FUTURE GMR INFRA Directors Report

Dear Shareholders,

The Board of Directors present the 20th Annual Report together with the
audited financial statements of the Company for the Financial Year (FY)
ended March 31,2016.

Financial Results and state of the Company''''s affairs

Your Company, as a holding company, operates in Airports, Energy,
Transportation and Urban Infrastructure business sectors through
various subsidiaries, associates and jointly controlled entities. The
Company has Engineering, Procurement and Construction (EPC) business as
a separate operating division to cater to the requirements of
implementing the projects undertaken by the subsidiaries and others,
including Railway projects.

Analysis of the Company''''s audited consolidated and standalone financial
results are given below:

(Rs. in Crore)

Particulars Consolidated Standalone
31, 2016 March
31,2015 March
31,2016 March
31, 2015

Revenue from operations 13,357.66 11,087.68 799.10 649.74

Revenue share paid /
payable to concessionaire
grantors (2,412.29) (2,064.86) - -

Operating and
expenditure (6,700.73) (6,468.18) (210.91) (200.03)

Other Income 454.27 327.46 15.07 19.48

Finance Costs (4,057.69) (3,571.86) (514.88) (537.29)

Depreciation and
amortisation expenses (2,266.16) (1,812.53) (15.77) (20.03)

(Loss)/Profit before
exceptional items,
tax expenses, minority
interest and (1,624.94) (2,502.29) 72.61 (88.13)
share of (loss)/ profit
of associates

Exceptional Items:

Profit on sale of
controlled entities 2.31 34.44 - -

Loss on impairment of
assets in subsidiaries (164.30) (115.74) - -

Reimbursement of
expenses pertaining
to earlier years
received by a subsidiary 51.42 - - -

Loss on account of
provision towards claims
recoverable - (130.99) - -

Breakage cost of interest
rate swap - (91.83) - -

Prcyvision for diminution
in value of investments
/advances in subsidiaries
/ associates (39.22) - (1,576.93) (262.40)

(Loss)/Profit before tax
expenses, minority
interest and share of
(loss)/ profit (1,774.73) (2,806.41)(1,504.32) (350.53)
of associates

Tax expenses (224.21) (152.81) (14.58) (2.12)

(Loss)/Profit before
minority interest
and share of (loss)/
profit of associates (1,998.94) (2,959.22)(1,518.90) (352.65)

Share of (loss/profit
from associates (5.52) (12.98) - -

Minority interest -
share of profit/(loss) (156.54) 238.91 - -

Net (Loss)/Profit after
tax, minority interest
and share of loss from
associates (2,161.00) (2,733.29)(1,518.90) (352.65)

Net (deficit) / surplus
in the statement of
profit and loss - Balance
as per last (4,006.89) (1,183.56) 62.81 429.37
financial statements

Transfer from debenture
redemption reserve 34.38 46.25 34.38 46.25

Surplus / (Deficit)
available for appropriation (6,133.51) (3,870.60)(1,421.71) 122.97

Appropriations (63.78) (136.29) (38.50) 60.16

Net deficit in the
statement of profit or loss (6,197.29) (4,006.89)(1,460.21) 62.81

Earnings per equity share (Rs.) - Basic and diluted (per equity share
of Rs. 1 each) (3.82) (6.46) (2.68) (0.83)

Consolidated financial results

Improved operating performance in Airport and Energy sectors and
commissioning of GMR Chhattisgarh Energy Limited (GCHEPL) and GMR
Rajahmundry Energy Limited (GREL) power plants resulted in consolidated
revenue increasing from Rs. 11,087.68 Crore in the previous year to Rs.
13,357.66 Crore in the current year. Airport, Energy, Highways, EPC and
other segments contributed Rs. 6,540.58 Crore (48.97%), Rs. 5,522.55
Crore (41.34%), Rs. 761.41 Crore (5.70%), Rs. 179.13 Crore (1.34%) and
Rs. 354.04 Crore (2.65%) respectively to the consolidated revenue from

Increase in operational cost, finance cost and depreciation charge was
mainly on account of commissioning of GCHEPL and GREL power plants and
operating GMR Vemagiri Power Generation Limited (GVPGL), GMR Warora
Energy Limited (GWEL) and GMR Kamalanga Energy Limited (GKEL) power
plants at higher capacity.

Inspite of the challenging economic conditions and difficult business
environment, your Company was successful in raising additional funds of
Rs. 1,401.83 Crore through rights issue and USD 30.00 Crore through
issuance of Foreign Currency Convertible Bonds ("FCCB"). GCHEPL and
GREL power plants were commissioned during the year.

Standalone financial results

During the year ended March 31, 2016, the revenue from operations of
the Company on standalone basis has increased by 22.99% from Rs. 649.74
Crore to Rs. 799.10 Crore on account of increase in interest income of
the Company.

During the year ended March 31,2016, based on an internal assessment,
the Company has made a provision of Rs. 1,576.93 Crore towards
diminution in value of its investment in GMR Highways Limited (GMRHL),
GMR Renewable Energy Limited (GREED and GMR Energy Limited (GEL),
primarily on account of their accumulated losses and diminution in
value of investments/advances in their subsidiaries. The same has been
disclosed as an exceptional item in the financial statements.

Dividend /Appropriation to Reserves

Your Directors have not recommended any dividend on equity shares for
the FY 2015-16. Preference dividend aggregating to Rs. 50,605 for the
FY 2015-16 at the rate of 0.001% per annum on 1,13,66,704 Compulsorily
Convertible Preference Shares (CCPS) of face value of Rs. 1,000/- each
has been provided in the books.


The net movement in the major reserves of the Company on standalone
basis for FY 2015-16 and the previous year are as follows:

(Rs. in Crore)

Particulars March 31,2016 March 31, 2015

General Reserve 40.62 40.62

Securities Premium Account 9,971.55 7,658.71

Surplus in Statement of Profit and Loss (1,460.21) 62.81

Debenture Redemption Reserve 125.44 121.33

Capital Reserve 141.75 -

Foreign currency monetary translation
difference account (0.89) -

8,818.26 7,883.47

Management Discussion and Analysis Report (MDA)

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

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

Airport Sector

Your Company''''s airport business comprises of 3 operating airports viz.,
Delhi and Hyderabad International Airports in India and Mactan Cebu
International Airport in Philippines. These Indian airports are owned
by your Company''''s subsidiary GMR Airports Limited (GAL) while the 40%
stake in GMR Megawide Cebu Airport Corporation (GMCAC) is held through
GMR infrastructure (Singapore) Pte. Limited, also your Company''''s

Your Company''''s aviation business comprises of GMR Aviation Private
Limited, a 100% subsidiary of the Company which is operating in the
general aviation space.

An overview of these assets during the year is briefly given below:

Delhi International Airport Private Limited (DIAL)

DIAL is a Joint Venture (JV) between GAL (64%), Airports Authority of
India (AAI) (26%) and Fraport AG Frankfurt Airport Services Worldwide
(Fraport) (10%). DIAL has entered into a long-term agreement to
operate, manage and develop the Indira Gandhi International Airport
(IGIA), Delhi. Malaysia Airports (Mauritius) Private Limited originally
owned 10% stake in the Joint Venture which has been purchased by GAL in
May 2015.

Highlights Of FY 2015-16:

DIAL surpassed the 48 million passenger mark in FY 2015-16, witnessing
a growth of 18% in traffic over previous year. Strong growth in
domestic cargo segment propelled DIAL to retain its number one position
in cargo traffic in india with a 4% overall growth in FY 2015-16 over
the previous year. Due to delay in determination of tariff for the
second control period, the tariffs of the first control period have

The non-aeronautical revenues grew by 19% over last year led by growth
in commercial non-aero sales and Land S Space rentals.

Air Asia India Ltd, Air Canada, Shandong Airlines, Bhutan Airlines and
Air Asia X commenced their operations from IGIA. New destinations like
Domodedvo - Moscow, San Francisco, Toronto and Kunming were added,
which were earlier unserved from Delhi Airport.

Existing solar power plant capacity of 2.14 MW at IGIA increased to
7.84 MW with commissioning of additional 5.70 MW capacity in FY
2015-16. The additional capacity is expected to generate 8.5 million
units of electricity per annum leading to savings of Rs. 3.0 to Rs. 3.5
Crore per annum.

Strong focus on developing organizational culture based on operational
excellence and customer focused initiatives helped DIAL to retain the
world number 1 airport rank in the 25-40 million passengers per annum
(mppa) category by achieving a score of 4.96 on a scale of 5, in 2015.

Key Awards and Accolades received in FY 2015-16:

Number 1 airport as per Airports Council International (ACI) Airport
Service Quality (ASQ) ranking for 2015 in the 25 to 40 mn passenger
category, second year in a row.

ACI Director General''''s Roll of Excellence 2015 for being ranked in top
5 airports in its category in the last five years.

''''Best Airport Staff in India and Central Asia'''' in 2016 SKYTRAX World
Airport Awards for second year in a row.

''''International Safety Award'''' in Distinction Category from British
Safety Council with an overall score of 60 (on 60 Point scale) for the
year 2016.

''''Golden Peacock Award for Sustainability'''' in the Aviation Sector for

India''''s smartest airport buildings at the Times of India-Honeywel Smart
Building Awards, 2015.

Best Emerging Airport-Asiaat the Asian Freight, Logistics and Supply
Chain (AFLAS) Awards.

CII Business Excellence Star Awards: Leaders in Operations Management S
Leaders in Customer Management 2015.

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL is a JV between GAL (63%), AAI (13%), Government of Telangana
(13%) and MAHB (Mauritius) Private Limited (11%) and has entered into a
long-term agreement to operate, manage and develop the Rajiv Gandhi
international Airport (RGIA), Hyderabad.

Highlights Of FY 2015-16:

GHIAL continued to record strong traffic growth in its 8th year of
operation. Passenger traffic touched 12.5 million, registering a
growth of 19% year on year (Y-o-Y). Similarly, Cargo also registered
impressive growth to reach 113,000 MT, a growth of 10% Y-o-Y. ATM (Air
Traffic Movement) also had a strong growth of 12% Y-o-Y ending the year
with 106,303. The year also showed remarkable progress towards GHIAL''''s
Mission of being the Gateway of Choice and Preferred Logistics Hub for
South and Central India region, marked by additions to the airline
count on both passenger (1 international and 2 domestic) and cargo (1
domestic) fronts and additional frequencies from the existing airlines.

Towards ensuring a well-rounded and enjoyable experience to its
passengers, the airport enhanced its retail and shopping experience by
modifying the layout to unidirectional flow, which has yielded
additional number of new stores and retail outlets at the passenger
terminal. The Airport charges for GHIAL (User Development Fee (UDF) and
Passenger Service Fee - Facilitation Component (PSF)) were successfully
restored vide the Interim Order from the Hyderabad High Court which has
enhanced the cash flow and the same was implemented with effect from
November 05, 2015. GHIAL also signed an escrow account with Air India
for collection of UDF and PSF, which is a mechanism that has aided
GHIAL in securing the dues and strengthening the cash flows.

To enhance the passenger experience, GHIAL has operationalized an end-
to-end E-Boarding process for domestic passengers, becoming the only
airport in India to implement the same. It has improved the efficiency
at each security check point and has started the journey of Indian
Aviation along the path of "Digital India'''' as envisaged by the Hon.
Prime Minister.

Adding another green milestone to GMR''''s clean energy journey, GHIAL has
commissioned a 5 MW Solar Power Plant for its captive consumption to
meet the airport''''s peak power demand. The airport also completely
refurbished Hajj Terminal which enhanced the passengers'''' and meeters'''' S
greeters'''' facilities. Despite challenges, GHIAL has always maintained
its focus on service quality and passenger delight and this continued
dedication saw the airport win accolades from passengers and industry
associations for its excellence in service delivery with ACI ranking
RGIA among the top 3 in the world for ASQ for the 7th year in a row.

Awards and Accolades received in FY 2015-16:

World''''s Third Best Airport 2015 in ASQ Rating by ACI, in 5-15 mn
passenger category.

Best Regional Airport in India and Central Asia at the Skytrax World
Airport Awards, a web based survey voted directly by passengers.

Emerging Cargo Airport of the Year, Region - India awarded by STAT
Times International Award for the second time in a row.

ACI Asia-Pacific Silver Recognition for Human Resources Excellence.

Cll Award for "Excellent Energy Efficient Unit" for a second time in a

Golden Peacock Environment Management Award for 2015.

Best Landscape - Garden Festival 2016 (sixth time in a row).

Airport Cities

As more and more aviation-oriented businesses are being drawn to
airport cities and transportation corridors radiating from them, a new
urban form is emerging, the Aerotropolis, stretching upto 20 miles (30
kilometers) outward from some airports. This concept, developed by Dr.
John Kasarda, has been adopted by GMR Group at its airports in
Hyderabad and Delhi and GMR Group is working towards developing an
ecosystem around the airports.

Both Delhi and Hyderabad have completed the master plan for their
landside developments and are engaged in the development of physical
infrastructure and discussions with potential tenants.

During the course of the year, DIAL witnessed 3 of its hotel assets
coming on line. Delhi airport has also undertaken works to beautify the
Aerocity area and the work is expected to be completed in 2016.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC, a JV between GMR group (40%) and Megawide Corporation (60%), in
April 2014, entered into a concession agreement with Mactan Cebu
international Airport Authority for development and operation of Mactan
Cebu International Airport (Cebu airport) for a period of 25 years.
GMCAC took operational responsibility of the airport in November 2014
and has now been operating the airport for 20 months.

Highlights Of FY 2015-16:

GMCAC has laid great emphasis on boosting traffic at Cebu airport, both
domestic and international.

In a bid to boost international tourism, GMCAC has been working with
the tourism body of Cebu and Philippines, as well as with travel agents
to boost tourist traffic from China, Japan and Australia. As a result,
GMCAC has seen international traffic grow by 18.5% while the domestic
traffic has also grown at 9.6%. In terms of international connectivity,
GMCAC has also seen 3 new routes being added, viz., Cebu - Dubai, Cebu
- Los Angeles and Cebu- Taipei.

On the operational front, GMCAC has brought about a significant
transformation in the existing terminal facilities by:

a) Introduction of common security checks for passengers boarding
Domestic and International flights. This resulted in doubling of the
capacity of security x-ray lanes.

b) Installed New Flight Information Display Systems.

c) Introduced new check-in systems and increased the number of check-
in counters.

d) Developed a new meeters'''' and greeters'''' area.

e) Introduced enhanced FSB and retail operations including launch of a
completely overhauled Duty Free area.

GMCAC is also steadily working towards development of the new terminal.
To mitigate the delay in handover of land which was under occupation of
Philippines air force, GMCAC has started work on the land parcels made
available to it in June 2015. The structural works for the new terminal
building are underway and we are confident of completing the terminal
within the timelines specified in the concession agreement.

Awards and Accolades received in FY 2015-16:

Asia-Pacific Transport Deal of the Year.

Best Project Finance deal award by Triple A Asia Infrastructure awards.

GMR Male International Airport Private Limited (GMIAL)

GMR Group along with its partner Malaysia Airports are engaged in
arbitration with Government of Maldives (GoM) and Maldives Airport
Company Ltd. (MACL) after the latter repudiated the agreement in
December 2012. In order to expedite the progress of the arbitration,
both GMR Group and GoM have agreed to bifurcate the arbitration in 2
phases; first phase was to focus on questions of liability; while the
second phase was to quantify the amount recoverable. In June 2014, the
tribunal had ruled that the concession agreement was valid and binding
and GoM had illegally terminated the concession agreement and is
therefore liable to GMR/GMIAL for compensation. After subsequent
hearings, the tribunal has ruled in February 2016 that the debt owed by
GMIAL to Axis Bank will form part of the compensation payable by GoM to
GMIAL. The hearing to determine the quantum of damages payable by
Government of Maldives to GMIAL is scheduled in the month of August

GMR Aviation Private Limited (GAPL)

GAPL operates and owns one of the youngest fleets in the country and
addresses the growing need for charter services. The operations are
managed by professionals with robust processes and systems to ensure
highest levels of efficiency and safety. In order to boost revenues and
rationalize overhead costs, GAPL has entered into a 2 year management
contract with Jet Set Go - a general aviation fleet aggregator. As per
the agreement, Jet Set Go will take responsibility for operations and
marketing of the aircrafts.

Energy Sector

The Energy Sector companies are operating around 4,600 MWsof Coal, Gas,
Liquid fuel and Renewable power plants in India and around 2,200 MWs of
power projects are under various stages of construction and
development, besides a pipeline of other projects. The Energy Sector
has a diversified portfolio of thermal and hydro projects with a mix of
merchant and long term Power Purchase Agreements (PPA).

Following are the major highlights of the Energy Sector:

A. Operational Assets:

I. Generation:

1. GMR Warora Energy Limited (Formerly EMCO Energy Limited) (GWEL) -
600 MW:

The Plant consists of 2 x 300 MW coal fired Units with all associated
auxiliaries and Balance of Plant Systems.

GWEL has a Coal supply Agreement with South Eastern Coalfields Limited
(SECL) for a total Annual Contracted Quantity (ACQ) of 2.6 Million
Tonnes per annum.

Tamil Nadu Generation and Distribution Corporation Limited (TAGENDCO)
PPA was fully operationalized during the year, which was earlier
pending due to non availability of transmission corridor and long-term
open access.

During the year, the Plant has achieved availability of 94.80% and
Gross Plant Load Factor (PLF) of 75.95%.

More than 90% ash utilization was achieved during the year.

Weir construction for water availability by Maharashtra industrial
Development Corporation (MIDC) is under way and expected to be made
ready in FY 2016-17.

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

GKEL in which GMR Energy Limited has 86% stake, with IF S IDFC holding
the balance stake, has developed 1,050 MW (3x 350) coal fired power
plant at Kamalanga Village, Odisha.

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

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

GKEL has received Letter of Assurances from Mahanadi Coalfields Limited
(MCL) for 1,050 MW, of which 500 MW is for firm linkage and 550 MW is
for tapering linkage.GKEL has signed Fuel Supply Agreement (FSA) for
firm linkage for 500 MW and tapering linkage for 200 MW with MCL and is
getting coal supply accordingly. GKEL has also signed FSA with Eastern
Coalfields Limited (ECL) for 350 MW tapering linkage and coal supply
corresponding to tapering linkage for 204 MW had started earlier.

During this year, Ministry of Coal has allowed continuation / extension
of MoU coal (earlier tapering linkage) to GKEL beyond March 2016 till
June 2016. Further, from December 2015 onwards, supplies from ECL have
been transferred to MCL leadingto a cost savings ofRs. SOCrore per

During this period, GKEL achieved availability of 91.5% and PLF of

GKEL received favourable order from CERC on GRIDCO tariff, on the basis
of which GKEL has raised supplementary bills of Rs. 233.82 Crore to
GRIDCO for the period upto November 2015 and has also raised regular
bills aggregating to Rs. 204.33 Crore for the period from December 2015
to March 2016.

GKEL received favourable order from CERC on Change in Law petition
against Haryana Discoms, with claim of Rs. 115.94 Crore of arrears from
FY 2014 to FY 2016 period.

GKEL successfully completed refinancing of the project debt under
Flexible Structuring Scheme along with the new facility of Rs. 400
Crore against the regulatory receivables. Working capital limit was
also enhanced with sanction ofRs. 745 Crore.

3. GMR Chhattisgarh Energy Limited (GCHEPL) - 1,370 MW:

GCHEPL, a wholly owned subsidiary of GEL, has developed 1,370 MW (2 x
685 MW) pulverized coal- fired super critical technology based power
project in Raikheda Village, Tilda Block, Raipur District, in the State
of Chhattisgarh. GCHEPL has received all the necessary statutory and
environmental clearances. The project has achieved COD of Unit -1 and
Unit - 2 on June 01, 2015 and March 31, 2016 respectively and started
commercial operation of Unit -1 from November 01,2015. The project
participated in the coal block auction last year, bid and won two coal
blocks, namely Talabira and Ganeshpur.

The Railway track for movement of rake to site has been completed and
siding operations have commenced. Ganeshpur coal block (located in
Latehar District, Jharkhand and earlier allotted to Tata Steel Limited
and Adhunik Thermal Energy) has a reserve of about 92 MT and is
expected to start its production by FY 18 and reach its peak production
capacity by FY 21.

Talabira coal block (located in Odisha and earlier allotted to
HINDALCO) has a reserve of about 8.5 MT. This is an operating coal
block and GCHEPL started production from August 2015 onwards and GCHEPL
has been receiving coal for its operations.

GCHEPL is actively pursuing to tie-up the entire capacity through
various upcoming medium and long-term power procurement tenders.

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

GVPGL, a wholly owned subsidiary of GEL operates a 370 MW natural
gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh.
During the FY 2016, the plant commenced operations on roster basis
beginning August 2015, under e-bid RLNG scheme. In line with the
scheme, the plant secured gas corresponding to 30% PLF for period June
2015 to September 2015,50% PLF for the period October 2015 to March
2016 and 30% PLF for the period April 2016 to September 2016. GVPGL
operated at an average PLF of 17.88% during the year.

To benefit from the softened LNG prices world-wide, GVPGL is striving
continuously to import LNG on short term basis to obtain higher PLF.

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

GREL, a wholly owned subsidiary of GEL is engaged in setting up of 768
MW (2 x 384 MW) combined cycle gas based power project.

GREL achieved COD on October 22,2015 and secured gas for operations
through e-bid RLNG scheme at 50% PLF for the period October 2015 to
March 2016 and 30% PLF for the period April 2016 to September 2016. The
plant began commercial operations for the first time starting November
16, 2015 based on the roster decided by AP- Transco. GREL operated at
an average PLF of 20.12% during the year.

To benefit with the softened LNG prices world-wide, GREL is striving
continuously to import LNG on short term basis and looking forward to
tie up power by entering into the PPA opportunities available.

Further, the lenders have invoked Strategic Debt Restructuring (SDR)
for GREL resulting in conversion of outstanding debt amounting to Rs.
1,413.99 Crore (Rs. 1,308.57 Crore of debt and Rs. 105.42 Crore of
Interest accrued thereon) into equity in order to acquire 55%
shareholding in GREL. Post the restructuring, the total outstanding
debt of GREL would be Rs. 2,366 Crore.

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

GEL operates 220 MW combined cycle barge mounted power plant at
Kakinada, Andhra Pradesh. There was no generation of power by the barge
mounted power plant during the year ended March 31,2016 on account of
non- availability of gas.

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

Efforts are being made to arrange gas from domestic sources and LNG

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

GPCL, in which GEL holds 51% stake, operates a 200 MW diesel powered
power plant and was selling power to Tamil Nadu Generation and
Distribution Corporation Limited (TAGENDCO). There was no generation of
power during the year and currently the plant is kept under

TAGENDCO had extended the PPA from February 15, 2014 to February
14,2015 with fresh tariff and new terms and conditions. GPCL requested
TAGENDCO for extension of PPA from February 15, 2015 and is awaiting
clearance for supplying power.

8. GMR Gujarat Solar Power Private Limited (GGSPPL), Charanka Village,

GGSPPL, a wholly owned subsidiary of GEL, operates 25 MW Solar power
project at Charanka village, Patan district, Gujarat. GGSPPL has
entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for
supply of entire power generation. GGSPPL has achieved commercial
operation on March 04, 2012 and received certificate of commissioning
from M/s. Gujarat Energy Development Agency ("GEDA"). Indu Projects
Limited has been awarded the contract for operation and maintenance of
the plant for a period of 5 years. Plant has achieved a Gross DC PLF of
19.36% for FY 2015-16 and recorded revenue of Rs. 63.18 Crore for the
FY. Significantly during the year, GGSPPL also received the following
ISO Certifications from DNV GL of Norway (1) ISO 9001:2008 (Quality
Management System), ISO 14001:2004 (Environmental Management System)
and OHSAS 18001:2007 (Occupational Health and Safety Management

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

GRSPPL, a wholly owned subsidiary of GEL commissioned a 1 MW Solar
power project in Rajam, Andhra Pradesh in February 2016. The Company
has signed a 25 year PPA with both GMR Institute of Technology (700KW)
and GMR Varalakshmi Care Hospital (300KW) for the sale of power

II Transmission:

1. Aravali Transmission Service Company Limited (ATSCL):

ATSCL, a wholly owned subsidiary of GEL, successfully implemented the
project with 96 km line including 400 kV S/C Hindaun-Alwar transmission
line and 2 * 315 MVA 400/220 kV Grid Substation at Alwar and other
associated works in the State of Rajasthan with a total project cost of
Rs. 146.20 Crore. This is the second public private partnership (PPP)
project of its kind in Rajasthan, which is being executed on Build Own
Operate Maintain (BOOM) basis for a concession period of 25 years from
the date of Project Award.

The 400 kV Hindaun-Alwar transmission line was successfully charged on
July 25, 2014. Grid Substation was charged on July 31,2014.

COD was achieved on July 17, 2014 in line with the provisions of
Transmission Service Agreement (TSA).

Rajasthan Electricity Regulatory Commission (RERC) gave an unfavorable
order in case of the Tariff Revision Petition filed before RERC seeking
compensation in terms of either TSA period extension (to compensate
ATSCL on account of delayed grant of transmission license, escalation
in project cost due to change in law and COD consideration) or upfront
loss compensation.

Company has approached Appellate Tribunal for Electricity (APTEL)
seeking relief against the order of RERC.

The asset has performed at more than the target availability of 98%.

2. Maru Transmission Service Company Limited (MTSCL):

MTSCL, a wholly owned subsidiary of GEL, successfully implemented the
project with 269 km line including 400 kV S/C Bikaner-Deedwana
Transmission Line, 400 kV S/C Ajmer-Deedwana Transmission Line, 220 kV
D/C Sujangarh-Deedwana Transmission Line and 2x315 MVA 400/220 kV Grid
sub-station at Deedwana and other associated works in the State of
Rajasthan with a total project cost of Rs. 251.90 Crore. This is the
first PPP project of its kind in Rajasthan, which is being executed on
BOOM basis for a concession period of 25 years from the date of Project

COD was declared by Order of the RERC from December 16, 2013.

Arrears have been received from Discoms as per the relief granted by
RERC to pay all unpaid revenue from December 16, 2013.

RERC gave an unfavorable order in case of the Tariff Revision Petition
filed before RERC seeking compensation in terms of either TSA period
extension (to compensate MTSCL on account of delayed grant of
transmission license, escalation in project cost due to change in law)
or upfront loss compensation.

Company has approached APTEL seeking relief against the order of RERC.

The asset has performed at more than the target availability of 98%.

Stake sale in the Transmission projects:

GEL has entered into definitive agreements with Adani Transmission
Limited agreeing to transfer its interest in aforesaid ATSCL and MTSCL.
The transaction shall be concluded subject to fulfillment of necessary
conditions precedent.

B. Projects:

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

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

GBHHPL achieved financial closure on April 25, 2013 and tied-up the
debt requirement of Rs. 1,380 Crore and the necessary loan agreements
were executed. All clearances required for undertaking construction are
in place and complete land as required for the project is in GBHHPL''''s

All the contracts for execution of civil works and Electro Mechanical
works were awarded and civil works are going on with the completion of
infrastructure works.

GBHHPL had also executed the Connectivity Agreement with HP Power
Transmission Corporation Limited and Long Term Access Agreement with
Power Grid Corporation of India Limited (PGCIL) for evacuating power
outside Himachal Pradesh.

The construction works of the project are in full swing and River
Diversion work is completed on schedule on October 01, 2015. Overall
progress of 32% has been achieved till end of FY 2015-16.

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

GUKPL, a subsidiary of GEL, is developing 900 MW Upper Karnali
Hydroelectric project (HEP) located on river Karnali in Dailekh,
Surkhet and Achham Districts of Nepal. During the year under review,
post execution of Project Development Agreement (PDA), several key
activities as per PDA compliance, Technical appraisal of the Project,
Design and tendering works have been completed, despite a series of
Force Majeure events like Earthquake, political upheaval etc. The
Project land has been identified, joint verification for Government and
Forest land has been completed and same is under review by concerned
Ministry before seeking cabinet approval. Rehabilitation Action Plan
(RAP), as per International Finance Corporation (IFC) Performance
Standards and the Safeguard Policies has been prepared and private land
acquisition process is currently underway. Similarly Environment and
Social Impact Assessment (ESIA) studies as per IFC Performance
Standards have also been prepared and are under finalisation with the
lenders. The detailed technical appraisal by a seven member Panel of
Experts (empanelled with IFC) has been completed and the Panel
submitted its final report. The Hydraulic model studies as per the
Panel''''s advice has also been completed and the technical design of the
Project has been finalised. Tender engineering has been completed and
the formal tender process is being launched shortly.

For the Transmission Line, detailed survey has been completed and
cadastral mapping is in advanced stage of completion. Post execution of
the PTA between Government of India (Gol) and Government of Nepal (GoN)
and the SAARC energy pact between SAARC nations, Gol is in advanced
stage of finalisation of across border policy. Gol and GoN have also
agreed to build the cross border

Transmission line (From Lamki in Nepal to Bareilly in UP) on bilateral
route, matching with the commissioning schedule of the Upper Karnali
HEP. Regarding power sale, a MoU has been executed with M/s NTPC Vidyut
Vyapar Nigam Limited (NVVN) for tie-up of the entire saleable capacity
of the Project in India and Bangladesh. NVVN is also nominated by Gol
as the Nodal agency for sale of Power between India, Nepal, Bangladesh
and Bhutan. Post this MoU, discussions are underway with select buyers
in India and Bangladesh for tie-up of power on long term route. Joint
Development Agreement (JDA) was executed with IFC for both Generation
and Transmission projects on December 22, 2014 and as per the JDA, IFC
proposes to invest as Co-developer for the Projects with 10% equity
under ''''Infra Ventures'''' route and also assume the role of lead lender
and debt arranger. The Project has received Lois in excess of USD 1.1
billion from Multilateral Development Banks (MDBs) across the globe and
post this, the first all lenders site visit / lenders meeting was held
at Kathmandu on April 05, 2016. The lenders are presently engaged in
Project appraisal activities.

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

GBHPL, a subsidiary of GEL, is in the process of developing 300 MW
hydroelectric power plant on Alaknanda river in the Chamoli District of
Uttarakhand State. The project has received all major statutory
clearances like Environmental and Techno economic concurrence from
Central Electricity Authority (CEA). The project got registered in The
United Nations Framework Convention on Climate Change (UNFCCC)and it is
eligible for receiving the Clean Development Mechanism (CDM) benefits.

Implementation Agreement has been executed with the Government of
Uttarakhand on May 17, 2013. Financial Closure (FC) process is in the
advanced stage. Project has received term loan sanction from Power
Finance Corporation Limited. However, FC process has been held-up due
to Hon''''ble Supreme Court''''s stay order on 24 Hydro Electric Projects in
Uttarakhand (Order dated May 07, 2014) issued while hearing a civil
appeal in the matters of Alaknanda Hydro Power Company Limited and the
stay order is in effect till date.

4. Himtal Hydropower Company Private Limited (HHPPL) - (600 MW):

HHPPL, a subsidiary of GEL, is developing 600 MW Upper Marsyangdi-2
Hydroelectric Power Project on the river Marsyangdi in Lamjung and
Manang Districts of Nepal. During the year under review, significant
progress was made in negotiations / finalisation of the PDA with
Investment Board Nepal (IBN) and the same is in advanced stage. The
land for the entire project has been identified and verified. The final
verified land case has been submitted to GoN. MoU for sale of power
with Government of Bangladesh has been finalised and is awaiting the
execution pending the notification of the cross border policy, which is
currently under formulation by Gol.

For the Transmission Line, Detailed Route Survey and Cadastral Map
Survey is in advanced stage of completion. JDA was executed with IFC
for transmission line project on December 22, 2014 and JDA with IFC is
already in place for Himtal (the Generation Company). IFC proposes to
invest in the Project as Co-developer with 10% equity under ''''Infra
Ventures'''' route and also act as lead lender and lead arranger for the
Project. Post PTA/SAARC Energy pact execution, Gol and GoN have also
recently agreed to build the cross border Transmission line on
bilateral route, matching with the commissioning schedule of the Upper
Marsyangdi-2 Hydro Electric Project.

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

GMR Energy Limited owns the 100% stake of GLHPPL which is developing a
225 MW project in East Kameng district in Arunachal Pradesh. The
Detailed Project Report ("DPR") has been prepared and has received
techno-economic concurrence from the CEA. The Expert Appraisal
Committee (EAC) of Ministry of Environment, Forest and Climate Change
(MoEF S CC or MoEF) has recommended for Environmental Clearance and
accordingly MoEF S CC had issued in-principle clearance to this
project. However, formal Environmental Clearance shall be granted by
MoEF S CC after obtaining the Forest- stage-l clearance. Defence
clearance for setting up the project has been received from Ministry of
Defence, Gol.

C. Mining Assets:

1. PT Barasentosa Lestari (PTBSL):

GEL had acquired 100% stake in PTBSL in September 2008 which has coal
mine in South Sumatra Province with more than 650 MT Coal Resources in
-24,385 Hectares and total mineable reserves of about 280 Million
Metric Ton (MMT). Trial coal production and sales have commenced in FY
2015, however the operations were suspended because of the limitations
of transportation of coal due to lower water levels in Musi River. The
coal production is expected to be gradually ramped up from 1 Million
Ton Per Annum (MTPA) to 3 MTPA over a period. The coal is planned to be
exported to India to cater to captive demand of power plants owned by
the Group and also to trade the coal through in-house coal trading arm.

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

GEL through its overseas subsidiary, GMR Coal Resources Pte. Ltd., had
acquired 30% stake in PT GEMS, a group company of Sinarmas Group,
Indonesia. PT GEMS, a limited liability company, listed on the
Indonesia Stock Exchange. PT GEMS is carrying out mining operations in
Indonesia through its subsidiaries which own coal mining concessions in
South Kalimantan, Central Kalimantan and Sumatra. PT GEMS is also
involved in coal trading through its subsidiaries. Coal mines owned by
PT GEMS and its subsidiaries have total resources of more than 2.0
billion tons and Joint Ore Reserves Committee (JORC) certified reserves
of more than 620 MT of thermal coal. GMR Group has a Coal off take
Agreement with PT GEMS which entitles GMR to offtake coal for 25 years.

Transportation Highways

GMR Highways Limited, a wholly owned subsidiary of your Company, is one
of the leading highways developer in India with 9 operating highways
assets (including two projects in which it holds minority interest).
During the FY 2016, we have entered into definitive agreements to
divest our balance 26% stake in Ulunderpet Expressways Private Limited
and our entire stake in GMR OSE Hungund Hospet Highways Private
Limited. The FY 2015-16 has seen a subdued growth in the highways
sector due to various factors such as slowed economic situation,
funding constraints, land acquisition issues etc. This has resulted in
lower investment from private players in infrastructure in general
including roads and highways sector. For Kishangarh-Udaipur- Ahmedabad
project which had been terminated in December 2012, a dispute notice to
NHAI was served, invoking arbitration to settle the dispute. The
Arbitration Tribunal has been constituted and the matter will be taken
up in hearings scheduled during FY 2016-17.

Urban Infrastructure

The Group is developing a 2,100 acre multi product Special Investment
Region (SIR) at Krishnagiri, near Hosur in Tamil Nadu and 10,000 acre
Port- based multi-product SIR at Kakinada, Andhra Pradesh.

Krishnagiri SIR

GMR Group, with an objective of building world class industrial
infrastructure in India, is setting up a SIR at Hosur, Tamil Nadu just
45 km from Electronic City, Bengaluru. The location provides unique
advantage of multi-modal connectivity with National and State Highways
and a railway line running alongside. Krishnagiri SIR is planned to be
developed as an integrated city spread across 2,100 acres in the
influence area of proposed Chennai- Bangalore Industrial Corridor.
Krishnagiri SIR is being planned to house the following manufacturing

Automotive S Ancillary; Defense and Aerospace; Precision Engineering;
Machine tools; Electronics Product Manufacturing.

Designed to encompass a complete ecosystem, Phase 1A of Krishnagiri SIR
spread over 275 acres will contain all that are essential for a large
industrial city center. Krishnagiri SIR has following key offerings to
its esteemed clientele:

Shovel ready developed plot with road, drainage, water supply, Water
Treatment Plants (WTP), Sewage Treatment Plants (STP) and other similar

Water - Potable water;

Power -33 kV level dedicated sub-station with a Solar power plant.

The entire infrastructure is being developed and maintained by GMR
Group underscoring its commitment to quality, service and timelines.
The "integrated" design would endeavor to provide first world standard
residential, social and commercial amenities making this zone a truly
"self- contained".


GMR Group owns 51% in Kakinada SEZ Private Limited, which is developing
Kakinada SEZ/ SIR in the State of Andhra Pradesh in proximity to the
cities of Vishakapatnam and Kakinada. With an area span of over 10,000
acres, Kakinada SEZ / SIR will be self-contained Port-based Industrial
park with ideally designed core infrastructure, industrial common
infrastructure, business facilitation infrastructure and social
infrastructure across varied dedicated areas such as housing, lifestyle
and high-end expat friendly zone. Kakinada SEZ / SIR is designed for
balancing the sensitivity to culture and heritage of the region and
also for integration with the native eco-system.

Project Progress:

Pals Plush, a leading toy manufacturing company has already started its
operations in an area of over 1,00,000 sq. ft. of space and has already
recruited over 600 people. It has plans to recruit over 1200 people by
FY 17.

TATA Business Support Services has established a rural BPO and has
already recruited over 30 people and training for the next batch of
people is underway. Anticipated to recruit over 100 people in the near

Received interests from various domestic and international companies to
establish their factories in Kakinada SEZ / SIR and are in various
phases of advanced discussions.

Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC)
has executed and registered an Agreement for sale with the company for
1563.22 acres of land at Kona Village, Thondangi Mandal for the purpose
of Company''''s Port / Industrial Backup area / Industrial Park.

Secured approvals to draw water up to 11 MGD from various sources for
Industrial use.

Laid down the power cables inside the industrial zone and provided
industrial power supply for existing industries.

Master Plan for Phase 1 development of around 916 acres has been

Internal black top roads and plots have been developed.


Pursuant to the strategic decision taken to pursue EPC opportunities
outside GMR Group and consequent to the Group''''s entry into Railway
Projects during FY 2015-16, the Group has started construction of 2

Freight Corridor Corporation (DFCC) projects in the state of Uttar
Pradesh. Mobilization and design for the projects is substantially
completed and construction is in full swing.

Your Company has also achieved substantial completion of 2 Rail Vikas
Nigam Limited (RVNL) projects in the States of Andhra Pradesh and Uttar
Pradesh that were awarded in FY 2013-14.

Raxa Security Services Limited (Raxa)

Raxa became a subsidiary of the Company during FY 2015-16 consequent to
the Group acquiring 100% stake in Raxa. Raxa is engaged in the business
of providing security manpower and technology services to industrial
and business establishments.

Consolidated Financial Statement

In accordance with the Companies Act, 2013 and Accounting Standard (AS)
- 21 on Consolidated Financial Statement read with AS - 23 on
Accounting for investments in Associates and AS - 27 on Financial
Reporting of Interests in Joint Ventures, the audited consolidated
financial statement is provided in the Annual Report.

Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2016, the Company had 123 subsidiary companies apart
from 26 joint ventures and 4 associate companies. During the year under
review, companies listed below have become or ceased to be Company''''s
subsidiaries or associate companies. The Policy for determining
material subsidiaries as approved may be accessed on the Company''''s
website at the link:
http://investor.gmrgroup.in/investors/GIL-Policies.html. The complete
list of subsidiary companies, joint ventures and associate companies as
on March 31, 2016 is provided in "Annexure A" to this Report.

Raxa Security Services Limited (Raxa) and Indo Tausch Trading DMCC
(ITTD) became subsidiaries during the FY 2015-16.

Homeland Energy Group Limited (HEGL) ceased to be subsidiary during the
FY 2015-16. GMR Male Retail Private Limited (GMRPL) and GMR Airports
(Malta) Limited (GMRAML) were liquidated during the FY 2015-16 and
accordingly ceased to be subsidiaries.

GMR OSE Hungund Hospet Highways Private Limited (GOSEHHHPL), ceased to
be a subsidiary company and became an associate company during the FY

Report on the highlights of performance of subsidiaries, associates and
joint ventures and their contribution to the overall performance of the
Company has been provided in Form AOC-1.

Directors'''' Responsibility Statement

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

a) that in the preparation of the annual financial statements for the
year ended March 31, 2016, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;

b) that such accounting policies as mentioned in Note 2.1 of the Notes
to the Financial Statements have been selected and applied consistently
and judgment and estimates have been made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31,2016 and of the loss of the Company for the
year ended on that date;

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

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

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

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

Corporate Governance

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

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

Business Responsibility Report

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

Contracts and arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company
during the FY 2016 with related parties were in the ordinary course of
business and on arm''''s length basis. During the year, the Company had
not entered into any contract / arrangement / transaction with related
parties which could be considered material in accordance with the
policy of the Company on materiality of related party transactions
other than the transaction mentioned below:

Loans extended by the Company to GEL to an extent of Rs. 1,288.26 Crore
during the FY ended March 31,2016.

The Policy on related party transactions as approved by the Board may
be accessed on the Company''''s website at the link:
http://investor.gmrgroup.in/ investors/GIL-Policies.html. Your
Directors draw attention of the members to Note 32 to the standalone
financial statements which sets out related party disclosures.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has
formulated and recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, which was approved by the Board. The CSR
Policy may be accessed on the Company''''s website at the link:
http://investor.gmrgroup.in/ investors/GIL-Policies.html.

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


Health, Hygiene S Sanitation

Empowerment S Livelihoods

The Company, as per the approved policy, may undertake other need based
initiatives in compliance with Schedule VII to the Companies Act, 2013.
During the year, the Company was not required to spend any amount on
CSR as it did not have any profits. Accordingly, it has not spent any
amount on CSR activities. The Annual Report on CSR activities is
annexed as "Annexure B" to this Report.

The activities undertaken by GMR Varalakshmi Foundation (GMRVF),
Corporate Social Responsibility arm of the GMR Group, have been
highlighted in detail in the Management Discussion and Analysis Report.

Risk Management

With business opportunities significantly increasing in the current
business environment, new risks that can impact your Company''''s
businesses, are emerging. For these risks to be managed effectively, it
is imperative to identify and address these risks in order to
accomplish Company''''s objectives.

Your Company''''s Enterprise Risk Management (ERM) framework follows the
current best practices and has been deployed to address the emerging
challenges effectively.

Significant developments during the year under review are as follows:

Risk assessment was carried out in detail at bid stage for the Railway
EPC projects, Philippines airports projects. Independent views on key
business assumptions made for these bids were presented during board
reviews, enabling informed decision-making;

The focus on decentralization of Risk Management function has continued
throughout this year. This decentralization has been effectively
translated into functioning ERM teams in the sectors, coupled with
support from outsourced partners;

Having successfully pilot-implemented the Project Risk Management (PRM)
framework in the previous year, the same has been replicated in the
ongoing Railway EPC projects. The deployment of PRM framework has
enabled effective control over project costs;

The Group has felt the need for a measurable approach to decide the
amount of risks it can take in achieving its business objectives in the
changed business environment over the past year. A draft Risk Appetite
Framework for the Group is under development and review with an
objective to establish thresholds for quantum of risks that the Group
can accept;

The Physical Risk Benchmarking framework developed earlier, is under
implementation at Energy assets.

Updates on ERM activities are shared on a regular basis with Management
Assurance Group (MAG). The ERM Team also presents to the Management and
the Audit Committee of the Board, the risk assessment and minimization
procedures adopted to assess the reliability of the risk management
structure and efficiency of the process.

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

Risk Management Policy

The Company has in place the Risk Management Policy duly approved by
the Board of Directors.

ERM Philosophy

The GMR Group''''s ERM philosophy is "To integrate the process for
managing risk across GMR Group and throughout its businesses and
lifecycle to enable protection and enhancement of stakeholder value."

ERM aims at balancing the dynamic growth strategy of the Group with
robust institution building processes by ensuring that key decisions
with regard to strategy and institution building are commensurate with
the Group''''s risk appetite.

The Group endorses the following principles as adapted from ISO
31000:2009 (Risk Management - Principles and Guidelines):

ERM Protects and enhances value

ERM is an integral part of all organizational processes and is
applicable across the Group

ERM is an input to decision making

ERM is systematic, structured and timely

ERM is transparent, inclusive and consultative

ERM is dynamic, iterative and responsive to changes

ERM facilitates continual improvement

Internal Financial Controls

The Company has in place adequate internal financial controls with
reference to financial statements. These controls were tested and no
reportable material weaknesses were observed in the operations of the

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the
Articles of Association of the Company, Mr. G. B. S. Raju, Director of
the Company, retires by rotation at the ensuing Annual General Meeting
of the Company and is eligible for re-appointment. Mr. G. B. S. Raju
has offered himself for re-appointment.

Based on the recommendation of the Nomination and Remuneration
Committee, the Board of Directors of the Company at its Meeting held on
November 13, 2015 appointed Mr. Jayesh Desai as an Additional Director
of the Company with effect from November 13, 2015 to hold office upto
the date of ensuing Annual General Meeting of the Company. The Company
has also received notice in writing pursuant to Section 160 of the
Companies Act, 2013 from a member along with requisite deposit
proposing his candidature as Director of the Company at the ensuing
Annual General Meeting.

Further, the Nomination and Remuneration Committee of the Board of
Directors has also recommended the re-appointment of Mrs. Vissa Siva
Kameswari, Mr. R.S.S.L.N. Bhaskarudu, Mr. N. C. Sarabeswaran, Mr. S.
Sandilya, Mr. S. Rajagopal, and Mr. C. R. Muralidharan as Independent
Directors of the Company for their second term for a period of five
years or upto the conclusion of Twenty Fifth Annual General Meeting
whichever is earlier. Subsequently, Board at its meeting held on August
06, 2016 has recommended the said re-appointment.

Dr. Prakash G. Apte and Mr. V. Santhanaraman have not opted for
re-appointment as Independent Director for their second term.

The Company has received notice in writing under the provisions of
Section 160 of the Companies Act, 2013, from member, along with the
requisite deposit proposing the candidature of each of the said
directors for the office of Independent Directors, who opted for
re-appointment, to be re-appointed as such under the provisions of
Section 149 of the Companies Act, 2013.

The brief resume and details of Directors who are to be appointed / re-
appointed are furnished in the Notice to the Annual General Meeting.

The Company has received declarations from all the Independent
Directors, who opted for re-appointment, confirming that they meet the
criteria of independence as prescribed both under Section 149(6) of the
Companies Act, 2013 and Regulation 16 of SEBI LODR.

During the year under review, Mr. Adi Seshavataram Cherukupalli was
appointed as Company Secretary of the Company with effect from August
13, 2015 in place of Mr. C.P. Sounderarajan.

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

The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual directors on the basis of the criteria
such as the contribution of the individual director to the Board and
committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in meetings, etc.
In addition, the Chairman was also evaluated on the key aspects of his
role. The Company''''s Nomination and Remuneration Policy for Directors,
Key Managerial Personnel and Senior Management is annexed as "Annexure
C" to the Board''''s Report.

Auditors and Auditors'''' Report

Statutory Auditors

M/s. S. R. Batliboi S Associates LLP, Chartered Accountants, Statutory
Auditors of the Company, hold office till the conclusion of the ensuing
Annual General Meeting and are eligible for re-appointment. They have
confirmed their eligibility to the effect that their re-appointment, if
made, would be within the prescribed limits under the Companies Act,
2013 and that they are not disqualified for re-appointment.

Management''''s response on the Statutory Auditors'''' Qualification /
Comments on the Company''''s standalone financial statements

1. Qualification pertaining to the dispute in GMIAL - On termination
of the contract and on conservative basis, the Group wrote off assets
worth Rs. 202.61 Crore during FY 2012-13, retaining only carry value of
assets equivalent to Project Loan from Axis bank, taking into account
the Direct Agreement entered in to by GoM / MACL with Axis bank.
Tribunal''''s award dated June 18, 2014, declared that the Concession
Agreement was not void ab initio, was valid and binding on the parties
and also declared that the GoM and MACL are jointly and severally
liable to GMIAL for loss caused by repudiation of the contract. Further
on June 17, 2015, the tribunal in its decision in respect of the
preliminary issue, stated that the limit of damages recoverable in the
aforementioned award was intended to apply from the date of concession
agreement has been repudiated and also the limit to recoverable damages
identified in the aforementioned award means all damages recoverable by
GMIAL and not only contractually contemplated damages. In its further
order vide third part final award dated February 23, 2016, the Tribunal
declared that the sums payable by GMIAL to Axis Bank are included in
the sums which would have been payable by GoM / MACL to GMIAL. Based on
the above favourable orders, the Management is confident that it is
entitled for a compensation higher than the value of assets carried in
the financial statements and the claims, if any, from GADLIL and other
service providers for termination of their contracts. Accordingly, no
further adjustments to financial statements is considered necessary.

2. Qualification pertaining to the investments in GKUAEL - The Company
has already made a provision for diminution in the value of investments
amounting to Rs. 137.47 Crore representing the entire expenses incurred
on this project till date. Further, the project was delayed and
subsequently terminated on account of delay by NHAI in fulfilling
mandatory conditions precedent. Accordingly, Management is confident
that amicable solution will be arrived at for the dispute with NHAI as
well as on account of claims from sub-contractors. As it was not
feasible on the date of adoption of financial statements to assess
final outcome from these disputes and likely impact of the same on the
financial statements, no further provision is made. These settlements
will be taken into account and appropriate adjustments would be made in
financial statements as and when assessment becomes feasible on
settlement of disputes.

3. Qualification in the report on internal financial controls
regarding assessment of carrying value of investments in GMIAL and
GKUAEL - The Group has a robust system in place to assess the
appropriateness of the carrying value of its investments, including
testing for impairments. Management''''s view on the instant cases are
explained in the paras 1 and 2 above.

Management''''s response on the Statutory Auditors'''' Qualification /
Comments on the Company''''s consolidated financial statements

4. Qualification pertaining to the capitalization of indirect
expenditure and borrowing costs in GREL - GREL has approached the
Ministry of Corporate Affairs (MCA) seeking clarification / relaxation
on applicability of MCA general circular 35/2014 dated August 27, 2014.
In view of the same, no adjustment has been made to this effect in the
financial statements.

5. Qualification pertaining to capitalization of Unit 1 on the date of
declaration of commercial operation and also one of its mines in GCHEPL
- Management is of view that the coal mine is integral part of power
plant and Unit-1 is related to that coal mine. The said coal mine had
started operation from the extraction from August 01, 2015, but coal
extracted was not sufficient to run Unit 1. Post ramp-up of coal
production, GCHEPL has started commercial operation from Unit-1 on
November 01, 2015 and has declared COD of Unit 1 along with Mines with
effect from October 31, 2015.

6. Qualifications pertaining to GMIAL and GKUAEL - Management
responses are provided in paras 1 and 2 respectively.

7. Qualification in the report on internal financial controls
regarding compliance with the applicable accounting standards in case
of GREL and GCHEPL - The Group has proper systems and review mechanisms
in place to ensure compliance with the accounting standards.
Management''''s view on the instant cases are explained in the paras 4 and
5 above.


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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