statements. The consolidated financial statements also include the Groups share of net profit (including other comprehensive income) of Rs. 0.44 crore for the year ended 31 March 2023, in respect of 1 joint venture (including 1 joint venture consolidated for the year ended 31 December 2022, with a quarter lag), whose financial information have not been audited by us. This financial information is unaudited and have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of the aforesaid subsidiaries and joint ventures, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the management, this financial information is not material to the Group.

Our opinion above on the consolidated financial statements, and our report on other legal and regulatory requirements below, are not modified in respect of the above matter with respect to our reliance on the financial information certified by the management.

Report on Other Legal and Regulatory Requirements

21. As required by section 197(16) of the Act based on our audit and on the consideration of the reports of the other auditors, referred to in paragraph 19, on separate financial statements of the subsidiaries, associates and joint ventures, we report that the Holding Company, 9 subsidiary companies and 4 joint venture companies incorporated in India whose financial statements have been audited under the Act have paid remuneration to their respective directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act. Further, we report that 35 subsidiary companies, 1 associate company and 8 joint ventures incorporated in India whose financial statements have been audited under the Act have not paid or provided for any managerial remuneration during the year. Accordingly, reporting under section 197(16) of the Act is not applicable in respect of such subsidiary companies/ associate companies/ joint venture companies.

22. As required by clause (xxi) of paragraph 3 of Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government of India in terms of section 143(11) of the Act based on the consideration of the Order reports issued till date by us and by the respective other auditors as mentioned in paragraph 19 above, of companies included in the consolidated financial statements for the year ended 31 March 2023 and covered under the Act we report that: a) Following are the qualifications/adverse remarks reported by us and the other auditors in the Order reports of the companies included in the consolidated financial statements for the year ended 31 March 2023 for which such Order reports have been issued till date and made available to us:

S. No. Company Name	CIN	Relationship	Clause No.
1 GMR (Badrinath) Hydro Power Generation Private Limited	U40101UR2006PTC031381	Joint venture	ix(a), ix(d)
2 GMR Ambala Chandigarh Expressways Private Limited	U45203KA2005PTC036773	Subsidiary	ix(a), xix
3 GMR Bajoli Holi Hydropower Private Limited	U40101HP2008PTC030971	Joint Venture	ix(a)
4 GMR Bundelkhand Energy Private Limited	U40101KA2010PTC054124	Joint venture	iii(c)
5 GMR Energy Limited	U85110MH1996PLC274875	Joint Venture	iii(f), ix(a), xix
6 GMR Energy Trading Limited	U31200KA2008PLC045104	Subsidiary	iii(c), ix(a), ix(d)
7 GMR Generation Assets Limited	U40104MH2010PLC282702	Subsidiary	ix(a), ix(d), xix
8 GMR Gujarat Solar Power Limited	U40100KA2008PLC045783	Joint venture	iii(c), iii(d), iii(e)
9 GMR Highways Limited	U45203MH2006PLC287171	Subsidiary	iii(e), ix(a)
10 GMR Hyderabad Vijayawada Expressways Private Limited	U45201KA2009PTC050109	Subsidiary	ix(a), xix
11 GMR Londa Hydropower Private Limited	U40101KA2008PTC048190	Subsidiary	ix(d)
12 GMR Pochanpalli Expressways Limited	U45200KA2005PLC049327	Subsidiary	iii(c)
13 GMR SEZ & Port Holdings Limited	U74900MH2008PLC274347	Subsidiary	iii(e), ix(a)
14 GMR Warora Energy Limited	U40100MH2005PLC155140	Joint venture	ii(b),vii(a), ix(a)
15 GMR Rajahmundry Energy Limited	U40107KA2009PLC051643	Associate	ix(a), ix(d)
16 GMR Kamalanga Energy Limited	U40101KA2007PLC044809	Joint Venture	ii(b), vii(a), xix
17 GMR Power and Urban Infra Limited	L45400MH2019PLC325541	Holding Company	ii(b), iii(e), ix(a)

23. As required by section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on separate financial statements and other financial information of the subsidiaries, associates and joint ventures incorporated in India whose financial statements have been audited under the Act, we report, to the extent applicable, that: a) We have sought and except for the matters described in the Basis for Qualified Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements; b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors, except for the possible effects of the matters described in paragraph 3 of the Basis for Qualified Opinion section with respect to the consolidated financial statements. c) The consolidated financial statements dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements; d) Except for the possible effects of the matters described in the Basis for Qualified Opinion section, in our opinion, the aforesaid consolidated financial statements comply with Ind AS specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015; e) The matters described in paragraph 5,6 and 7 of the Emphasis of Matter reported in sr. no. 2(a), 2(b), 3(a), 4(a), 4(b) and 4(c) of the Key audit matters section in paragraph 9 above and paragraph 3 of the Basis for Qualified Opinion section, in our opinion, may have an adverse effect on the functioning of the Group, its associates and joint ventures; f) On the basis of the written representations received from the directors of the Holding Company, its joint venture companies and taken on record by the Board of Directors of the Holding Company, its joint venture companies, respectively, and the reports of the statutory auditors of its subsidiary companies, associate companies and joint venture companies, covered under the Act, none of the directors of the Group companies, its associate companies and joint venture companies, are disqualified as on 31 March 2023 from being appointed as a director in terms of section 164(2) of the Act. g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 3 of the Basis for Qualified Opinion. h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Holding Company, and its subsidiary companies, associate companies and joint venture companies covered under the Act, and the operating effectiveness of such controls, refer to our separate report in ‘Annexure II wherein we have expressed a modified opinion; and i) With respect to the other matters to be included in the Auditors Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements and other financial information of the subsidiaries, associates and joint ventures incorporated in India whose financial statements have been audited under the Act: i. Except for the possible effects of the matters described in paragraph 3 of the Basis for Qualified Opinion section, the consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures as at 31 March 2023, as detailed in Note 7a, 7b, 38, 41 and 42 to the accompanying consolidated financial statements; ii. Except for the possible effects of the matters described in the Basis for Qualified Opinion section, provision has been made in these consolidated financial statements, as required under the applicable law or Ind AS, for material foreseeable losses, on long-term contracts including derivative contracts, as detailed in note 24(f) to the accompanying consolidated financial statements; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies, associate companies and joint venture companies covered under the Act, during the year ended 31 March 2023; iv. a. The respective managements of the Holding Company and its subsidiary companies, associate companies and joint venture companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries, associates and joint ventures respectively that, to the best of their knowledge and belief, other than as disclosed in note 50 (xi) to the consolidated financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Holding Company or its subsidiary companies, its associate companies or its joint venture companies to or in any person(s) or entity(ies), including foreign entities (‘the intermediaries), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Holding Company, or any such subsidiary companies, its associate companies or its joint venture companies (‘the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries; b. The respective managements of the Holding Company and its subsidiary companies, associate companies and joint venture companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries, associates and joint ventures respectively that, to the best of their knowledge and belief, other than as disclosed in the note

50 (xii) to the accompanying consolidated financial statements, no funds have been received by the Holding Company or its subsidiary companies, or its associate companies or its joint venture companies from any person(s) or entity(ies), including foreign entities (‘the Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Holding Company, or any such subsidiary companies, its associate companies or its joint venture companies shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and c. Based on such audit procedures performed by us and that performed by the auditors of the subsidiaries, associates and joint ventures, as considered reasonable and appropriate in the circumstances, nothing has come to our or other auditors notice that has caused us or the other auditors to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement. v. The Holding Company, its subsidiary companies, associate companies, and joint venture companies have not declared or paid any dividend during the year ended 31 March 2023. vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on 01 April 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.

For Walker Chandiok & Co LLP

Chartered Accountants Firms Registration No.: 001076N/N500013

Danish Ahmed

Partner Membership No.: 552144

UDIN: 23522144BGZHMV1077

Place: New Delhi

Date: 23 May 2023

Annexure I

List of entities included in the Statement

S.No. Name of the entity	Relation
1 GMR Power and Urban Infra Limited (GPUIL)	Holding Company
2 GMR Energy (Netherlands) B.V. (GENBV) 6	Subsidiary
3 GMR Tambaram Tindivanam Expressways Limited (GTTEL)1	Subsidiary
4 GMR Tuni Anakapalli Expressways Limited (GTAEL)1	Subsidiary
5 Honey Flower Estates Private Limited (HFEPL)	Subsidiary
6 GMR Infrastructure (UK) Limited (GIUL)	Subsidiary
7 GMR Aviation Private Limited (GAPL)	Subsidiary
8 GMR Infrastructure (Singapore) Pte Limited (GISPL)	Subsidiary
9 GMR Coal Resources Pte Limited (GCRPL)	Subsidiary
10 GIL SIL JV	Joint Venture
11 GMR Aerostructure Services Limited (GASL)	Subsidiary
12 GMR Energy Trading Limited (GETL)	Subsidiary
13 GMR Ambala Chandigarh Expressways Private Limited (GACEPL)	Subsidiary
14 GMR Pochanpalli Expressways Limited (GPEL)	Subsidiary
15 GMR Hyderabad Vijayawada Expressways Private Limited (GHVEPL)	Subsidiary
16 PT Golden Energy Mines Tbk (PTGEMS)2	Associate
17 PT Dwikarya Sejati Utma (PTDSU)2	Associate
18 PT Duta Sarana Internusa (PTDSI)2	Associate
19 PT Barasentosa Lestari (PTBSL)2	Associate
20 PT Unsoco (Unsoco)2	Associate
21 PT Roundhill Capital Indonesia (RCI)2	Associate
22 PT Borneo Indobara (BIB)2	Associate
23 PT Kuansing Inti Makmur (KIM)2	Associate
24 PT Karya Cemerlang Persada (KCP)2	Associate
25 PT Bungo Bara Utama (BBU)2	Associate
26 PT Bara Harmonis Batang Asam (BHBA)2	Associate
27 PT Berkat Nusantara Permai (BNP)2	Associate
28 PT Tanjung Belit Bara Utama (TBBU)2	Associate
29 PT Trisula Kencana Sakti (TKS)2	Associate
30 PT Era Mitra Selaras (EMS)2	Associate
31 PT Wahana Rimba Lestari (WRL)2	Associate
32 PT Berkat Satria Abadi (BSA)2	Associate
33 GEMS Trading Resources Pte Limited (GEMSCR)2	Associate
34 PT Kuansing Inti Sejahtera (KIS)2	Associate
35 PT Bungo Bara Makmur (BBM)2	Associate
36 PT GEMS Energy Indonesia (PTGEI)2	Associate
37 PT Karya Mining Solution (KMS)2	Associate
38 Aklima Properties Private Limited (AKPPL)	Subsidiary
39 Amartya Properties Private Limited (AMPPL)	Subsidiary
40 Advika Properties Private Limited (APPL)	Subsidiary
41 Asteria Real Estates Private Limited (AREPL)	Subsidiary
42 Bougianvile Properties Private Limited (BOPPL)	Subsidiary
43 Baruni Properties Private Limited (BPPL)	Subsidiary
44 Camelia Properties Private Limited (CPPL)	Subsidiary
45 Deepesh Properties Private Limited (DPPL)	Subsidiary
46 Eila Properties Private Limited (EPPL)	Subsidiary
47 GMR Bundelkhand Energy Private Limited (GBEPL)	Joint Venture
48 GMR Consulting Services Limited (GCSL)	Joint Venture
49 GMR Indo-Nepal Power Corridors Limited (GINPCL)	Joint Venture
50 GMR Londa Hydropower Private Limited (GLHPPL)	Subsidiary
51 GMR Maharashtra Energy Limited (GMAEL)	Joint Venture
52 GMR Smart Electricity Distribution Private Limited [formerly GMR Mining & Energy Private Limited (GMEL)]	Subsidiary
53 GMR Highways Limited (GMRHL)	Subsidiary
54 Gerbera Properties Private Limited (GPL)	Subsidiary
55 GMR Rajam Solar Power Private Limited (GRSPPL)	Joint Venture
56 GMR SEZ & Port Holdings Limited (GSPHL)	Subsidiary
57 GMR Vemagiri Power Generation Limited (GVPGL)	Joint Venture
58 Honeysuckle Properties Private Limited (HPPL)	Subsidiary
59 Idika Properties Private Limited (IPPL)	Subsidiary
60 Krishnapriya Properties Private Limited (KPPL)	Subsidiary
61 Lantana Properies Private Limited (LPPL)	Subsidiary
62 Larkspur Properties Private Limited (LAPPL)	Subsidiary
63 Lilliam Properties Private Limited (LPPL)	Subsidiary
64 Lakshmi Priya Properties Private. Limited (LPPPL)	Subsidiary
65 Nadira Properties Private Limited (NPPL)	Subsidiary
66 Namitha Real Estates Private Limited (NREPL)	Subsidiary
67 Padmapriya Properties Private Limited (PAPPL)	Subsidiary
68 Prakalpa Properties Private Limited (PPPL)	Subsidiary
69 Pranesh Properties Private Limited (PRPPL)	Subsidiary
70 Purnachandra Properties Private Limited (PUPPL)	Subsidiary
71 Radhapriya Properies Private Limited (RPPL)	Subsidiary
72 Shreyadita Properties Private Limited (SPPL)	Subsidiary
73 Sreepa Properties Private Limited (SRPPL)	Subsidiary
74 Suzone Properties Private Limited (SUPPL)	Subsidiary
75 Dhruvi Securities Limited (DSL) [formerly Dhruvi Securities Private Limited (DSPL)]	Subsidiary
76 Indo Tausch Trading DMCC (ITTD)	Subsidiary
77 GMR Chennai Outer Ring Road Private Limited (GCORRPL)	Subsidiary
78 GMR Krishnagiri SIR Limited (GKSIR)	Subsidiary
79 GMR Male International Airport Private Limited (GMIAL)	Subsidiary
80 GMR Generation Assets Limited (GGAL)	Subsidiary
81 GMR (Badrinath) Hydro Power Generation Private Limited (GBHPL)	Joint Venture
82 GMR Bajoli Holi Hydropower Private Limited (GBHHPL)	Joint Venture
83 GMR Gujarat Solar Power Limited (GGSPL)	Joint Venture
84 GMR Rajahmundry Energy Limited (GREL)	Associate
85 GMR Power & Urban Infra (Mauritius) Limited(GPUIML)	Subsidiary
[formerly GMR Infrastructure (Mauritius) Limited (GIML)]
86 GMR Lion Energy Limited (GLEL)	Joint Venture
87 Gateways for India Airports Private Limited (GFIAL)	Subsidiary
88 GMR Upper Karnali Hydropower Limited	Joint Venture
89 Karnali Transmission Company Private Limited	Joint Venture
90 GMR Warora Energy Limited (GWEL)	Joint Venture
91 Megawide GISPL Construction Joint Venture (MGCJV)	Joint operation
92 GMR Energy (Mauritius) Limited (GEML)	Joint Venture
93 GMR Energy Projects (Mauritius) Limited (GEPML)	Subsidiary
94 GMR Infrastructure (Overseas) Limited (GIOL)	Subsidiary
95 GMR Energy (Cyprus) Limited, Cyprus3	Subsidiary
96 GADL International Limited [formerly GADL (Isle of Man) Limited]4	Subsidiary
97 GMR Infrastructure (Cyprus) Limited5	Subsidiary
98 GMR Infrastructure Overseas Limited (Malta)	Subsidiary
99 Limak GMR Joint Venture	Joint Venture
100 GMR Infrastructure (Global) Limited5	Subsidiary
101 PT GMR Infrastructure Indonesia (PTGII)	Subsidiary
102 GMR Energy Limited (GEL)	Joint Venture
103 GMR Kamalanga Energy Limited (GKEL)	Joint Venture
104 GMR Tenaga Operations and Maintenance Private Limited (GTOM)	Joint Venture
105 GMR Green Energy Limited (GGEL) (formerly GMR Green Energy Private Limited (GGEPL))	Subsidiary

 

1. Merged with GMR Highways Limited w.e.f. 11 August 2022

2. Till 31 August 2022

3. Dissolved w.e.f. 20 May 2022

4. Dissolved w.e.f. 21 June 2022

5. Filed for liquidation during the year

6. Dissolved w.e.f. 31 January 2023

Annexure II

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

1. In conjunction with our audit of the consolidated financial statements of GMR Power and Urban Infra Limited (‘the Holding Company) and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group), its associates, joint ventures and joint operations as at and for the year ended 31 March 2023, we have audited the internal financial controls with reference to consolidated financial statements of the Holding Company, its subsidiary companies, its associate companies, joint venture companies and joint operation companies, which are companies covered under the Act, as at that date.

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

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

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

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

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

5. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matter(s) paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference to financial statements of the Holding Company, its subsidiary companies, its associate companies, joint venture companies and joint operation companies as aforesaid.

Meaning of Internal Financial Controls with Reference to Consolidated Financial Statements

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

Inherent Limitations of Internal Financial Controls with Reference to Consolidated Financial Statements

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

Qualified Opinion

8. According to the information and explanations given to us and based on our audit, and consideration of the report of the other auditors on internal financial controls with reference to financial statements of a subsidiary, the following material weaknesses have been identified in the operating effectiveness of the internal financial controls with reference to financial statements of the Holding company and its joint venture company as at 31 March 2023: The Holding Companys internal control system towards estimating the carrying value of investment and loans (including accrued interest) in a joint venture, as more fully explained in note 7b(12)(i) to the consolidated financial statements, were not operating effectively due to uncertainties in the judgments and assumptions made by the Holding Company in such estimations, which could result in the Group not providing for adjustments, if any, that may be required to the carrying values of investments, loans (including accrued interest) and its consequential impact on the accompanying consolidated financial statements. The report on internal financial controls with reference to financial statements of the joint venture company, GMR Energy Limited, is also qualified with respect to the above matter, issued by us vide our report dated 08 May 2023.

9. A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial controls with reference to financial statements, such that there is a reasonable possibility that a material misstatement of the Holding Companys annual or interim financial statements will not be prevented or detected on a timely basis.

10. In our opinion, the Group have, in all material respects, adequate internal financial controls with reference to financial statements as at 31 March 2023, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI, and except for the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Companys internal financial controls with reference to financial statements were operating effectively as at 31 March 2023.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements of the Group as at and for the year ended 31 March 2023, and the material weakness have affected our opinion on the consolidated financial statements of the Holding Company and we have issued a modified opinion on the consolidated financial statements.

Other Matter

11. We did not audit the internal financial controls with reference to financial statements insofar as it relates to 44 subsidiary companies, which are companies covered under the Act, whose financial statements reflect (before adjustments for consolidation) total assets of Rs. 11,183.64 crore and net assets of Rs. 416.78 crore as at 31 March 2023, total revenues of Rs. 2,108.51 crore and net cash inflows amounting to Rs. 503.70 crore for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Groups share of net loss (including other comprehensive income) of Rs. 293.30 crore for the year ended 31 March 2023, in respect of 1 associate companies and 11 joint venture companies, which are companies covered under the Act, whose internal financial controls with reference to financial statements have not been audited by us. The internal financial controls with reference to financial statements in so far as it relates to such subsidiary companies, associate companies and joint venture companies have been audited by other auditors whose reports have been furnished to us by the management and our report on the adequacy and operating effectiveness of the internal financial controls with reference to financial statements for the Holding Company, its subsidiary companies, its associate companies and joint venture companies, as aforesaid, under Section 143(3)(i) of the Act in so far as it relates to such subsidiary companies, associate companies and joint venture companies is based solely on the reports of the auditors of such companies. Our opinion is not modified in respect of this matter with respect to our reliance on the work done by and on the reports of the other auditors.

For Walker Chandiok & Co LLP

Chartered Accountants Firms Registration No.: 001076N/N500013

Danish Ahmed

Partner Place: New Delhi

Membership No.: 552144

Date: 23 May 2023

UDIN: 23522144BGZHMV1077