GVK Power & Infrastructure Ltd Auditor Reports

CONSOLIDATED FINANCIAL STATEMENTS

To,

The Members of GVK Power & Infrastructure Limited

Report on the audit of Consolidated Financial Statements Disclaimer of Opinion

1. We were engaged to audit the accompanying Consolidated financial statements of GVK Power & Infrastructure Limited (hereinafter referred to as the "Holding Company" or "GVKPIL"), its subsidiaries (Holding Company and its subsidiaries together referred to as "the Group" or "GVKPIL Group"), its associates and joint ventures (refer Note 42) to the consolidated financial statements), which comprise the Consolidated Balance Sheet as at March 31, 2024, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Changes in Equity and the Consolidated Cash flow Statement for the year then ended, and notes to the Consolidated Financial Statements, including material accounting policies and other explanatory information (hereinafter referred to as "the Consolidated Financial Statements").

2. We do not express an opinion on the accompanying consolidated financial statements. Because of the significance of the matters involving uncertainties, described in the "Basis of Disclaimer of opinion" section of our report, notwithstanding having obtained sufficient appropriate audit evidence regarding most of the individual uncertainties, it is not possible for us to form an opinion on the financial statements due to the potential interaction of the uncertainties and their possible cumulative effect on the consolidated financial statements.

Basis for Disclaimer of Opinion

3. We draw your attention to following notes of the Consolidated financial statements: i. We draw attention to note 52 to the consolidated financial statements which states that as at March 31, 2024, the GVKPIL

Group had accumulated losses and the GVKPIL Group has incurred losses excluding exceptional item during preceding years. The GVKPIL Groups current liabilities are significantly in excess of current assets. Three of the subsidiary companies where the project has been terminated are following liquidation basis of accounting. The GVKPIL group has delayed/defaulted in repayments of loans and interest thereon and various loan accounts have been classified as non-performing assets by banks/ lenders including recall of loans /filing of cases under the Insolvency and Bankruptcy Code in certain Resolution professional have also been appointed in certain cases by NCLT. There are various litigations going on in the GVKPIL Group. The GVKPIL Group has also provided guarantees and commitments and/or has undertaken to provide financial assistance on behalf of various entities and as further detailed in notes 46, 47, 49(a) and 49(b) (referring to notes on GVK Coal Developers (Singapore) Pte Limited, GVK Energy Limited, GVK Bagodara Vasad Expressway Private Limited and GVK Deoli Kota Expressway Private Limited), uncertainties are being faced by various projects such as delays / non development of coal mines in an overseas project where the Holding Company has provided guarantees and commitments for the borrowings, losses incurred by gas based power plant in the absence of gas and litigations on rights to claim capacity charge, arbitration on delay of commencement of road projects, termination of various projects etc. Various guarantees given by GVKPIL and GVK Energy Limited (GVKEL) on behalf of their subsidiaries, associates and joint controlled entity have been invoked by the lenders. These factors indicate significant doubt on going concern ability of the GVKPIL group. Notwithstanding the above, the financialstatements of the GVKPIL Group have been prepared on going concern basis as management believes that the GVKPIL Group would be able to ultimately meet its commitments, reduce debt by stake sale and the entities on whose behalf guarantees/ commitments have been extended would be able to meet their obligations. Further, the Management is confident that aforesaid entities would win litigations; will reach an optimal solution with non-controlling shareholders and lenders etc. as required despite current macro-economic environment challenges. Considering the various uncertainties involved as fully described in the Basis of Disclaimer section of our report, the probable impact could be material and pervasive on these consolidated financial statements and thatmaycausesignificantdoubt on companys ability to continue as a going concern. Accordingly, we are unable to comment that the management assumption of preparing these financial statements on going concern basis is appropriate. ii. We draw attention to Note No 46 to the Consolidated Financial Statements regarding GVK Coal Developers (Singapore) Pte.

Limited, (GVK Coal Developers) (an associate) in which the GVKPIL Group has investments and has receivables aggregating to Rs.79,048 Lakhs and to whom the holding company along with others jointly and severally had given irrevocable and unconditional guarantee and commitments (CG) for loans up to aggregating to USD 1,132.45 Million (Rs.9,44,168 Lakhs) (GVKPIL itself guaranteed towards the repayment of limits which shall be lower of either 53.9% (including in respect of the Hedging Agreements if any) of all principal amounts outstanding under the finance documents or USD 692.61 Million) taken by the aforesaid associate Company part of which is collateralized by pledge of 155,587,500 (March 31, 2023: 155,587,500), 130,287,382 (March 31, 2023: 130,287,382) and 48,000,000 (March 31, 2023: 48,000,000) shares of GVK Energy Limited,

GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited and has also undertaken to provide financial assistance of USD 3.11million (Rs.2,593 Lakhs) with respect to which there are multiple significant uncertainties including outlook on the sector, non-achieving of financial closure and clearances for the project, concluding an appropriate solution with various stakeholders including lenders, and necessary environmental and regulatory clearances etc. The GVK Coal Developers current liabilities exceeded current assets by USD 2,624 million (Rs.21,87,713 Lakhs) as of March, 2024 and accumulated losses as of March, 2024 is USD 1,386 million (Rs. 11,55,562 Lakhs) based on audited special purpose consolidated financial statements of GVK Coal Developers (Singapore) Pte. Limited. The GVK Coal Developers lenders filed a claim in the High Court of Justice Business and Property Courts of England and Wales Commercial Courts (England Court) on November 09, 2020 and have sought to recover the amounts advanced to GVK Coal Developers. During the current financial year 2023-24, the England court vide its order dated October 19, 2023 has crystalized the amount payable by the defendants (GVKPIL and other guarantors / stakeholders in GVK Coal Developers) at USD 2.19 billion including the amount towards interest. As per legal opinion obtained by the Holding company, the order dated 19th October 2023 passed by the England court is not speaking order. It has also been opined that the Order dated 19.10.2023 cannot be enforced in India and is contrary to the substantive law of India and is also in violation of the principles of natural justice. As per the GVKPIL management, several attempts were made by the company to have a solution with the lenders including an agreement dated March 23, 2017, wherein a non-binding framework solution was agreed upon for a settlement. Subsequently also there were several efforts to engage with the lenders to arrive at a settlement. The GVK Coal Developers having failed to repay debt obligation, ICICI bank has invoked CG of GVKPIL on Nov 02, 2020 and demanding to pay the GVK Coal Developers dues.

Further, one of the lenders has filed an application under Section 7 of the Insolvency and Bankruptcy Code 2016 to initiate Corporate Insolvency Resolution Process against the GVKPIL (being guarantor for loan taken by GVK Coal Developers) before National Company Law Tribunal, Hyderabad on July 14, 2022 and the company has filed the reply. As per the NCLT website, initially final hearing was mentioned as 24.04.2024 but the authority has partly heard the details and next hearing is scheduled on 31.05.2024. As per the GVKPIL management, petition filed by the ICICI Bank against GVKPIL is barred by Section 10A of the Code as the invocation of the Guarantee was admittedly done vide invocation of guarantee dated 02.11.2020 and as such the invocation of the guarantee on GVKPIL falls squarely within the period prescribed by Section 10A of the code. As per Section 10A, no application for initiation of corporate insolvency resolution process can be filed in respect of a default that has occurred on or after 25th March, 2020 till 25th March, 2021. However, as per ICICI Bank petition, the account (GVK Coal Developers) has become NPA with all the lenders around FY 2016-17. The ultimate outcome of the same and the resultant impact of the same on the financial statements is not ascertainable and cannot be commented upon.

GVKPIL is hopeful of achieving one time settlement with the lenders in view of its arrangement with Adani Airport Holdings Limited (AAHL) which is adequately incentivized to find solution with the lenders to get unencumbered ownership over the shares of GVK Airport Developers pledged with the lenders.

While the GVKPIL Group has made a provision for impairment in respect of the aforesaid investment and receivables aggregating to Rs.79,048 Lakhs, no provision has been made towards the Corporate Guarantee and commitments issued by GVKPIL. Considering the various uncertainties and complexities involved as mentioned above, we are unable to comment on the viability of the GVK Coal project and the additional provision that may be required concerning the aforementioned guarantees and commitments made by the GVKPIL and the resultant impact of the same on these consolidated financial statements.

iii. We draw attention to Note 47(b) to the consolidated financial statements regarding Deconsolidation of assets and liabilities of GVK Power (Goindwal Sahib) Limited ("GVKPGSL"), a step down subsidiary of the Holding Company with effect from 10th October 2022, as the same has been admitted into Corporate Insolvency Resolution Process on October 10, 2022 based on petition filed by Axis Bank Ltd, one of the lenders in the consortium of GVKPGSL with the Honble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against the GVKPGSL. Interim Resolution professional appointed by NCLT had taken possession of all assets of GVKPGSL. Since the GVKPIL Group loss the control over the GVKPGSL, the assets and liabilities of GVKPGSL have been deconsolidated as at October 10, 2022 as required u/s Para 25 of Ind AS 110 Consolidated Financial Statements, which has resulted in a net gain of Rs.343,685 Lakh as disclosed as Exceptional Items in the Consolidated

Financial statements during the year ended 31st March 2023.

During the current financial year 2023-24, the Resolution plan submitted by resolution Honble NCLT Hyderabad vide its order dated December 22, 2023. As per the said order, the secured lenders have received Rs.1,078 crores against their claims of Rs.6,585 Crores. i.e. with a deficit of Rs.5,507 Crores. The GVKEL has provided Corporate Guarantee to the lenders of GVKPGSL with respect to the amount lent by them. Lenders through its security trustee

(IDBI Trusteeship services limited) have invoked the corporate Guarantee. Further, during the financial year 2023-24, one of the lenders (IDBI) has filed the case against the GVKEL demanding the amount of Rs.1,494 Crores in the Honble NCLT, Hyderabad and next date of hearing is fixed on July 10, 2024. No provision has been made by GVKEL against these Corporate

Guarantees.

As per GVKPIL management, liability of Corporate Guarantor is co - extensive with the liability of the Principal Borrower. Further, as per GVKPIL management, Section 31(1) of the Code states that when a resolution plan is approved by the adjudicating authority the same is binding on all the creditors and the guarantors and all other stake holders and hence no claim is maintainable against them. Considering, the liability of the Principal Borrower stands discharged pursuant to the CIRP of the Principal Borrower, as per GVKPIL management, the liability of the Corporate Guarantor also extinguishes. The contention of the management is subject to interpretation and there are different judgements on the same. Further, as per the Corporate Guarantee agreement, the liability of the guarantor under this guarantee shall not be affected by: Any change in constitution, ownership or corporate existence of the borrower or any absorption, merger, or amalgamation of the borrower with any other company Any insolvency, liquidation, bankruptcy or similar situation proceeding in respect of the borrower

Accordingly, there is an uncertainty on the final outcome of the same and the extent of the liability that may arise in respect of guarantee given by GVKEL is presently not ascertainable. In the light of the above, we are unable to comment upon consequential impact, if any, arising out of the same in the accompanying consolidated financial statements.

iv. We draw attention to Note No.47(c) to the consolidated financial statements as per which GVK Gautami Power Limited (GVKGPL), a jointly controlled entity of GVKEL has been admitted into Corporate Insolvency Resolution Process (CIRP) during the current financialyear 2023-24, i.e. on October 20, 2023, based on petition filed by Edelweiss Asset Reconstruction Company Ltd, one of the lenders in the consortium of GVKGPL with the Honble NCLT, Hyderabad and Interim Resolution professional appointed by NCLT has taken possession of all assets of GVKGPL. GVKEL has already provided for an impairment for the full value of investment in GVKGPL of Rs 51,897 Lakhs. The GVKEL has also provided Corporate Guarantee to the lenders of GVKGPL with respect to the amount lent by them. This Corporate Guarantee has not been invoked by lenders so far (account became NPA on 1st October 2016) and no demands have been raised on GVKEL. This Corporate Guarantee may however be invoked by the Lenders of GVKGPL considering the default therein and Insolvency proceedings undergoing in GVKGPL. In such an eventuality, GVKEL may need to reimburse the same, especially considering that the net assets of GVKGPL is negative. The extent of the liability that may arise in respect of guarantee given is not determinable at present and no provision has been made in this regard in relation to such liability. In the light of the above, we are unable to comment upon consequential impact, if any, arising out of the same in the accompanying consolidated financial statements.

v. We draw attention to the following matters disclosed in Note 49(a) to the consolidated financial financial statements of GVK Bagodara Vasad Expressway Private Limited (GVKBVEPL), a step-down subsidiary of the holding company: a) The project of the GVKBVEPL was terminated by Gujarat State Road Development Corporation (GSRDC) by referring the defaults of the Concessionaire. Consequent to the termination of the project, GVKBVEPL has accounted cost incurred on the project of Rs.58,904 Lakh as amount receivable from the GSRDC as management has represented that the project of the GVKBVEPL was terminated due to the reasons attributable to the GSRDC. GVKBVEPL has disputed the termination notice and invoked Arbitration in terms of provisions of concession agreement. Tribunal having heard arguments of both sides has given a split verdict during the financial year 2023-24, dated 11th August 2023. Two out of three Judges have passed a combined award dated 11th August 2023 of Rs.41,296 Lakhs (Net) in favor of GSRDC and one Judge has passed a dissenting award dated 11th August 2023 of Rs.27,438 Lakhs (Net) in favor of the GVKBVEPL. Considering this split award and based on the facts and legal opinion obtained, the GVKBVEPL has filed an appeal before Commercial Court Ahmedabad and the matter is coming up for hearing on 20.06.2024. As per the management till date no signed order has been served on them. Accordingly, GVKBVEPL has not made any provision on recoverability of Rs.58,904 Lakhs and also with respect to amount decreed to be payable to GSRDC of Rs.41,296 Lakhs. There is an uncertainty on the final outcome of the same and the extent of the liability that may arise in respect of aforesaid matter is presently not ascertainable. In the light of the above, we are unable to comment upon consequential impact, if any, arising out of the same in the accompanying consolidated financial statements. b) All the loan accounts are non-performing assets and the GVKBVEPL has received recalled notices from the banks and financial institutions and hence borrowing from the banks and financial intuitions are treated as current borrowings. Balances of borrowings (including interest accrued thereon) from lenders amounting to Rs.940,26 lakhs as at March 31, 2024 as per books of accounts are unconfirmed. In absence of such confirmations, we are unable to comment on the appropriateness of carrying amount of borrowing (along with interest accrued thereon and penal interest/ penal charges) . aspresentedinConsolidatedfinancialstatements

The above issues are reported as Qualification by the auditors as well in the audit report on the standalone financial statements of GVK Bagodara vasad expressway Pvt Ltd, subsidiary of GVKTPL vide their audit report dated April 29, 2024.

vi. As discussed in detailed in Note 48 to the consolidated financial statements regarding annulment of settlement by Edelweiss with respect to their loans / NCDs to GVKEL and Alaknanda Hydro Power Company Limited (AHPCL), non-accounting of estimated increase in liability on account of annulment of settlement terms by Edelweiss (amount not ascertained), invocation and transfer by Edelweiss of 46,60,11,000 Equity shares of AHPCL held by GVKEL of Rs.10 each, recording of exceptional loss of Rs.19,486 lakhs during the year ended March 31, 2023 by GVKEL on account of invocation of pledged shares and transfer by Edelweiss (being difference in face value of pledged shares invoked by Edelweiss and the liability of Edelweiss appearing in books of GVKEL and AHPCL), recording of discharge of liability of Edelweiss pending legal suit before Honble Delhi High Court, wherein GVKEL pleaded that as a consequence of the invocation and transfer of a valuable asset, GVKEL liability towards the loan has been discharged and since the value of share is far in excess of the outstanding loan liability, the excess share to be returned. Next hearing of the case is scheduled on July 09, 2024.

Due to above mentioned default in the repayment of amount due on Loan / NCDs, ECL Finance Limited, Edelweiss Asset Reconstruction Company Limited, India Credit Fund II & Ecap Equities Limited (collectively referred to as "Edelweiss") (through its debentures trustee namely Catalyst Trusteeship Limited) has filed petition with the Honble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against the company and GVK Energy Ltd. on October 21, 2022, the company has filed its replies and next hearing of the case is scheduled onJuly 12, 2024.

Meanwhile, during the current financial year 2023-24, AHPCL, GVKEL and GVKPIL has entered into another settlement agreement with the lenders on October 09, 2023, which requires to pay Rs 33,000 Lakhs and simple interest @12.50% pa is payable w.e.f. 1st November 2023. The entire amount along with interest is to be paid on or before 30th November 2023. The GVKPIL Group could not comply with the settlement terms and requested for extension of time to Edelweiss and they have extended the time till 30th Jun2024 with phased payments. On 27th February24 the lead lender of Alaknanda Hydro Power Company Limited has approved the release of Rs 20,000 Lakhs out of Rs 33,000 Lakhs to be paid and Rs.13,000 Lakhs to be brought in by GVKPIL group. Till date GVKPIL group has paid an amount of Rs 9,150 Lakhs out of Rs 13,000 Lakhs to be brought in by them. There are delays in payment of this phased amount as well. In case of failure to comply with any of the terms and conditions specified, this settlement shall stand revoked without any notice and the original dues payable by the GVKPIL Group /Borrower shall be reinstated and lender shall be entitled to recover the total dues together with applicable interest. Management has represented that they can make remaining payment and waiting for approval of all lenders of

AHPCL. In view of the same, we are unable to comment on the accounting done in this regard in books of account and the ultimate impact of the same including of the invocation of the settlement offer by Edelweiss, invocation of pledged shares of AHCPL by Edelweiss, invocation of corporate guarantee issued by the GVKPIL and GVKEL and impact of the proceedings in the NCLT, if any on the consolidated financial statements till the payment of dues as per settlement agreement.

Further, in the light of the above, we are unable to comment upon consequential impact, if any, arising out of the same in the accompanying consolidated financial statements including with respect to the balance amount of investments, loans and trade receivables of GVKEL aggregating to Rs.94,961 Lakhs in books of GVKPIL.

vii. As discussed in detailed in Note 47(a) to the Consolidated Financial statements regarding GVK Coal (Tokisud) Private

Limited ("GVKCTPL"), a step-down subsidiary of the Holding Company. The Honble Supreme Court of India had deallocated dedicated coal mine allotted to GVK Power (Goindwal Sahib) Limited (GVKPGSL). GVKCTPL, a subsidiary company of GVKEL and mine operator was offered a compensation by the Nominated Authority of Rs.11,129 Lakhs as against carrying value of assets of Rs.31,113 Lakhs as at March 31, 2017. GVKCTPL had appealed against the said order in the Honble High Court of Delhi. The aforesaid court vide its order dated March 09,2017, directed GVKCTPL to submit its claim to the adjudicating authority constituted under the Coal Mines (Special Provisions) Act, 2015. Subsequently GVKCTPL submitted its claim for the balance amount of Rs. 19,882 Lakhs to the aforesaid authority. The nominated authority under the Ministry of Coal vide its order dated 16th March 2022 has further approved and released compensation of Rs.13,867 lakhs. Out of this an amount of

Rs.8,883 lakhs have been deposited by nominated authority in interest bearing account with Registrar General of the Court as per the directions of the high court of Delhi dated 11th April 2022 and an amount of Rs.4,984 lakhs have been paid to lenders by nominated authority towards the balance dues payable as per the claims made by the lenders as on the date of vesting orders less the amount already paid to the lenders. Including the above amount of Rs 4,984 lakhs, a total of Rs 23,761 Lakhs, being the due on vesting date has been paid to the lenders. Nominated authority has advised in the above order to approach Coal Tribunal in respect of disputes including the compensation disallowed with regard to R&R costs. The GVKCTPL has accordingly filed the appeal under sec. 27 of the Coal Mines (Special Provisions) Act, 2015 with Coal Tribunal for Rs 34,830 lakhs on August 01, 2022 and the next hearing of the case is scheduled on June 20, 2024.

The GVKEL, holding company, has given corporate guarantee for the loan taken by the GVKCTPL for which no provision has been made at present considering the uncertainties. In the light of the above, we are unable to comment on the recoverability of assets with carrying value of Rs.6,015 Lakhs and the liability to be provided towards the Corporate Guarantee issued together with consequential impact, if any, arising out of the same in these accompanying consolidated financial statements.

viii.We draw attention to the note 49(b) which states that the GVK Deoli Kota Expressway Private Limited (GVK DKEPL), a wholly owned step-down subsidiary of the Holding company on June 25, 2019, has issued a termination notice under Article 37.2.2 of the Concession Agreement for termination on account of material breach and defaults on the part of National Highway Authority of India (NHAI) during thecourse shiftingof utilities, obtaining constructionlikeprovidingRight Way(ROW), approvals & clearances, alternate route & prevention of complete user fee collection etc., which has resulted in significant delays in construction of expressway.

On September 12, 2019, NHAI issued a termination notice as per clause 37.2.1 of the Concession Agreement for non-fulfillment of the obligation as stated in the Concession Agreement by Concessionaire. NHAI by virtue of this notice, is deemed to have taken possession and control of the project highway along with all the equipment on or at site. After this termination notice toll plaza is deemed to have been transferred to NHAI and from September 16, 2019, onwards NHAI started collecting the toll on the project highway.

The matter is under Arbitration and the company has filed claim documents with Tribunal and NHAI has filed statement of defense and next cross examining the witness of NHAI is scheduled on July 29, 2024.

GVK DKEPL has defaulted in repayment of principal amount and payment of interest on such term loans taken from consortium of banks and financialintuitions. As a result, the lenders have classified the term loan as non-performing asset and have recalled the entire facilities extended to the company. As result of that, the term loans have become repayable on demand, Company has not received borrowing statements and confirmation of borrowing balances from lenders. Accordingly, we are not in a position to comment on the interest not accounted etc. and the impact of the same on the consolidated financial statements.

The Concession Agreement being the sole agreement executed by the Company, termination of the same has now resulted into liquidation basis of accounting which has been adopted in preparation of these financial statements of GVK DKEPL. The company has recorded receivable from NHAI after setting off toll assets and other related future liabilities, which is subject to decision and process of arbitration between Company and NHAI.

GVK DKEPL based on its internal assessment is confident that it will be able to recover the balance amount spent on the project till date including its various claims and accordingly the management believes that it is appropriate to recognize total assets aggregating to Rs.44,008 lakh; comprising Rs.43,637 lakh as Other Non-Current assets, Rs.9 lakh as Property Plant & Equipment and Rs 362 Lakh as the Current Assets on March 31,2024 at carrying value in the financial Considering the litigation and uncertainties, we are not in a position to comment on the recoverability of these assets as well as claims made by respective parties.

The auditors of GVKDEPL have given an EOM in this regard in their audit report dated 29th April 2024.

ix. Note 53 to the consolidated financial statements regarding investigation by various Government agencies on various alleged irregularities relating to conflict of interest, misuse of funds, money laundering and other matters, pending completion of which and non-provision of certain related information sought from the holding company by us including complete copy of the Enforcement Directorate complaint. CBI has filed a charge sheet before the Chief Metropolitan Court, Mumbai on February 09, 2023, laying as allegation under section 120B read with section 420 of IPC against Mumbai International Airport Limited (MIAL), Vice Chairman & erstwhile CFO of the Holding Company and four other GVKPIL group companies apart from others. The Court has granted bail to all the accused. The main issue alleged is siphoning of fund of MIAL eventually causing a loss to Airport Authority of India (AAI). Vide order dated 08.12.2023, fresh cognizance of offences in the chargesheet has been taken and accused persons have been summoned. However, the said order has been currently stayed by the Ld. Sessions Court, Mumbai in revision petitions preferred by various accused persons and therefore, the proceedings are currently stayed in the matter and matter will resume only once the stay order gets vacated by the Revision Court. The company is of the view that the case will not stand the test of scrutiny of the court and will eventually be dismissed. The company is also of the view that the charges are unsubstantiated and no offence u/s section 420 IPC is made out as there is no loss to AAI, Government, or any Tax Authorities as alleged.

In addition to be above, the Enforcement Directorate (ED) had also taken up the investigation under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR registered by the CBI. ED had filed a complaint in April 2021 on the same matters against the above-mentioned parties and some of the subsidiaries, joint ventures and step-down subsidiaries of the Company, their directors and officers. ED had filed a complaint before the City Court and Additional Session Judge, Greater Bombay under Section 45 of Prevention of Money Laundering Act, 2002 for commission of offence of Money laundering under section 3, read with section 70, Punishable u/s 4 of the Prevention of Money Laundering Act, 2002. The matter is currently at stage of adjudication of application on behalf of Accused-4 seeking supply of all the un relied documents and un relied statement u/s 50 PMLA and is fixed for filing reply of Enforcement Directorate on 27.06.2024.

The Audit Committee of the Holding Company, based on the legal advice received by the Audit committee of Mumbai International Airport Limited (MIAL), have decided not to proceed with any independent investigation on the matters mentioned in the FIR or the complaint filed by ED. Considering the status of the proceedings with cases related to CBI and ED, the implications, if any, that may arise on the GVKPIL group cant be ascertained and the impact if any of the same on the consolidated financial statements cannot be commented upon.

x. We draw attention to Note 51 to the consolidated financial statements regarding GVK Perambalur SEZ Private Limited (GVK

SEZ), a wholly owned subsidiary company. GVK SEZ has Investment Property having book value of Rs.11,655 Lakh as on 31st March 2024. GVK SEZ stood as a Guarantor and mortgaged its land having book value as mentioned above (admeasuring 2,506.25 Acres) to Syndicate Bank (since merged with Canara Bank) on account of loans taken by the GVKPIL (the Holding Company). GVKPIL has since repaid the loan taken from Canara Bank and the bank has also acknowledged the same. However, Canara bank has not issued certificateand has not returned the original title documents by exercising the right of nodue general lien under section 171 of Indian Contract Act,1872 and has enforced general lien over the title deeds in the name of GVK SEZ for liabilities of GVK Coal (Singapore) PTE Ltd, an associate of GVKPIL. GVKPIL and GVK SEZ have jointly filed writ petition before High Court, Telangana on October 27, 2021, stating that Bank exercising of general lien under section 171 of the Indian Contract Act, 1872 is wholly misconceived and illegal and contrary to the terms of Guarantee extended by the GVK SEZ and the matter is yet to be listed. GVKPIL has obtained independent legal opinion based on which the outcome of the subject matter will be positive and the bank will be directed to release the documents given as security. Further, Enforcement Directorate (ED) has provisionally attached the said Land property in view of investigation under Prevention of Money Laundering Act (PMLA). However, Honble High Court of Telangana vide its order dated April 22, 2021 has stayed the proceedings by issuing Show Cause Notice to ED. As on March 31, 2024, the status remains the same. The matter is under litigation. Pending these litigations, the impact of the same on the GVKPIL Group is not determinable.

4. Emphasis of Matter i. We draw attention to Note 55 to the consolidated financial statements regarding sale of majority holding of GVK Airport Developers Limited (GVKADL) by company to Adani Airport Holding Limited (AAHL) as per binding co-operation agreement dated August 31, 2020 and other related transaction documents. AAHL has acquired and hold the securities as per cooperation agreement at the end of the financial year. The management considered the Optionally Convertible Debentures (OCDs) of Rs.112,464 Lakhs held by AAHL as per co-operation agreement in view of the terms of arrangement. Accordingly, the securities held in the name of AAHL have been classified as Current Investments of company in the consolidated financial statements. These investments in OCDs made by AAHL are yet to be transferred in the name of the company.

ii. We draw attention to Note No 47(d) and 47(e) of the consolidated financial statements regarding the financial statements of Alaknanda Hydro Power Company Ltd, a stepdown subsidiary of the Holding Company, the following matters: a) As per Note 47(d) to the consolidated financial statements, regarding Uttar Pradesh Power Corporation Limited (UPPCL) appeal before Appellate Tribunal for Electricity (APTEL) challenging UPERCs determination of Normative Annual Plant Availability Factor (NAPAF) for Multi Year Tariff (MYT) for the years 2015-19 and 2019-24. The AHPCL has submitted its responses to APTEL against the said appeal. Accordingly, in the opinion of the management the appeal filed by UPPCL is not tenable and no provision is required in this regard. b) Note no 47 (e) to the statement, regarding recoverability of reimbursement of water tax based on management legal assessment with respect to (i) applicability of water tax on water drawn for generation of electricity as demanded by Uttarakhand water resources management regulatory commission (‘UWRMRC) as per provisions of the Uttarakhand water management and regulatory act ,2013 and (ii) claiming the same from Uttar Pradesh power corporation limited (‘UPPCL") as reimbursement under change in law by amending power purchasing agreement with UPPCL("PPA") for the period August,2022 to March,2024. The claim made by the AHPCL for the period august,2022 to October ,2022 is not accepted by UPPCL vide their letter dated June 16,2023 on the ground that the AHPCL has not followed the change in law provision & stipulations under the PPA and the AHPCLs application before UPERC for amendment to PPA for reimbursement of water tax under the provisions of change in law. UPERC vide its order dt.01 April, 2024 has directed UPPCL to make interim payment against proof of payment of water tax paid by AHPCL from August, 2022 onwards and continue to make interim payment. In case Honble High Court of Uttarakhand decides levy of water tax is null & void, AHPCL shall be required to be claim refund from Uttarakhand Government along with carrying cost and the same shall be released to UPPCL along with such carrying cost.

The issue above is reported as Emphasis of Matter by the auditors in their audit report on the standalone financial statements of Alaknanda Hydro Power Company Ltd. (AHPCL), subsidiary of GVKEL vide their audit report dated April 24,

2024.

iii.We draw your attention to note no.50 of Consolidated Financial statements, regarding GVK Ratle Hydro Electric Project

Private Limited (GVK Ratle), a subsidiary of the holding company, GVK Ratle had entered into a concession agreement with J&K Power Development Department (JKPDD) for construction and operation of a hydro power plant on Build, Own, Operate and Transfer model. GVK Ratle started the project development and had spent/paid advances to the tune of Rs.101,552 lakhs (till March 31,2021) on various works. However,thereweresignificantdelays in the construction of the project due to the impediments like land acquisition and execution of land, leases, issues in relation to working conditions, disturbances and law and order problems, issues under the Indus Water Treaty, issues in relation to Water charges, status of Mega Power Project and taxes such as entry tax, sales and other local taxes etc.

GVK Ratle requested for termination of project and offered for an amicable settlement. JKPDD rejected such settlement offer stating that the delays tantamount to event of default from GVK Ratle. GVK Ratle had initiated the arbitration process and Tribunal vide its order dated 11th July20 and rectification order dated 7th September20 had accepted the contentions of GVK Ratke and had given an award of Rs.29,048 Lakhs in favor of GVK Ratle. Not satisfied with the order, GVK Ratle an appeal before district court, Kishtwar on 8th December,2020 against the said award, which is challenged by JKPDD and court granted the stay on proceedings Meanwhile, GVK Ratle has filed an appeal before Supreme Court, the supreme court stayed all proceedings before the District Court, Kishtwar until it decides the issue relating to applicability of J&K Arbitration Act, 1997, even after it was repealed by J&K State Reorganization Act, 2019. The matter is yet to be listed for hearing before the Supreme Court.

GVK Ratle had also entered into a settlement agreement with its lender on 24th November21 and the award realized from the JKPDD will be paid to lender as per the settlement agreement. Considering the fact of termination of the project and settlement with the lenders, the GVK Ratle has adopted the liquidation basis of accounting in preparation of these financial statements and treated the amount recoverable as per award as its asset with similar amount payable to lender as its liability as per settlement agreement.

Similar matter has been included as an Emphasis of matter paragraph (EOM) in the audit report on the standalone financial statements of GVK Ratle Hydro Electric Project Private Limited, the stepdown subsidiary of the Holding Company issued by an independent firm of Chartered Accountants vide their report ated April 25, 2024.

iv. We draw attention to the following matters disclosed in Note 49 (C) to the consolidated financialstatements regarding the financial statements of GVK Transportation Private Ltd (GVKTPL), subsidiary of the holding company which states that GVKTPL has given the corporate guarantee to the lender (Yes Bank Ltd.) who has assigned the debt to J.C. Flowers Asset Reconstruction Pvt Ltd. Due to above default in repayment of loan by GVKDKEPL, J.C.Flowers Asset Reconstruction Pvt Ltd, has invoked the corporate guarantee and filed the petition with the Honble NCLT, Hyderabad invoking Corporate Insolvency Resolution Process against GVKTPL on February 24, 2022 and the next hearing of the case is scheduled on May 29, 2024 for orders.

5. Managements and Board of directors Responsibility for the Consolidated Financial Statements.

The Holding Companys Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows and changes in the equity of the group including its associates in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Directors of the companies included in the Group and of its associate and joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, its associate and joint ventures 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 the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associate and joint ventures are responsible for assessing the ability of the Group and of its associate 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 management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group and of its associates and joint ventures are responsible for overseeing the financial reportingits associates and joint ventures. process ofthe Group and of

6. Auditors Responsibilities for the Audit of the Consolidated Financial Statements

Our responsibility is to conduct an audit of the Groups Consolidated Financial Statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the significance of the matters involving uncertainties, described in the "Basis of Disclaimer of opinion"sectionofourreport,notwithstandinghavingobtainedsufficient appropriate audit evidence regarding each most of the individual uncertainties, it is not possible for us to form an opinion on the Consolidated financial Statements due to the potential interaction of the uncertainties and their possible cumulative effect on these Consolidated

Financial Statements.

We are independent of the Company in accordance with the Code of Ethics issued by The Institute of Chartered Accountants of India (ICAI) and the provisions of Companies Act 2013 that are relevant to our audit of the financialstatements in India under the Companies Act 2013 and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Companies Act 2013.

7. Other Matters

We did not audit annual financial statements of 14 subsidiaries included in the consolidated audited financial statements, whose annual financial reflects (before adjustments for consolidation) total assets of Rs. 9,49,147 Lakhs and net assets (total equity) of Rs. 2,26,954 Lakhs as at March 31, 2024, revenues from operations of Rs.1,08,011 Lakhs, total net loss after tax of Rs.19,213 Lakhs and total comprehensive loss of Rs.19,124 Lakhs, for the year ended March 31, 2024, respectively, as considered in the consolidated financial statements. These annual financial statements have been audited by respective auditors. The Independent Auditors reports on financial statements /financial information of these entities have been furnished to us and our opinion on the consolidated financial statements in so far as it relates to the in respect of these entities, is based solely on the report of such auditors and the procedures performed by us as stated in paragraph above.

The consolidated audited financial statements include the GVKPIL group‘s share of one statements reflect (before adjustments for consolidation) GVKPIL Groups share of profit

Million) for nine months ended March 31, 2024 which is adjusted against the previous losses.

Because of the matters involving uncertainties, described in the "Basis of Disclaimer of opinion" section of our report, we are unable to comment on the resultant impact on the consolidated financial to our reliance on the work done and the reports of the other auditors.

8. Report on Other Legal and Regulatory Requirements

8.1. With respect to the matters specified in paragraphs 3(xxi) and 4 of the Companies (Auditors Report) Order, 2020 ("the Order" / "CARO"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, to be included in the Auditors report, according to the information and explanations given to us, the details of qualifications / adverse remarks made by respective auditors of the subsidiaries, associates and joint ventures in the CARO reports of the respective companies included in the consolidated financial statements are as follows:

Name of the company	CIN	Type of company (Holding/ Subsidiary/ Associate/Joint Venture)	Clause number of the CARO Report which is qualified or Adverse
1 Alaknanda Hydro Power Company Limited	U40100TG1996PLC074796	Subsidiary	(vii) (a), (b) & (ix)(a), (b)
2 GVK Coal (Tokisud) Company Private Limited	U10101TG2005PTC047275	Subsidiary	(vii)(a), (viii)
3 GVK Deoli Kota Expressway Private Limited	U45209TG2010PTC067999	Subsidiary	(vii) (a), (ix) (a) & (xvii)
4 GVK Bagodara Vasad Expressway Private	U45200TG2011PTC072500	Subsidiary	(vii) (a), (ix) (a) & (xvii)
Limited
5 GVK Airport Services Private Limited	U45400TG2007PTC054816	Subsidiary	(iii)(b), (xvii)
6 GVK Developmental Projects Private Limited	U74140DL2006PTC156789	Subsidiary	(iii)(b), (xviii)
7 Sutara Roads & Infra Limited	U45300TG2015PLC099082	Subsidiary	(iii)(b) & (xvii)
8 GVK Ratle Hydro Electric Project Pvt ltd	U40108TG2010PTC069067	Subsidiary	(xvii)
9 GVK Jaipur Expressway Limited	U45203TG2002PLC063406	Subsidiary	(iii)(b) (c) (f), (vii) (a),(b),
			(xvi) (d), (xix)
10 GVK Perambalur SEZ Private Limited	U45209DL2006PTC156157	Subsidiary	(xvii)
11 GVK Transportation Private Limited	U63030TG2009PTC064808	Subsidiary	(vii)(b), (xix)

8.2. 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, as noted in the "Other Matter" paragraph, we report, to the extent applicable, that a) We have sought and obtained all the all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section above, we are unable to state whether proper books of account as required by law have been kept so far as it appears from our examination of those books and report of the other auditors. c) The Consolidated balance sheet, the Consolidated statement of profit and loss (including other comprehensive income), the Consolidated statement of changes in equity and the Consolidated statement of cash flows dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of these Consolidated Financial Statements. d) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section above, we are unable to state whether the Consolidated financial statements comply with the IndianAccountingStandardsspecifiedunder section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rule 2014. e) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section above, we are unable to state whether they have adverse effect on the functioning of the Group and its associate. f) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2024 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its Group companies incorporated in India, none of the directors of the Group companies, its associate companies and joint ventures incorporated in India is disqualified as on March appoint 31, 2024from being ed as a director in terms of Section 164(2) of the Act. g) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer of Opinion paragraph above. h) With respect to the adequacy of the internal financial controls over financial its joint ventures and the operating effectiveness of such controls, refer to our separate report in Annexure A. Our report expresses a disclaimer of opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to Financial Statement. 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 as also the other financial information of the subsidiaries, associates and joint ventures: i. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion section above, we are unable to state whether the Holding Company has disclosed the impact of pending litigations on its financial position in its consolidated financial statements Refer notes 39 to the consolidated financial statements.

ii. Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section above, we are unable to state whether the Group has long term contracts as at March 31, 2024 for which there were no material foreseeable losses. Also, the company did not have any derivative contracts as at March 31, 2024. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the holding Company during the year ended March 31, 2024; iv. (a) The Management has represented and refer Note no.57 to the consolidated financial statements, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Holding Company or its subsidiary companies, associates companies and joint venture companies incorporated in India to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the Holding Company or its subsidiary companies, associates companies and joint venture companies incorporated in India ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented and refer Note no.57 to the consolidated financial statements, that, to the best of its knowledge and belief, no funds have been received by the Holding Company or its subsidiary companies, associates companies and joint venture companies incorporated in India from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Holding Company or its subsidiary companies, associate companies and joint venture companies incorporated in India shall, 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.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, due to the possible effects of the matter described in the Basis for Disclaimer of Opinion section above we are unable to state whether the representations under sub? clause (i) and (ii) of Rule 11(e) of the Companies Act (Audit and Auditors) Rules, 2014 as provided under (a) and (b), contain any material mis-statement. v. The Holding Company has neither declared nor paid any dividend during the year vi. Based on our examination, which included test checks, and that performed by the respective auditors of the subsidiaries which are companies incorporated in India whose financial statements have been audited under the Act, except for the instances mentioned below, the company, subsidiaries, have used an accounting software account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we and respective auditors of the above referred subsidiaries, did not come across any instance of audit trail feature being tampered with. As reported by the Auditors of AHPCL, "audit trail feature was enabled with effective from 19 October, 2023 and the same has operated therefrom throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with. The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting software used for maintaining the books of account".

In case of GVKCTPL and GVK Ratle, no audit trial feature noted in Tally system used by these companies. The feature of recording audit trail (edit log) facility was not enabled at the database level at GVKPIL Group to log any direct data changes for the accounting software used for maintaining the books of account.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

		For T R Chadha & Co LLP,
		Chartered Accountants
		FRN: -06711N\N500028
		Sheshu Samudrala
		(Partner)
Date:	28.05.2024	Membership No-235031
Place: Hyderabad	UDIN: 24235031BKCTTZ5035