FUTURE GMR INFRA Auditors Report

We have audited the accompanying standalone financial statements of GMR
infrastructure Limited (''''the Company''''), which comprise the Balance
Sheet as at March 31, 2016, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.

Management''''s Responsibility for the Standalone Financial Statements

The Company''''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (''''the Act'''') with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with 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. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the standalone financial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.

Auditor''''s Responsibility

Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the standalone financial statements are free
from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the standalone financial statements.
The procedures selected depend on the auditor''''s judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Company''''s preparation of the standalone financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by the Company''''s
Directors, as well as evaluating the overall presentation of the
standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.

Basis for Qualified Opinion

1. As detailed in Note 13(6) to the accompanying standalone financial
statements for the year ended March 31, 2016, the Company through its
subsidiary, GMR Infrastructure (Mauritius) Limited (''''GIML'''') has
investments of Rs. 396.81 Crore (USD 5.94 Crore) (including equity
share capital of Rs. 154.24 Crore (USD 2.31 Crore) and subordinate
loans and interest accrued thereon of Rs. 242.57 Crore (USD 3.63 Crore)
towards 77% equity shareholding in GMR Male International Airport
Private Limited (''''GMIAL''''). Further GIML, has placed fixed deposits of
Rs. 864.90 Crore (USD 12.95 Crore) with lenders towards loan taken by
GMIAL and the Company has given a corporate guarantee of Rs. 2,620.72
Crore (USD 39.25 Crore) to the lenders in connection with the
borrowings made by GMIAL. The Concession Agreement entered into between
GMIAL, Maldives Airport Company Limited (''''MACL'''') and Ministry of
Finance and Treasury (''''MoFT''''), Republic of Maldives for the
Rehabilitation, Expansion, Modernization, Operation and Maintenance of
Male International Airport (''''MIA'''') for a period of 25 years was
declared void ab initio by MACL and MoFT and MACL has taken possession
of MIA with effect from December 8, 2012. GMIAL has initiated the
arbitration process to seek remedies under the said agreement and on
June 18, 2014, the tribunal delivered its award declaring that the
Concession Agreement was not void ab initio and was valid and binding
on the parties. However, the quantum of the damages is yet to be
decided and accordingly, pending final outcome of the arbitration, such
investments have been carried at cost in the standalone financial
statements as at March 31, 2016, as the management is of the view that
GMIAL will be able to recover at least the carrying value of the assets
of Rs. 1,594.68 Crore (USD 23.88 Crore) including claim recoverable of
Rs. 1,273.14 Crore (USD 19.07 Crore) as at March 31,2016.

Further, GMIAL had executed work construction contracts with GADL
international Limited (''''GADLIL''''), a subsidiary of the Company and other
service providers for Rehabilitation, Expansion, and Modernization of
MIA. Pursuant to the aforesaid takeover of the airport by MACL, GMIAL
has terminated the contracts with GADLIL and these service providers
and have received claims from GADLIL and other service providers
towards termination payments. However, no such claims relating to the
termination of contracts have been recognized in the standalone
financial statements of GMIAL as at March 31, 2016. The takeover of MIA
by MACL, initiation of arbitration proceedings and its consequential
impact on the operations indicate the existence of a material
uncertainty that may cast a significant doubt about the going concern
of GMIAL and GADLIL.

Having regard to the uncertainty in view of the dispute and the final
outcome of the matter, we are unable to comment on its impact on the
carrying value of the investments pertaining to the aforesaid entities
and any other consequential impact that may arise in this regard on the
accompanying standalone financial statements for the year ended March
31, 2016. In respect of the above matter, our audit report for the year
ended March 31,2015 was similarly qualified.

2. As detailed in Note 13112(b)] to the accompanying standalone
financial statements for the year ended March 31, 2016, the Company
along with its subsidiary has made investments of Rs. 735.80 Crore in
GMR Kishangarh Udaipur Ahmedabad Expressways Limited (''''GKUAEL''''), a
subsidiary of the Company (including loans of Rs. 35.80 Crore and
investments in equity shares and preference shares of Rs. 700.00
Crore), which is primarily utilized by GKUAEL towards payment of
capital advance of Rs. 590.00 Crore to its EPC contractor and Rs.
137.47 Crore towards indirect expenditure attributable to the project
and borrowing costs (''''project expenses''''). GKUAEL has also given a bank
guarantee of Rs. 269.36 Crore to National Highways Authority of India
(''''NHAD. GKUAEL issued a notice of intention to terminate the Concession
Agreement and a notice of dispute to NHAI invoking arbitration
provisions of the Concession Agreement during the earlier years. Both
the parties have appointed their arbitrators and the arbitration
process is pending commencement. Pursuant to the notice of dispute,
GKUAEL terminated the EPC contract on May 15, 2015 and has received
claims towards such termination. However, no such claims have been
recognized in the standalone financial statements of GKUAEL as at March
31, 2016.

Based on its internal assessment, the management of the Company made a
provision for diminution in the value of investments amounting to Rs.
137.47 Crore and advances amounting to Rs. 5.70 Crore (including Rs.
12.18 Crore during the year ended March 31, 2016). However, the notice
of dispute and initiation of arbitration proceedings indicate the
existence of a material uncertainty that may cast a significant doubt
about the going concern of the GKUAEL. Having regard to this
uncertainty, we are unable to comment on the final outcome of the
matter and its consequential impact on the carrying value of the
Company''''s investments in GKUAEL in the accompanying standalone
financial statements of the Company for the year ended March 31, 2016.
In respect of the above matter, our audit report for the year ended
March 31,2015 was similarly qualified.

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effect of the matters
described in sub-paragraph 1 and 2 in the Basis for Qualified Opinion
paragraph, the aforesaid standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, its loss and its cash flows for the year ended on
that date.

Emphasis of Matter

We draw attention to the following matters in the notes to the
accompanying standalone financial statements for the year ended March
31, 2016:

a. Note 13(7) regarding investments of Rs. 394.17 Crore (including
investments in equity / preference shares of Rs. 244.70 Crore made by
the Company and its subsidiaries and loans and interest accrued thereon
of Rs. 149.47 Crore) as at March 31, 2016 in GMR Ambala Chandigarh
Expressways Private Limited (''''GACEPL''''), a subsidiary of the Company.
Though GACEPL has been incurring losses since the commencement of
commercial operations and the matter is currently under arbitration,
based on management''''s internal assessment and legal opinion obtained by
the management of GACEPL, such investments have been carried at cost.
Accordingly, no provision for diminution in the value of investments
has been made in the accompanying standalone financial statements for
the year ended March 31, 2016.

b. Note 13(8) regarding (i) cessation of operations and the losses,
including cash losses incurred by GMR Energy Limited (''''GEL'''') and GMR
Vemagiri Power Generation Limited (''''GVPGL''''), subsidiaries of the
Company and the consequent erosion of net worth resulting from the
unavailability of adequate supply of natural gas and (ii) rescheduling
of the commercial operation date and the repayment of certain project
loans by another subsidiary of the Company, GMR Rajahmundry Energy
Limited (''''GREL''''), pending linkage of natural gas supply. Continued
uncertainty exists as to the availability of adequate supply of natural
gas which is necessary to conduct operations at varying levels of
capacity in the future and the appropriateness of the going concern
assumption is dependent on the ability of the aforesaid entities to
establish consistent profitable operations as well as raising adequate
finance to meet short term and long term obligations. The accompanying
standalone financial statements of the Company for the year ended March
31, 2016 do not include any adjustments that might result from the
outcome of this significant uncertainty.

c. Note 13(9) regarding uncertainties in tying up power supplies,
achieving profitability in operations, mega power status, refinancing
of existing loans at lower rates of interest, other key assumptions
made in the valuation assessment of the investments in GMR Chhattisgarh
Energy Limited (''''GCHEPL''''), a subsidiary of the Company. The carrying
value of the investments in GCHEPL is critically dependent upon the
achievement of the key assumptions as discussed in the aforesaid note.
In the opinion of the management of the Company, no further provision
for diminution in the value of investments (including loans) is
considered necessary at this stage in the accompanying standalone
financial statements for the year ended March 31,2016 for the reasons
explained in the said note.

d. Note 13112(a)] regarding investments of Rs. 680.10 Crore (including
investments in equity / preference shares of Rs. 302.03 Crore made by
the Company and its subsidiary and loans of Rs. 378.07 Crore) as at
March 31, 2016 in GMR Hyderabad Vijayawada Expressways Private Limited
(''''GHVEPL''''), a subsidiary of the Company. GHVEPL has been incurring
losses since the commencement of commercial operations and the Company
has made a provision of Rs. 269.08 Crore (including Rs. 137.67 Crore
during the year ended March 31, 2016) for the diminution in the value
of the investments as at March 31,2016. Based on a valuation
assessment, a legal opinion and for reasons explained in the said note,
management of the Company believes that no further provision for
diminution in the value of investments is considered necessary in the
accompanying standalone financial statements for the year ended March
31, 2016.

e. Note 13114(a)] and 13114(b)] regarding the uncertainties pertaining
to coal prices and other key assumptions made by the management in the
valuation assessment of its investments in entities which are engaged
in the operation and development of coal mines. In the opinion of the
management of the Company, no further provision for diminution in the
value of investments (including loans) is considered necessary at this
stage in the accompanying standalone financial statements for the year
ended March 31, 2016 for the reasons explained in the said notes.

Our opinion is not qualified in respect of these aforesaid matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''''s report) Order, 2016 (''''the
Order'''') issued by the Central Government of India in terms of sub-
section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.

2. As required by section 143 (3) of the Act, we report that:

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

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

(c) The balance sheet, the statement of profit and loss, and the cash
flow statement dealt with by this Report are in agreement with the
books of account;

(d) Except for the matters described in the Basis for Qualified Opinion
paragraph, in our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014;

(e) The matters described in the Basis for Qualified Opinion paragraph,
Emphasis of Matter paragraph and Qualified Opinion paragraph of
''''Annexure II'''' to this report in our opinion, may have an adverse effect
on the functioning of the Company;

(f) On the basis of written representations received from the directors
as on March 31, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2016, 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 the Basis for Qualified
Opinion paragraph above.

(h) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report dated May 30, 2016 in
"Annexure II" to this report;

(i) With respect to the other matters to be included in the Auditor''''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements - Refer Notes
13(6),13(7), 13[12](a), 13[12](b), 13(13), 13(15), 13(21) and 34 to the
standalone financial statements;

ii. Except for the possible effect of the matters described in
sub-paragraphs 1 and 2 in the Basis for Qualified Opinion paragraph,
the Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.

Annexure I referred to in clause 1 of paragraph on the report on other
legal and regulatory requirements of our report of even date

Re: GMR Infrastructure Limited

(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;

(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.

(c) According to the information and explanations given by the
management of the Company, the title deeds of immovable properties
included in fixed assets are held in the name of the Company.

(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies were
noticed on such physical verification.

(iii) According to the information and explanations given by the
management of the Company, the Company has not granted any loans,
secured or unsecured to companies, firms, limited liability
partnerships or other parties covered in the register maintained under
section 189 of the Act. Accordingly, the provisions of clause 3(iii)
(a), (b) and (c) of the Order are not applicable to the Company and
hence not commented upon.

(iv) In our opinion and according to the information and explanations
given by the management of the Company, there are no loans, guarantees,
and securities granted in respect of which provisions of sections 185
and 186 of the Act are applicable and hence not commented upon. In our
opinion and according to the information and explanations given to us,
provisions of section 186 of the Companies Act 2013 in respect of
investments made has been complied with by the company.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Act, related to
the construction activities and are of the opinion that prima facie,
the specified accounts and records have been made and maintained. We
have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund,
employees'''' state insurance, income-tax, sales-tax, wealth-tax, service
tax, duty of customs, duty of excise, value added tax, cess and other
material statutory dues as applicable to the Company, have generally
been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given by the
management of the Company, no undisputed amounts payable in respect of
provident fund, employees'''' state insurance, income-tax, wealth-tax,
service tax, sales-tax, duty of customs, duty of excise, value added
tax, cess and other material statutory dues were outstanding, at the
year end, for a period of more than six months from the date they
became payable.

(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax and cess on account of any dispute, are as follows:

(Rs. in Crore)

Name of the Nature of Amount
statute dues (Rs. in Crore)

Finance Act, Service tax 41.42
1994

Central Excise Central 1.03
Act, 1944 excise duty
(including
penal charges
and excluding
interest)

Income Tax Income Taxes* 86.19
Act, 1961

Name of the Statute Period Forum where
for which dispute is
amounts pending
relates to

Finance Act, 1994 October Commissioner
2007 to of Service Tax,
March 2014 Bangalore

Central Excise Act, 1944 March Office of the
2011 to Commissioner
December of Customs,
2012 Central Excise and
Service Tax, Hyderabad-III
Commissionerate

Income Tax Act, 1961 FY 2006-07 Commissioner
to 2012-13 of Income Tax (Appeals)

*Net of Rs. 68.36 Crore paid by the Company.

(viii) In our opinion and according to the information and explanations
given to us by the management of the Company, the Company has not
defaulted in repayment of loans or borrowing to a financial
institution, bank or dues to debenture holders. The Company did not
have any outstanding loans or borrowing to government during the year.

(ix) In our opinion and according to the information and explanations
given to us by the management of the Company, the Company has utilized
the monies raised by way of initial public offer/further public offer
in the nature of rights issue of equity shares and debt instruments in
the nature of foreign currency convertible bonds (FCCBs) and term loans
for the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given to us by the
management of the Company, we report that no fraud by the Company or no
material fraud on the Company by the officers and employees of the
Company has been noticed or reported during the year.

(xi) According to the information and explanations given to us by the
management of the Company, the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi Company. Therefore,
the provisions of clause 3(xii) of the Order are not applicable to the
Company and hence not commented upon.

(xiii) According to the information and explanations given by the
management of the Company, transactions with the related parties are in
compliance with section 177 and 188 of the Act, where applicable, and
the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the
management of the Company and on an overall examination of the balance
sheet, the Company has not made any preferential allotment or private
placement of shares during the year under review. According to the
information and explanations given to us by the management of the
Company, the Company has complied with the provisions of section 42 of
the Act in respect of the private placement of FCCBs issued during the
year and that the amount raised, has been used for the purposes for
which the funds were raised.

(xv) According to the information and explanations given by the
management of the Company, the Company has not entered into any
non-cash transactions with directors or persons connected with him as
referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us and
based on a legal opinion obtained by the management of the Company, the
provisions of section 45-IA of the Reserve Bank of India Act, 1934 are
not applicable to the Company.


For S. R. BATLIBOI S ASSOCIATES LLP

ICAI firm registration number: 101049W/E300004

Chartered Accountants

per Sunil Bhumralkar

Partner

Membership number: 035141

Place: Bengaluru

Date: May 30, 2016

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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