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
March
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
administrative
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
subsidiaries/jointly
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
operations.
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.
Reserves
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
Report.
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
subsidiary.
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
continued.
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
2015.
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
row.
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
2016.
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
year.
During this period, GKEL achieved availability of 91.5% and PLF of
67.6%.
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)
procedures.
Efforts are being made to arrange gas from domestic sources and LNG
market.
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
preservation.
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,
Gujarat:
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
System).
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
generated.
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
Award.
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
possession.
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
clusters:
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
facilities;
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".
KakinadaSEZ/SIR
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
future.
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
completed.
Internal black top roads and plots have been developed.
EPC
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
Dedicated
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
2015-16.
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:
Education
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
Company.
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.
8.
Dear Members,
The Board of Directors present the 19th Annual Report together with the
audited financial statements of the Company for the financial year
ended March 31, 2015.
Financial Results and State of the Company''s Affairs:
Your Company, as a holding company, operates in four different business
sectors - Airports, Energy, Transportation and Urban Infrastructure
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 for implementing the projects undertaken by the
subsidiaries and others.
The Company''s consolidated revenue, expenditure and results of
operations are presented through consolidated financial statements and
the details are given below:
( Rs. In Crore)
Particulars March 31, March 31,
2015 2014
Revenue from operations 11,087.68 10,653.22
Revenue share paid / payable to
concessionaire grantors (2,064.86) (1,943.69)
Operating and administrative
expenditure (6,468.18) (5,957.94)
Other Income 327.46 315.87
Finance Costs (3,571.86) (2,971.88)
Utilisation fees - (186.18)
Depreciation and amortisation
expenses (1,812.53) (1,454.99)
(Loss) / profit before exceptional
items, tax expenses, minority interest
and share of (loss)/ profit of associates (2,502.29) (1,545.59)
Exceptional Items:
Profit on dilution in subsidiaries - 69.73
Profit on sale of jointly controlled
entities 34.44 1,658.93
Profit on sale of assets held for sale - 100.54
Loss on impairment of assets in
subsidiaries (115.74) (8.95)
Loss on account of provision towards
claims recoverable (130.99) -
Breakage cost of interest rate swap (91.83) -
(Loss)/ profit before tax expenses,
minority interest and share of (loss)/
profit of associates (2,806.41) 274.66
(Loss)/ profit from continuing
operations before tax expenses,
minority interest and share of (loss)/
profit of associates (2,814.84) (1,416.66)
Tax expenses (including tax adjustments
for prior years, deferred tax and MAT
credit entitlement) of continuing
operations (152.56) (161.60)
(Loss)/ profit from continuing operations
after tax expenses and before minority
interest and share of (loss)/ profit of
associates (2,967.40) (1,578.26)
Share of (loss)/ profit of associates
(net) (12.98) -
Minority interest - share of loss/ (profit)
from continuing operations 242.45 (115.27)
(Loss)/ profit after minority interest and
share of (loss)/ profit of associates from
continuing operations (A) (2,737.93) (1,693.53)
Profit / (loss) from discontinuing operations
before tax expenses and minority interest 8.43 1,691.32
Tax expenses (including tax adjustments for
prior years, deferred tax and MAT credit
entitlement) of discontinuing operations (0.25) (4.65)
Profit / (loss) after tax expenses and
before minority interest from discontinuing
operations 8.18 1,686.67
Minority interest - share of (profit) / loss
from discontinuing operations (B) (3.54) 16.87
Profit / (loss) after minority interest from
discontinuing operations (A B) 4.64 1,703.54
(Loss)/ profit after minority interest from
continuing and discontinuing operations (2,733.29) 10.01
Net deficit in the statement of profit or loss
- Balance as per last financial statements (1,183.56) (756.33)
Loss before appropriation (3,916.85) (746.32)
Appropriations (90.04) (437.24)
Net deficit in the statement of profit or (4,006.89) (1,183.56)
loss
Earnings per equity share (Rs.) - Basic and
diluted (per equity share of Rs. 1 each) (6.46) 0.03
Earnings per equity share (Rs.) from
continuing operations - Basic and diluted
(per equity share of Rs. 1 each) (6.47) (4.35)
Earnings per equity share (Rs.) from
discontinuing operations - Basic and 0.01 4.38
diluted (per equity share of Rs. 1 each)
Consolidated revenue from operations grew by 4.08% from Rs. 10,653.22
Crore to 11,087.68 Crore. Airport, Energy, Highways, EPC and other
segments contributed Rs. 5,463.73 Crore (49.28%), Rs. 4,450.58 Crore
(40.14%), Rs. 741.74 Crore (6.69%), Rs. 86.84 Crore (0.78%) and Rs.
344.79 Crore (3.11%) respectively to the revenue from operations.
Improved operating performance in Energy sector resulted in
consolidated revenue increasing from Rs. 10,653.22 Crore in the
previous year to Rs. 11,087.68 Crore in the current year. This has also
compensated for the negative impact of the Airports sector revenue on
account of non-levy of UDF in GHIAL and sale of ISG as well as lower
EPC sector revenue on account of lower business. Commissioning of EMCO
and Kamalanga power plants during previous year have resulted in
increase in operational costs, finance costs and depreciation charge,
but these plants are expected to contribute significantly to the
Group''s profitability in the near future.
During the current year ended March 31, 2015, as the efforts for
revival of GKUAEL project did not succeed, GKUAEL had issued a notice
of dispute to NHAI, invoking arbitration provisions as per concession
agreement and transferred the project costs of Rs. 130.99 Crore to
claims recoverable. In view of the SEBI direction received on this
account, the Group has made provision for such claims and disclosed the
same as an exceptional item in the financial statements. Based on an
internal assessment, an impairment provision of Rs. 61.80 Crore was
made against the goodwill pertaining to SJK and Rs. 53.94 Crore against
certain other entities and disclosed as exceptional item in the
financial statements.
DIAL has refinanced its external commercial borrowings during the year
and as a result, cancelled certain outstanding Interest Rate Swap, paid
Rs. 91.83 Crore towards such cancellation and disclosed the same as an
exceptional item in the financial statements.
It was another year of extreme challenges with continued constraints on
financing and fuel supply, but your Company successfully weathered it
and enhanced its fuel security and raised additional capital to retire
its existing debts. During the year, the Company successfully raised
additional equity of Rs. 1,476.77 Crore through Qualified Institutions
Placement (QIP), Rs. 141.75 Crore (being 25% of the consideration
amount for allotment of the warrants) through issuance of 18,00,00,000
warrants convertible into 18,00,00,000 Equity Shares to GMR Infra
Ventures LLP, promoter group entity and Rs. 1,401.83 Crore through
Rights issue, which was concluded during April Rs.15, apart from
favorable refinancing of existing debts of various group entities.
Your Company has achieved fuel security for Chhattisgarh power plant by
winning two coal mines and successfully tied up gas supply for 25% PLF
of Vemagiri power plant (387 MW) and Rajahmundry power plant (384 MW)
for four months. Your Company, along with its partner Megawide
Construction Corporation, has taken full operational control of the
Mactan Cebu International Airport and has also achieved financial
closure for the project.
Keeping pace with the Group''s philosophy, Transportation and Urban
Infrastructure sector is also constantly evolving itself in line with
the business opportunities and available skill sets. While doing so,
during the year under review, your Company took a conscious decision to
foray into the EPC segment of Railways and since have been fairly
successful in bagging three projects, Dedicated Freight Corridor
Corporation (DFCC) being the marquee one amongst them worth alone at
Rs. 5,080 Crore.
Presented below are the standalone financial results of the Company:
( Rs. In Crore)
Particulars March 31, March 31,
2015 2014
Revenue from operations 649.74 786.29
Operating and administrative expenditure (200.03) (525.39)
Other Income 19.48 4.77
Finance costs (537.29) (408.71)
Depreciation and amortization expenses (20.03) (8.42)
(Loss) / Profit before exceptional items
and tax expenses (88.13) (151.46)
Exceptional items:
Profit on sale of investment in subsidiary /
jointly controlled entity - 472.06
(Loss) on redeemable preference shares - (131.25)
Provision for diminution in the value of
investments in subsidiaries / jointly
controlled entities (262.40) (1.27)
(Loss) / Profit before tax (350.53) 188.08
Tax expenses (including deferred tax and
MAT credit entitlement) (2.12) (22.18)
(Loss) / Profit for the year (352.65) 165.90
Surplus in the statement of profit and
loss - Balance as per last financial
statements 429.37 309.06
Transfer from debenture redemption reserve 46.25 108.75
Profit available for appropriation 122.97 583.71
Appropriations:
Transfer to debenture redemption reserve 49.36 108.50
Depreciation adjustment 5.30 -
Equity dividend* 4.69 38.92
Tax on equity dividend* 0.80 6.92
Proposed preference dividend (March 31, 2014
Rs.1,868) 0.01 0.00
Tax on proposed preference dividend
[Rs. 23,139 (March 31, 2014 Rs. 318)] 0.00 0.00
Net surplus in the statement of profit and
loss 62.81 429.37
Earnings per share (Rs.) - Basic and
Diluted (0.83) 0.43
*current year equity dividend and tax on equity dividend represents
equity dividend and tax pertaining to the previous year ending March
31, 2014, paid during current year on the shares issued during the
year pursuant to QIP before the record date
The revenue from operations of the Company on standalone basis has
reduced by 17.36% from Rs. 786.29 Crore to Rs. 649.74 Crore on account
of completion of majority of the projects handled by the EPC segment.
Reduction in EPC revenue (Rs. 303.78 Crore, 64.82%) has been
compensated to great extent by the increase in other operating income
(Rs. 167.23 Crore). The operating and administrative expenditure has
also accordingly reduced by 61.93% from Rs. 525.39 Crore to Rs. 200.03
Crore.
During the current year ended March 31, 2015, based on an internal
assessment, the Company has made a provision of Rs. 262.40 Crore
towards diminution in value of its investment in GHL and disclosed the
same as an exceptional item in the financial statements. The diminution
in value has primarily arisen on account of the provision made against
the GKUAEL project claim and accumulated losses of GHVEPL.
Dividend / Appropriation to Reserves
Your Directors have not recommended any dividend for the financial year
2014-15. Preference dividend aggregating to Rs. 1,13,667 for the
financial year 2014-15 @ 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 and the same will be paid to the CCPS holders subject
to the approval of shareholders at the Annual General Meeting.
Reserves
The net movement in the major reserves of the Company for FY 2014-15
and the previous year are as follows:
(Rs. in Crore)
Particulars March 31, March 31,
2015 2014
General Reserve 40.62 40.62
Securities Premium Account 7,658.71 6,286.53
Surplus in Statement of Profit and Loss 62.81 429.37
Debenture Redemption Reserve 121.33 118.22
7,883.47 6,874.74
Management Discussion and Analysis Report
Management Discussion and Analysis (MDA) Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, is presented in a separate section forming part of the
Annual Report.
The detailed review of operations of each subsidiary''s business is
presented in the respective company''s Board''s Report and a brief
overview of the major developments thereof 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
Company''s airport business comprises of 3 operating airports viz.,
Delhi and Hyderabad International Airports in India and Mactan Cebu
International Airport in Philippines.
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 GMR Group (54%), Airports
Authority of India (AAI) (26%), Fraport AG Frankfort Airport Services
Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private
Limited (10%) and has entered into a long-term agreement to operate,
manage and develop the Indira Gandhi International Airport (IGIA),
Delhi.
Highlights of FY 2014-15:
DIAL surpassed the 40 million passenger mark in FY 2014-15, witnessing
a growth of 11% in traffic over previous year. Strong growth in
domestic cargo segment propelled DIAL to surpass Mumbai Airport in
cargo traffic with a 15% overall growth in FY 2014-15 over previous
year. Due to delay in determination of tariff for the 2nd control
period, the tariffs for the 1st control period have continued. DIAL
completed a landmark issuance and pricing of the inaugural USD 288.75
million 7-year Senior Secured bond offering which was rated Ba1 by
Moody''s and BB by S&P.
TATA-SIA Airlines Limited "Vistara" made IGIA its operations hub. Fly
Dubai, Pegasus Asia, Nepal Airlines and Transaero Airlines commenced
their International operations from IGIA. IGIA became the first airport
in the country to receive Super Jumbo Airbus A380 of the Singapore
Airlines.
Strong focus on developing organizational culture based on operational
excellence and customer focused initiatives helped DIAL become the
first Indian airport to be ranked number 1 airport in the world in the
25-40 million passengers per annum (mppa) category by achieving a score
of 4.90 in 2014.
Awards and Accolades received in FY 2014-15:
* Skytrax World Airport Award 2014-15 for "Best Airport in India /
Central Asia" and "Best Airport Staff in India / Central Asia";
* "Golden Peacock National Quality Award" 2015 for building a culture
of Total Quality at IGI Airport;
* "International Safety Award 2015" from the British Safety Council
with Distinction for the organization''s focus and commitment towards
providing a safe airport operation;
* "Cll - 5S Excellence Awards 2014" - Northern region; Service sector
by Confederation of Indian Industries (CII).
GMR Hyderabad International Airport Limited (GHIAL)
GHIAL is a JV Company promoted by the GMR Group (63%) in partnership
with 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 2014-15:
GHIAL handled a record volume of passengers, cargo and Air Traffic
Movements (ATMs) during the financial year. Passenger traffic during
the year crossed 10 million for the first time and cargo handling
exceeded 100,000 metric tonnes (MT) for the first time since inception,
underlining the significant growth attained by the airport in the 7
years of operations. The year 2014-15 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 (2 international and 1 domestic)
as well as cargo (2 international) fronts. Towards ensuring a
well-rounded and enjoyable experience to its passengers, the airport
also introduced a number of enhancements to its retail and shopping
experience, highlighted by a modern Video Wall and a number of new
stores and retail outlets at the passenger terminal. During the year,
GHIAL successfully overcame the financial challenges imposed by the
Single Till/Nil UDF regime through a combination of revenue
enhancement, improvement in cost efficiencies, tight control over
expenditures and cash flow management. Despite the challenges, GHIAL
also maintained its focus on service quality and passenger delight and
the airport continued to win accolades from passengers and industry
associations for its excellence. Airports Council International (ACI)
ranked RGIA among the top 3 in the world for Airport Service Quality
(ASQ) for the 6th year in a row.
Awards and Accolades received in FY 2014-15:
* World''s 3rd Best Airport 2014 in ASQ Rating by ACI;
* ACI''s Director General''s Rolls of Excellence in ASQ;
* Cll National Award for Excellence in Energy Management 2014;
* Best Landscape - Garden Festival 2015 (5th time in a row);
* RGIA has been rated as India''s 3rd Best Airport, by air travellers at
the 2015 World Airport Awards held at Passenger Terminal EXPO Paris,
France in March 2015;
* RGIA is also rated as the 6th Best Regional Airport in Asia and 10th
Best Airport in 5 - 10 million passengers per annum (mppa) category.
Aerotropolis Development
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 up to 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.
GMR Megawide Cebu Airport Corporation (GMCAC)
GMCAC is a JV between GMR (40%) and Megawide Corporation (60%) and has
entered into a concession agreement with Mactan Cebu International
Airport Authority for development and operation of the terminal and
landside facilities of Mactan Cebu International Airport for a period
of 25 years. GMCAC is expected to build a new terminal also.
Highlights of FY 2014-15:
GMCAC has taken operational responsibility for the airport on 1st
November, 2014 for the existing terminal. Financial closure of the
airport was completed in February 2015. GMCAC is focusing on increasing
its traffic base; both domestic and international and is working
closely with the airline community and the government bodies to boost
tourist traffic growth which is a key driver for the airport
profitability. As per the concession agreement, the GMCAC is expected
to build a new terminal. However there has been a delay in the handover
of land and GMCAC is in discussions with the grantor to work out a
mechanism to expedite handover of land and providing compensation to
GMCAC in line with the provisions of the concession agreement.
GMR Male International Airport Private Limited (GMIAL)
GMR Group along with its partner Malaysia Airports (Labuan) Private
Limited 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 will focus on questions of
liability and what forms of damages or compensation are recoverable by
GMR while the second phase will be to quantify the amount so
recoverable. In April 2014, the hearings for the first phase of
arbitration were completed. In June 2014, the tribunal ruled that the
unilateral termination of the concession agreement by GoM and MACL was
illegal and repudiatory. Broadly, the Tribunal declared that the
concession agreement was valid and binding and was not void for any
mistake of law or discharged by frustration of bargain or
administration, the GoM and MACL are jointly and severally liable for
damages to GMIAL for loss caused by wrongful repudiation of the
agreement and that the quantification of the damages and the interest
thereon will be determined in the next stage of arbitration by the same
tribunal.The preliminary hearing for quantification of damages is under
process.
GMR Aviation Private Limited
GMR Aviation Private Limited (GAPL) operates and owns one of the
youngest fleets in the country and addresses the growing need for
charter services in the country. The operations are managed by
professionals with robust processes and systems to ensure highest
levels of efficiency and safety. At the end of the FY, GAPL has one
Falcon aircraft, one Hawker aircraft and one helicopter in its fleet.
Aircraft - Maintenance Repair and Overhaul (MRO)
The MRO facility is a part of aero SEZ of GMR Hyderabad International
Airport. With GHIAL buying out 50% stake of Malaysian Aerospace
Engineering Sdn Bhd (MAE), GMR Aerospace Technic has become a wholly
owned subsidiary of GHIAL. The MRO facility has ultra-modern facilities
for aircraft maintenance, painting, avionics upgrades, interior
refurbishments, aircraft modifications and structural repairs. It can
cater to various types of narrow-body as well as wide-body aircraft
belonging to Airbus, Boeing, ATR and Bombardier families. During the
year under review, maintenance services were provided to 40 aircraft
including B737-800, B737-900, ATR- 72, A320, and A321 for domestic
customers and painting on Cessna Citation 560XL and ATR 72-500
aircraft. Additionally Engine Change, Nose Landing gear and Main
Landing gear change were carried out on B737-800 and B737-900 aircraft.
Apart from the above, seat retrofit was performed on two A320 aircraft.
The main customers during the year were Spicejet, Go Air and Jet
Airways. With the change in management post acquisition of MAE''s stake,
the MRO has seen an upturn in its fortunes and has recently won a
maintenance contract for an overseas client and is expected to add
another domestic carrier to its fold of customers.
GMR Airports Limited (GAL) CCPS
The Board approved the exercise of call option by the company for
purchase of CCPS held by the investors in GAL for the purpose of
consolidation of shareholding in GAL (see note 40 (ii) of the
consolidated financial statements). The completion of transaction is
pending receipt of requisite approvals from the relevant authorities.
Energy Sector
The Energy Sector companies along with its subsidiaries are operating
around 2,486 MWs of Coal, Gas, Liquid fuel and Renewable power plants
in India and around 4,000 MWs of power projects 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.
Following are the major highlights of the Energy Sector:
A. Operational Assets:
I. Generation:
1. Barge mounted Power Plant, Kakinada, Andhra Pradesh of GMR Energy
Limited (GEL):
* 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, 2015 on account of
non-availability of gas. Plant is kept under preservation since March
2013. Preservation methods were adopted based on Original Equipment
Manufacturers'' (OEM) procedures.
2. GMR Vemagiri Power Generation Limited (GVPGL) (370 MW):
* GVPGL, wholly owned subsidiary of GEL operates a 387.625 MW natural
gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh.
During the financial year, the plant experienced difficulties like
non-supply of gas from Reliance KG-D6 basin. Plant availability was
99.94% and it was not operational during the year. Plant was kept under
preservation from May 2013 due to non-availability of gas.
Preservation methods were adopted based on OEM procedures and past
experiences. O&M contract services were taken over from M/s KPS from
April, 2014 and completed one year of operation by GVPGL. The Plant
received a total credit of 3,21,755 CERs under Clean Development
Mechanism (CDM) for the second and third verification period;
* GVPGL is striving continuously to pursue Ministry of Power (MoP),
Ministry of Petroleum and Natural Gas (MoPNG), and Prime Minister''s
Office (PMO) for the gas allocation, pooling of gas (imported and
domestic gas) and supply of RLNG by importing LNG on short term basis.
3. Diesel Power Plant, Chennai, Tamil Nadu:
* GMR Power Corporation Limited (GPCL), in which GEL holds 51% stake
operates a 200 MW diesel powered power plant and sells power to Tamil
Nadu Electricity Board (TNEB). The PLF for this tariff year was 34.76%
as compared to 47.71% in 2013-14. The plant has successfully completed
16th year of operations & maintenance (O&M) and is effectively
implementing all the O&M practices independently on its own. Tamil Nadu
Generation and Distribution Corporation Limited (TAGENDCO) extended the
PPA from February 15, 2014 to February 14, 2015 with fresh tariff and
new terms and conditions;
* GPCL has requested TAGENDCO for extension of PPA from February 15,
2015 and is awaiting clearance for supplying power.
4. Solar Power plant, Charanka Village, Gujarat:
* GMR Gujarat Solar Power Private Limited (GGSPPL), wholly owned
subsidiary of GEL operates 25 MW power project at Charanka village,
Patan district, Gujarat. GGSPPL has entered into PPA with M/s. Gujarat
Urja Vikas Nigam Limited for supply of entire power generation. GGSPPL
has achieved commercial operation on March 4, 2012 and received
certificate of commissioning from M/s. Gujarat Energy Development
Agency ("GEDA"). M/s Indu Projects Limited has been awarded the
contract for operation and maintenance of the plant for a period of 5
years. Plant has achieved an Export PLF of 19.3% for FY 2014-15.
5. EMCO Energy Limited (EMCO) - 600 MW:
* The Plant consists of 2 x 300 MW coal fired Units with all associated
auxiliaries and Balance of Plant Systems. During the FY 14-15 both the
Fuel Supply Agreement (FSA) and Annual Contracted Quantity (ACQ)
quantities have been successfully amended to 1.3 Million Tonnes (each)
on June 10, 2014, and with this EMCO has a Coal supply Agreement with
South Eastern Coalfields Limited (SECL) for a total ACQ of 2.6 Million
Tonnes per annum;
* Signed long term PPA with TAGENDCO for 150 MW and with this 100% of
the plant capacity is now tied up via long term PPAs;
* Project debt refinanced with 18 months moratorium and 15 year loan
repayment at an interest rate of 12.15%;
* Favorable APTEL Order has come on POC charges resulting in
incremental revenue of approximately INR 450 Million;
* Plant has achieved a Gross plant load factor (PLF) of 68.8% for FY
2014-15;
* Long Term Access (LTA) granted for full commencement of Dadra Nagar
Haveli (DNH) 200 MW from July 2014 onwards and PPA compliance was
87.27%;
* Power Purchase Agreement (PPA) compliance for 200 MW Power Sale to
M/s Maharashtra State Electricity Distribution Company Limited (MSEDCL)
was 85.56 %;
* 100% Ash Utilization has been tied with nearby Cement Industries for
Fly Ash and with Western Coalfields Limited (WCL) for Bottom Ash;
* Weir construction for water availability by Maharashtra Industrial
Development Corporation (MIDC) is under way and expected to be made
ready in FY 2015-16.
6. GMR Kamalanga Energy Limited (GKEL) - 1,050 MW:
* GKEL in which GMR Energy Limited has 86% stake, with IIF & IDFC
holding the balance stake, has developed 1,050 MW (3x 350) coal fired
power plant at Kamalanga Village, Orissa;
* The plant is supplying power to Haryana through PTC India Limited and
Odisha through GRIDCO Limited and commenced supply of power to Bihar
through Bihar State Power Holding Company Limited;
* 85% of the capacity was tied-up in long term PPAs;
* Transmission constraint faced by the project was resolved in November
2014;
* GKEL has received Letter of Assurances from Mahanadi Coalfields
Limited for 1050 MW of which 500 MW is for firm linkage and 550 MW is
for tapering linkage. During the year under review, 350 MW tapering
linkage has been transferred to Eastern Coalfields Limited (ECL). GKEL
has signed Fuel Supply Agreement (FSA) for firm linkage for 500 MW and
tapering linkage for 200 MW with Mahanadi Coalfields Limited and
getting coal supply for firm linkage corresponding to 500 MW and 200 MW
for tapering linkage. GKEL has also signed FSA with ECL for 350 MW
tapering linkage and coal supply corresponding to tapering linkage for
204 MW has commenced;
* The Hon''ble Supreme Court of India in its Orders dated August 25,
2014 and September 24, 2014 cancelled the allocations of all but four
coal blocks made between 1993 and 2010. As a result, the allocation of
the Rampia Coal Mine has also been cancelled by the aforesaid Orders.
But GKEL coal supply was not impacted because of already executed Firm
and Tapering coal supply agreement;
* GKEL has started commercial supply of power to GRIDCO Limited from
April 30, 2013 to the State of Haryana through PTC India Limited from
February 07, 2014 and to the State of Bihar from September 01, 2014
through Bihar State Power Holding Company Limited under Long Term PPA.
GKEL has also sold surplus power on merchant basis to other customers;
* GKEL has completed the construction of dedicated transmission lines
to Angul, Odisha for connectivity to City Transmission Utility (CTU)
network and to Meramandali for connectivity to Odisha State
Transmission Utility (STU) system. With this, GKEL has achieved the
capability to evacuate full power from the station and generated full
capacity of 1,050 MW on March 30, 2015. During this period, GKEL has
generated 4,838 Million Units (MU) of commercial power and sold 4,321
MU, the balance being the auxiliary power consumption.
II. Transmission:
1. Aravali Transmission Service Company Limited (ATSCL):
* ATSCL, the wholly owned subsidiary of GEL, is engaged in
implementation of project for 400 kV S/C Hinduan-Alwar transmission
line (85 km) and 2 x 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. 160.90 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 date of Project Award;
* Several critical Right of way (ROW) challenges have been successfully
resolved and the Transmission Line construction was completed in June,
2014;
* The 400 kV Hindaun-Alwar transmission line was successfully charged
on July 25, 2014. Grid Substation was charged on July 31, 2014;
* Deemed COD was considered from July 17,2014 in line with the
provisions of Transmission Service Agreement (TSA);
* Tariff Revision Petition was filed with Rajasthan Electricity
Regulatory Commission (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);
* The asset has performed at more than the target 98% availability.
2. Maru Transmission Service Company Limited (MTSCL):
* MTSCL, the wholly owned subsidiary of GEL, is engaged in
implementation of project for 400 kV S/C Bikaner-Deedwana Transmission
Line (129 Km), 400 kV S/C Ajmer-Deedwana Transmission Line (106 Km),
220 kV D/C Sujangarh -Deedwana Transmission Line (30 Km) 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. 248.90 Crore.
This is the first PPP project of its kind in Rajasthan, which is
executed on Build Own Operate Maintain (BOOM) basis for a concession
period of 25 years from date of Project Award;
* COD declared by Order of the RERC from December 16, 2013;
* Relief granted by RERC to pay all unpaid revenue in arrears from
December 16, 2013 and is under compliance by the customers;
* Received RERC Order resulting in incremental revenue;
* Tariff Revision Petition was filed with 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);
* The asset has performed at more than the target 98% availability.
B. Projects:
1. GMR Rajahmundry Power Project, Andhra Pradesh - 768 MW:
* GMR Rajahmundry Energy Limited (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. During the year under review all the equipment of
the project were kept under preservation as per the OEM guidelines due
to non-availability of natural gas for commissioning and commercial
operation;
* GREL is striving continuously to pursue MoP, MoPNG, and PMO for the
gas allocation, pooling of gas (imported and domestic gas) and supply
of RLNG by importing LNG on short term basis;
* GREL, a member of the independent gas based Power Producers''
Association has filed a petition in Hon''ble High Court of Andhra
Pradesh for the allocation of gas to the project;
* Keeping in view the current situation of the availability of gas,
GREL expects that the project could start the commercial operations
within few months from the date of supply of gas.
2. GMR Chhattisgarh Energy Limited (GCEL) - 1,370 MW:
* GCEL, wholly owned subsidiary of GEL, is engaged in setting up of
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. GCEL has received all the necessary
statutory and environmental clearances. The project participated in bid
and won two coal blocks, namely Talabira and Ganeshpur, in recently
concluded e-auction;
* M/s. Doosan Projects India Private Limited is the main EPC contractor
of GCEL for Boiler Turbine Generator (BTG) supply, onshore supply,
civil works, erection, testing and commissioning. The Balance of Plant
(BOP) contracts have been awarded to Gammon India Limited, Ion Exchange
India Limited, L&T Limited and other contractors. The commissioning
works of the project are in full swing and the overall progress of
Boiler Turbine Generator contract has been 98.11% against the plan of
100%, the progress of engineering, procurement and construction being
100%, 100% and 98.52 % respectively;
* All major BOP packages have been completed and operational for
commissioning of Unit-1;
* Ganeshpur coal block (located in Latehar, Jharkhand and was 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 FY18
and reach its peak production capacity by FY21;
* Talabira coal block (located in Odisha and was earlier allotted to
HINDALCO) has a reserve of about 8.5 MT. This is an operating coal
block and GCEL is expected to start production immediately in the
financial year 2015-16.
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. With regard to awarding of contracts, main
civil packages were awarded and for Electro Mechanical & Hydro
Mechanical Package tendering process was completed. Bids are under
evaluation. Financial Closure (FC) process is in the advanced stage.
Project has received term loan sanction from Power Finance Corporation
Limited. Common loan agreement is under discussion. However, FC
process was delayed due to Hon''ble Supreme Court''s order for stay on 24
Hydro Electric Projects in Uttarakhand (Order dated May 07, 2014) and
the stay order is in effect till date.
4. GMR Bajoli Holi Hydropower Private Limited (GBHHPL) (180 MW):
* GBHHPL, wholly owned subsidiary of GEL, is implementing 180 MW hydro
power plant on the river Ravi at Chamba District Himachal Pradesh.
GBHHPL has achieved financial closure on April 25, 2013 and has tied up
the debt requirement of Rs. 1380 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 possession. Contract agreement for execution of main
civil works in two packages stand awarded to Gammon India Limited and
Electro-Mechanical contract has been awarded to Alstom India Ltd. Basic
infrastructure works including approach roads to project components are
completed and Civil works are going on at all work fronts (except at
Surge Shaft). The Board of Directors are pleased to inform that GBHHPL
has 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. GBHHPL has appointed Geo Data Mahab, an
internationally renowned Hydro Consultant as Owner''s Engineer; Land
securitization was completed successfully.
5. Himtal Hydropower Company Private Limited (HHPPL) - (600 MW):
* HHPPL, 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, post PDA
execution of Upper Karnali Hydro Electric Project (UKHEP), Project
Development Agreement (PDA) negotiations/ discussions has been started
with Investment Board Nepal (IBN) for Upper Marsyangdi (UMS-2) and is
on right track. The land for the entire project has been identified and
the case has been submitted to GoN. Connectivity application was
submitted to PGCIL in April 2015 through liaison office of Himtal (the
Generating Company) in India. Initial discussions were initiated for
tying up sale of power with Government of Bangladesh, Power Trading
Company (PTC) / NTPC / Vidyut Vyapar Nigam Limited (NVVN). Cadastral
mapping works are underway for transmission line. Joint Development
Agreement (JDA) was executed with International Finance Corporation
(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. It is exploring for Chinese financing and various
discussions were held with Chinese Banks and EPC contractors in China.
6. GMR Upper Karnali Hydro Power Public Limited (GUKPL) - (900 MW):
* GUKPL, subsidiary of GEL, is developing 900 MW Upper Karnali
Hydroelectric project located on river Karnali in Dailekh, Surkhet and
Achham District of Nepal. During the year under review, PDA
negotiations were completed and were executed on September 19, 2014 for
generation and transmission line projects with Government of Nepal
(GoN) represented by Investment Board of Nepal (IBN). Post execution of
PDA, several key activities as per PDA compliance and basic infra works
have been initiated. The Project land has been identified and joint
verification for Government & Forest land, cadastral mapping etc. are
under progress. Initial discussions were initiated for power sale tie
up with Government of Bangladesh, Power Trading Company (PTC) / NTPC
Vidyut Vyapar Nigam Limited (NVVN). Upper Karnali is in the process of
rerouting the transmission line as per the directions of Ministry of
Energy, Government of Nepal. Joint Development Agreement (JDA) was
executed with IFC (part of World Bank Group) 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.
7. 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 Central Electricity Authority
(CEA). Environmental Impact Assessment (EIA) / Social Impact Assessment
(SIA) studies have been completed for the project and public hearing
was successfully conducted at the project site in July, 2014. Post
public hearing, EIA & Environment Management Plan (EMP) studies were
finalized and were submitted with Ministry of Environment and Forest
(MoEF) for grant of Environmental Clearance. Defence clearance for
setting up the project has been received from Ministry of Defence, GoI.
C. Mining Assets:
1. PT Barasentosa Lestari, (PTBSL):
* Your Company had acquired 100% stake in PT Barasentosa Lestari
(PTBSL) in September 2008 which is having 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 and the coal is being
transported from mine by river barging. 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):
* Your Company through its overseas subsidiary GMR Coal Resources Pte.
Ltd. had acquired 30% stake in PT GEMS, a group company of Sinar Mas
Group, Indonesia. PT GEMS, a limited liability company, is listed on
the Indonesia Stock Exchange. PT GEMS is carrying out mining operations
in Indonesia through its subsidiaries which own coal mining concessions
in South Kalimantan, Central Kalimantan and Sumatra. Coal mines owned
by PT GEMS and its subsidiaries have total resources of more than 1.9
billion tons and Joint Ore Reserves Committee (JORC) certified reserves
of 640 MT of thermal coal. GMR Group has a Coal off take Agreement with
PT GEMS which entitles to off take coal for 25 years. This strategic
alliance with Sinar Mas Group significantly enhances the fuel security
of thermal power plants under construction and development by GMR Group
and also provides a coal supply portfolio for coal trading activity.
3. Homeland Energy Group Limited (HEG):
* In the last financial year, HEG transferred its stake in Kendal and
Eloff mines. With the disposal of all the mining assets, HEG was
essentially a shell company with no major assets. In December 2014, GEL
entered into share sale agreement for transfer of its entire stake in
HEG.
Transportation:
Highways:
GMR Highways Limited, wholly owned subsidiary of the Company, is one of
the leading highways developers in India with 9 operating highways
assets (including two projects which we hold minority interest)
totalling to 731.28 kms. The FY 2014-15 has seen a subdued growth in
the highways sector due to various factors such as slowed economic
situation, delay in clearances, sand quarry and mining bans, power
shortage, funding constraints etc. This has resulted in lower
investment from private players in infrastructure in general including
roads and highways sector. During FY 2014-15, final completion of
Hungund-Hospet Project was achieved and toll collection has begun on
3rd toll plaza of the project as well. 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 2015-16.
Railways:
Pursuant to the strategic decision taken to pursue EPC opportunities
outside GMR Group and consequent to the Group''s entry into Railway
Projects last year, in FY 2014-15, the Group has won construction
contract from Dedicated Freight Corridor Corporation of India Limited
for design and construction of Civil, Structures and Track Works for
Double Line Railway involving formation in Embankments / Cuttings,
Ballast on formation, Track Works, Bridges, Structures, Buildings,
Yards, Integration with Indian Railway existing Railway System and
Testing & Commissioning on Design-Build-Lump-Sum Basis for Mughalsarai-
New Karchana Station (including) (Package 201) and for New Karchana
Station (excluding) -New Bhaupur Station (Excluding) (Package 202). The
contract value for this work is Rs. 5,080 Crore.
Also a consortium led by your Company has won construction of Roadbed,
bridges, supply of ballast, Track linking, Yard arrangements (excluding
supply of rails & Line sleepers), construction of Booking offices,
other service buildings, platforms, platform shelters, FOBs, Electrical
(Railway Electrification and General Electrification), Signalling and
Telecommunication works project for 77 Km (in 3 packages) in
Secunderabad and Hyderabad Divisions of South Central Railway, Andhra
Pradesh, India from Rail Vikas Nigam Limited (RVNL).
During the year, your Company also started construction works of
doubling for 67 Km railway track between Jhansi and Bhimsen stations on
Jhansi Division of North Central Railway in the State of Uttar Pradesh,
India. The project was awarded by Rail Vikas Nigam Limited (RVNL) in
February 2014.
Urban Infrastructure:
The Group is developing a 3,000 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 3,000 acres in the
influence area of proposed Chennai- Bengaluru Industrial Corridor.
Krishnagiri SIR is being planned to house the following manufacturing
clusters:
* Automotive & Ancillary;
* Defense and Aerospace;
* Precision Engineering;
* Machinetools;
* Electronics Product Manufacturing;
Designed to encompass a complete ecosystem, Krishnagiri SIR focuses on
Manufacturing enclaves, Innovation Centers, Manufacturing Support
Services Center, Multi Skill Development Centre and other social
infrastructure like housing, convention center, commercial area and
range of services that are essential for a large industrial city center
of this scale. 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
facilities shall be provided;
* Water - Potable water from both ground as well as from dam;
* Power - 230 KV level dedicated sub-station with a Solar power plant.
The entire infrastructure shall be developed & maintained by GMR Group
underscoring its commitment to quality, service and time lines. The
"integrated" design would endeavor to provide first world standard
residential, social and commercial amenities making this zone a truly
"self-contained".
Kakinada SIR:
GMR Group owns 51% in Kakinada SEZ Private Limited, which is developing
Kakinada 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 SIR will be self-contained 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 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:
* Master Plan for Phase 1 development of around 916 acres has been
completed;
* Internal roads and plots have been developed;
* A Chinese toy manufacturing company has already started its training
centre and providing training for ~400 people and will employ over 1500
people by end of 2015 and over 3000 people in the next 3 to 4 years;
* Has signed an agreement with Tata Business Services (TBSS) for Rural
BPO. Center has started the operations in February, 2015. TBSS has
recruited 20 youth [16 from the Rehabilitation & Resettlement (R&R)
colony and 4 from nearby villages] and started providing training for
another batch of 25 people;
* Has completed DPR and other Technical Studies for Port, additional
one season study for Port is underway for conducting Public Hearing.
Consolidated Financial Statements
In accordance with the Companies Act, 2013 and Accounting Standard (AS)
- 21 on Consolidated Financial Statements 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 statements is provided in the Annual Report.
Subsidiaries, Joint Ventures and Associate Companies
As on March 31, 2015, the Company had 125 subsidiary companies apart
from 23 joint ventures and 3 associate companies. During the year under
review, companies listed below have become or ceased to be Company''s
subsidiaries, joint ventures 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 31,2015 is provided in "Annexure A"
to this Report.
East Godavari Power Distribution Company Private Limited, Suzone
Properties Private Limited, GMR Utilities Private Limited, Lilliam
Properties Private Limited, GMR Aerospace Engineering Company Private
Limited, GMR Aero Technic Limited and Delhi Airport Parking Services
Private Limited became subsidiaries during the financial year 2014-15.
Homeland Energy Corporation (HEC), Homeland Mining & Energy SA (Pty)
Limited (South Africa), Homeland Coal Mining (Pty) Limited (South
Africa), Corpclo 331 (Pty) Limited (South Africa) and Ferret Coal
(Kendal) (Pty) Limited (South Africa) ceased to be subsidiaries during
the financial year 2014-15.
GMR Megawide Cebu Airport Corporation (Philippines) became joint
venture during the financial year 2014-15.
Nhalalala Mining (Pty) Limited (South Africa), Devyani Food Street
Private Limited, Delhi Select Services Hospitality Private Limited and
Delhi Cargo Service Center Private Limited ceased to be the joint
ventures during the financial year 2014-15.
No Companies became or ceased to be an associate company during the
financial year 2014-15.
Report on the performance and financial position of each of the
subsidiaries, JVs and associate companies 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, 2015, 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 judgement 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, 2015 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. The company works towards continuous
improvement in governance practices and processes, in compliance with
the statutory requirements. Board governance upgrades are underway.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The requisite
Certificate from the Practicing Company Secretary confirming compliance
with the conditions of Corporate Governance as stipulated under the
aforesaid Clause 49 is attached to this Report. Also a detailed report
on Corporate Governance practices followed by the Company, in terms of
Clause 49 (X) of the Listing Agreement with the Stock Exchanges, is
provided separately in this Annual Report.
Business Responsibility Report
As stipulated under Clause 55 of the Listing Agreement, 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 financial year with related parties were in the ordinary
course of business and on an 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. 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 set 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 has been 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 during the year under
review, towards the mandatory community service CSR activities, which
are as under:
* Education
* Health, Hygiene & Sanitation
* Empowerment&Livelihoods
The Company would also undertake other need based initiatives in
compliance with Schedule VII to the Companies Act, 2013. During the
year, the Company has spent Rs. 2.92 Crore (more than 2% of the average
net profits of the Company for the last three financial years) on CSR
activities.
The Annual Report on CSR activities is annexed as "Annexure B" to this
Report. Further, 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
In the rapidly changing business environment, your Company is exposed
to a number of risks that impact its businesses in varying measures. It
is imperative to identify and address these risks and at the same time
leverage opportunities for achieving Company''s objectives.
Your Company''s Enterprise Risk Management (ERM) framework is in line
with the current best practices and effectively addresses the emerging
challenges of its various businesses.
Significant developments during the year under review include:
* Risk assessment was carried out in detail at bid stage of various
projects in Energy, Coal mines auctions and Transportation sector
(Railway EPC projects) with emphasis on independent views on key
business assumptions in order to promote informed decision-making;
* During the year, the focus was on decentralization, internal
capability building and deployment of the frameworks through ERM teams
in sectors and where needed, through outsourced partners;
* With successful pilot-implementation of the Project Risk Management
(PRM) framework, the same is being replicated at all projects with an
objective to enable effective control over project completion time and
costs;
* A draft of the Risk Appetite Framework for the Group has been
developed to establish thresholds for quantum of risks that are
acceptable in Group''s businesses;
* A Physical Risk Benchmarking framework for Energy assets has been
developed and is ready for deployment;
* Moving towards e-enablement of ERM processes through deployment of IT
tools across the Group to capture, report and to escalate risks across
the sectors and business units.
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 Management Discussion and Analysis.
Risk Management Policy
During the year, the Board of Directors of the Company on the
recommendation of the Audit Committee, has approved the Risk Management
Policy.
ERM Philosophy
The ERM philosophy of the Group is built based on its vision and
values. The Group upholds its vision "To be an institution in
perpetuity that will build entrepreneurial organizations, making a
difference to society through creation of value."
The Group has developed a dynamic growth strategy and is in the process
of implementing robust institution building processes in pursuit of its
vision. ERM aims at balancing the two by ensuring that key decisions
with regard to strategy and institution building are commensurate with
the Group''s risk appetite.
The GMR Group''s ERM philosophy is "To integrate the process for
managing risk across GMR Group and throughout its business and life
cycle to enable protection and enhancement of stakeholder value."
The Group has developed a dynamic growth strategy and is in the process
of implementing robust institution building processes in pursuit of its
vision. ERM aims at balancing the two 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
Company.
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 and the
Articles of Association of the Company, Mr. K.V.V. Rao and Mr. B.V.N.
Rao, Directors of the Company, retire by rotation at the ensuing Annual
General Meeting of the Company and are eligible for reappointment. Mr.
B.V.N. Rao has expressed his desire to offer himself for reappointment
and Mr. K.V.V. Rao has expressed his desire not to offer himself for
reappointment.
Based on the recommendation of the Nomination and Remuneration
Committee, the Board of Directors of the Company in its Meeting held on
September 18, 2014 had appointed Mrs. Vissa Siva Kameswari as an
additional Director of the Company with effect from October 1, 2014,
for a period up to the conclusion of the 20th Annual General Meeting of
the Company. The Company has also received requisite notice in writing
pursuant to Section 160 of the Companies Act, 2013 from a member along
with requisite deposit proposing the candidature of Mrs. Vissa Siva
Kameswari for appointment as an Independent Director of the Company at
the ensuing Annual General Meeting of the Company.
The brief resume and details of Directors who are to be appointed/re-
appointed are furnished in the Notice for the Annual General Meeting.
The Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence as
prescribed both under Section 149(6) of the Companies Act, 2013 and
Clause 49 of the Listing Agreement with the Stock Exchanges.
Annual evaluation of Board performance, Board Committees and individual
directors pursuant to the provisions of the Act and the corporate
governance requirements under Clause 49 of the Listing Agreements has
been carried out. The performance of the Board was evaluated based on
the criteria like Board composition and structure, effectiveness of
board processes, information and functioning etc. The performance of
the committees was evaluated based on the criteria such as the
composition of committees, effectivene
Dear Members,
The Board of Directors present the 18th Annual Report together with the
audited accounts of the Company for the year ended March 31, 2014.
Financial Results
The Company, as a holding company, operates in four different business
sectors - Energy, Airports, Highways and Urban Infrastructure 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 for
implementing the projects undertaken by the subsidiaries and others.
The Company''s revenue, expenditure and results of operations are
presented through consolidated financial statements and the details are
given below:
(Rs. in Crore)
Particulars March 31, 2014 March 31, 2013
Revenue from operations 10,653.22 9,974.86
Revenue share paid / payable to
concessionaire grantors (1,943.69) (1,669.48)
Operating and administrative expenditure (5,957.94) (5,697.34)
Other Income 315.87 277.19
Finance Costs (2,971.88) (2,099.00)
Utilisation fees (186.18) (130.87)
Depreciation and amortisation expenses (1,454.99) (1,039.78)
(Loss) / profit before exceptional items,
tax expenses and minority interest (1,545.59) (384.42)
Exceptional Items:
Profit on dilution in subsidiaries 69.73 -
Profit on sale of jointly controlled
entities / subsidiary 1,658.93 1,231.25
Profit on sale of assets held for sale 100.54 -
Loss on impairment of assets in subsidiaries (8.95) (251.37)
Assets write off in a subsidiary - (202.61)
Profit / (loss) before tax expenses and
minority interest 274.66 392.85
Profit / (loss) from continuing operations
before tax expenses and minority interest (1,408.28) (310.36)
Tax expenses (including tax adjustments for
prior years, deferred tax and MAT credit
entitlement) of continuing operations (161.33) (241.62)
Profit / (loss) after tax expenses and before
minority interest from continuing
operations (1,569.61) (551.98)
Minority interest - share of (profit) /
loss from continuing operations (117.66) (86.40)
Profit / (loss) after minority interest
from continuing operations (A) (1,687.27) (638.38)
Profit / (loss) from discontinuing
operations before tax expenses and
minority interest 1,682.94 703.21
Tax expenses (including tax adjustments
for prior years, deferred tax and MAT
credit entitlement) of discontinuing
operations (4.92) (15.82)
Profit / (loss) after tax expenses and
before minority interest from
discontinuing operations 1,678.02 687.39
Minority interest - share of (profit) /
loss from discontinuing operations 19.26 39.11
Profit / (loss) after minority interest
from discontinuing operations (B) 1,697.28 726.50
Profit / (loss) after minority interest
from continuing and discontinuing
operations (A B) 10.01 88.12
Net deficit in the statement of profit or
loss - Balance as per last
financial statements (756.33) (714.17)
Loss before appropriation (746.32) (626.05)
Appropriations (437.24) (130.28)
Net deficit in the statement of profit or
loss (1,183.56) (756.33)
Earnings per equity share (Rs.) - Basic and
diluted (per equity share of
? 1 each) 0.03 0.23
Earnings per equity share (Rs.) from continuing
operations - Basic and diluted (per equity
share of Rs. 1 each) (4.33) (1.64)
Earnings per equity share (Rs.) from
discontinuing operations - Basic and
diluted (per equity share of Rs. 1 each) 4.36 1.87
Consolidated revenue from operations grew by 6.80% from Rs. 9,974.86
Crore to Rs. 10,653.22 Crore. Airport, Energy, Highways, EPC and other
segments contributed Rs. 5,996.12 Crore (56.28%), Rs. 3,342.61 Crore
(31.38%), Rs. 737.88 Crore (6.93%), Rs. 239.75 Crore (2.25%) and Rs. 336.86
Crore (3.16%) respectively to the revenue from operations.
As part of your company''s strategy for long term value creation for its
shareholder and portfolio churning, your company successfully divested
its 40% stake in Sabiha Gokcen Airport in Istanbul, Turkey i.e.
Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim Yapim Ve Isletme
Sirketi (''ISG'') and the hotel entity at Turkey Airport, LGM Havalimani
Isletmeleri Ticaret Ve Turizm Anonim Sirketi (''LGM''). This has resulted
in a profit of Rs. 1,658.93 Crore (net of cost incurred towards sale of
equity stakes), which is presented as an exceptional item in the
financial statements. The group completed the divestment of 74% stake
each held in GMR Jadcherla Expressways Limited and GMR Ulundurpet
Expressways Private Limited and has recognized a profit of Rs. 69.73
Crore on dilution of stake in these subsidiaries. The group also
completed the sale transaction for the coal mines of Homeland Energy
Group Limited (HEGL) in Presented below are the standalone financial
results of the Company:
South Africa after obtaining the requisite approvals and has recognized
a profit on sale of assets held for sale of Rs. 100.54 Crore. This
comprises of profit of Rs. 37.02 Crore recognized on sale of one of such
mines and recognition of foreign exchange gain of Rs. 63.52 Crore
(inclusive of Foreign Currency Translation Reserve) on account of
disposal of equity stake in the coal mine entities. During the year
ended March 31, 2013 the Group had made an Impairment provision of Rs.
251.37 Crore towards carrying value of net assets of HEGL.
Despite an extremely challenging year with constraints on fuel and
financing amongst other concerns, your company has endeavored to focus
on operationalization of its projects. Your company''s energy sector
successfully commissioned all units of EMCO and Kamalanga (Phase I)
power plants and achieved partial completion of Chennai Outer Ring
Road. Reflecting on its strong airports strategy, your company along
with its partner, Megawide, has won the Mactan Cebu International
Airport (MCIA), a brownfield airport project in the Republic of
Philippines. Your company has signed a 25 year concession agreement to
renovate and expand the MCIA, the second largest Airport in Philippines
and a tourist gateway to the country.
(Rs. in Crore)
Particulars March 31, 2014 March 31, 2013
Revenue from operations 786.29 1,432.79
Operating and administrative
expenditure (525.39) (1072.01)
Other Income 4.77 28.58
Finance costs (408.71) (374.43)
Depreciation and amortization
expenses (8.42) (8.31)
(Loss) / Profit before exceptional
items and tax expenses (151.46) 6.62
Exceptional items:
Profit on sale of investment in
subsidiary / jointly controlled
entity 472.06 75.83
(Loss) on redeemable preference
shares (131.25) -
Provision for diminution in the
value of investment in a jointly
controlled entity (1.27) -
Profit before tax 188.08 82.45
Tax expenses (including deferred
tax and MAT credit entitlement) (22.18) (29.00)
Profit for the year 165.90 53.45
Surplus in the statement of profit
and loss - Balance as per last
financial statements 309.06 382.37
Transfer from debenture redemption
reserve 108.75 -
Profit available for
appropriation 583.71 435.82
Appropriations:
Transfer to debenture redemption
reserve 108.50 81.53
Proposed equity dividend 38.92 38.92
Tax on proposed equity dividend 6.92 6.31
Proposed preference dividend
[Rs.1,868] 0.00 -
Tax on proposed preference
dividend [Rs. 318] 0.00 -
Net surplus in the statement of
profit and loss
Earnings per share (Rs.)
- Basic and Diluted 0.43 0.14
The revenue from operations of the Company on standalone basis has
reduced by 45.12% from Rs.1,432.79 Crore to Rs. 786.29 Crore on account of
completion of majority of the projects handled by the EPC segment. The
operating and administrative expenditure has also reduced accordingly
by 51% from Rs. 1,072.01 Crore to Rs. 525.39 Crore. During the year, the
company has divested its equity stake in Turkey Airport entity (ISG)
and this has resulted in a profit of Rs. 458.78 Crore (net of cost
incurred towards sale of equity stake), which is presented as an
exceptional item in the financial statements. Loss on redeemable
preference shares amounting to Rs. 131.25 Crore and provision for
diminution in the value of investment in the Ground Handling jointly
controlled entity at Turkey (Istanbul Sabiha Gokcen Uluslararasi
Havalimani Yer Hizmetleri Anonim Sirketi) amounting to Rs. 1.27 Crore
have been shown as an exceptional item in the financial statement.
Loss on redeemable preference shares amounting to Rs. 131.25 Crore was on
account of the waiver of the premium paid by the Company on conversion
of the 1% non-cumulative preference shares of GEL as part of the
Amended and Restated Share Subscription agreement with the PE investors
of GEL. This was done to maintain optimum fair value per share and
enabled GEL and the Company to conclude the arrangement in favourable
terms.
Dividend
The Board of Directors has recommended a dividend of Rs. 0.10 per equity
share of Rs. 1 each (10%) for the financial year (FY) ended March 31,
2014 and a preference dividend aggregating Rs. 1,868 on pro rata basis
(from March 26, 2014 to March 31, 2014) @ 0.001% per annum on
11,366,704 Compulsorily Convertible Preference Shares (CCPS) of face
value of Rs. 1000/- each, subject to the approval of shareholders at the
Annual General Meeting.
In view of the qualification of the audit report by the Company''s
Auditors on recognition of profit of sale of ISG in the financial
statements for the current year ended March 31, 2014, the Board of
Directors had examined and satisfied themselves that the surplus
available for appropriation, before considering the profit on sale of
ISG is sufficient for payment of dividend recommended by the Board.
Further, the audit report contains a Qualification on the significant
doubt about the going concern of GMIAL and GADLIL. However, based on
the recent favorable arbitration award, internal assessment and legal
opinion, the Group is confident of getting a favorable award and expect
no adverse impact on the financials.
Subsidiary Companies
As on March 31, 2014, the Company had 123 subsidiary companies apart
from other jointly controlled entities and associates. Operation of
businesses through subsidiaries is mainly due to requirement of
concession agreements. The complete list of subsidiary companies as on
March 31, 2014 is provided in Annexure ''A'' to this Report.
Review of Operations/Projects of Subsidiary Companies and EPC
The detailed review of business operations of each of the subsidiaries
is presented in the respective Company''s Directors'' Report and a brief
overview of the major developments thereof is presented below. Further,
Management Discussion and Analysis, forming part of this Report, also
brings out a brief review of the business operations of various
subsidiaries and jointly controlled entities.
Airport Sector
Airports business consists of two operating airports in India at Delhi
and Hyderabad, and signed a concession agreement for Cebu airport in
April 2014.
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 GMR Group (54%), Airports
Authority of India (26%), Fraport AG Frankfurt Airport Services
Worldwide (Fraport) (10%) and Malaysia Airports (Mauritius) Private
Limited (10%) and has entered into a long-term agreement to operate,
manage and develop the Indira Gandhi International Airport (IGIA),
Delhi.
Highlights of FY 2013-14:
Despite the economic recession worldwide, DIAL has registered a
significant growth in passenger and Cargo traffic in FY 13-14 with
36.88 million passengers (with year-on-year growth of 7.3%) and 605,699
MT of cargo (with year-on-year growth of 10.9%).
Further, there were significant successes in implementing operationa
efficiency and cost rationalization initiatives. Specifically, Business
Excellence initiatives and TOC (Theory of Constraints) implementation
contributed significantly towards the institutionalization of a
''process-based approach'' and achievement of Operational Excellence. An
example was the Delhi Airport Collaborative Decision Making (DA-CDM)
implementation which improved the operational efficiency significantly
by achieving a high On Time Performance (OTP) (~88%) as well as peak
hour Air Traffic Movements (ATM) of 78.
On the Operations front, Malindo Airlines and Tajik Air were new
entrants in the airline segment while new sectors connected include
Melbourne, Sydney, Birmingham and Bishek. Further, DIAL enjoyed
excellent improvement in the quality of passenger service delivery and
maintained ASQ Ranking of 2nd Best Airport in 25-40 million passengers
per annum (mppa) category for 3rd year in a row. On the Aerocity front,
operations commenced for 4 Hotels (JW Marriott, Lemon Tree, Red Fox and
Holiday Inn).
Additionally, DIAL became the 1st Airport in India (and one of the few
Airports in world) to commission a 2.14 MW Photo Voltaic (PV) solar
power plant for captive use. This plant is expected to reduce the
Airport energy consumption from State Electricity Grid by 3.2 million
units per annum.
Awards and Accolades received in FY 2013-14:
- CNBC AWAAZ Travel Awards for Best Managed Airport (3rd year in a
row);
- "Best Airport in India and Central Asia" in SKYTRAX - 2014 World
Airport Awards;
- First Airport across the Globe to have successfully registered with
United Nations Framework Convention on Climate Change (UNFCCC) as Clean
Development Mechanism (CDM);
- First IATA e-freight compliant Airport in India;
- Globally recognized Airport Carbon Accredited ''Optimization'' Award
for its accomplishments in effectively managing and reducing carbon
emissions from Airport Council International (ACI);
- Airport Carbon Accredited ''Optimization'' Award by ACI;
- ISO 39001: 2012 Certification - Road Traffic Safety (RTS) Management
System; 1st organization in India and 1st Airport in the world;
- International Safety Award 2013, British Standards Institution (BSI);
- Indian National Suggestion Schemes'' Association (INSSAN) Award for
Employee Engagement;
- 12th Annual Greentech Safety Award 2013 in Gold Category in Aviation
Services Sector.
GMR Hyderabad International Airport Limited (GHIAL)
GHIAL is a JV Company promoted by the GMR Group (63%) in partnership
with AAI (13%), Government of Andhra Pradesh (now Government of
Telangana) (13%) and MAHB (Mauritius) Private Limited (11%). GHIAL has
set up India''s first Greenfield Airport, Rajiv Gandhi International
Airport (RGIA) at Shamshabad, Hyderabad.
RGIA recorded passenger traffic of 8.73 million in FY 2013-14, a growth
of 4% over FY 2012-13. International traffic grew by 14% as compared to
FY 2012-13, while the domestic traffic grew by 1%.
The growth in international traffic was largely due to capacity
increase i.e. nclusion of new airlines and increase in frequency of
existing routes.
Cargo handled in FY 2013-14 was 90,234 MT which registered a growth of
7% over FY 2012-13. The domestic cargo grew by 11% and international
cargo grew by 5% as compared to FY 2012-13.
On domestic front, however the operations of Jet airways have come
down, while Indigo and Spicejet added their capacities and routes and
Air Costa started its operations from Hyderabad.
As per the AERA Aeronautical tariff order No. 38 issued on February 24,
2014, in respect of the control period from April 1, 2011 to March 31,
2016, there will be no Passenger Service Fee (Facilitation component)
for embarking passengers and the same will be considered as part of
User Development Fee (UDF). Further, UDF for the period from April 1,
2014 to March 31, 2016 has been determined to be Rs. Nil. This will have
significant mpact on the profitability and cash flows during the
mentioned period. GHIAL has initiated legal recourse challenging the
aforesaid AERA order and had also initiated certain steps towards
strategic cash management. Further, with the expected UDF commencing in
the next tariff cycle, the financial position is expected to improve
thereafter.
The Company continued its two-pronged strategy, for overall improvement
in its business. The first focused on airlines that are the primary
customers called "Route Development Strategy" and the second one being
"Passenger Development Strategy". The primary objective of these
strategies are to make Hyderabad Airport as South and Central India''s
gateway thereby enabling airlines to have financially sustainable
operations from Hyderabad. As part of this strategy, the launch of
Spicejet - Tiger Airways interline was facilitated.
Also, the Company launched its cargo Air Freight Station (AFS) at
Nagpur to augment its cargo throughput from the catchment area.
The following awards and recognitions were received during the year:
- World No. 2 position in the ACI ASQ (Airport Service Quality) Survey
for the year 2013 in the 5-15 MPPA category;
- ASSOCHAM-CSR Excellence Award 2012-13;
- FICCI-CSR Award 2012-13;
- Prestigious "NATIONAL TOURISM AWARD 2012-13" under the Best Airport
Category for fourth consecutive year;
- CAPA Airport Marketing Award (for Airports handling up to 15 mppa) at
the 10th Annual CAPA Aviation Awards for Excellence;
1st Airport in the World to receive 5-Star Certification Award of the
British Safety Council''s Health and Safety Management System. GHIAL has
been awarded the prestigious ''Sword of Honour'', considered the ''Oscar
of the Safety World'' by the British Safety Council for its Safety
Management System and Safety Practices;
1st Airport in India Level 3 (Optimization) Accreditation by ACI on
Airport Carbon Emission.
Aerotropolis Development
Hyderabad and Delhi Airports and surrounding land are being developed
as an airport city or "Aerotropolis", with a mix of aeronautical and
non- aeronautical developments. As adjoining commercial areas to the
Airports, they are bound to encourage the business activity and have a
positive mpact on the economy. DIAL is developing Aerocity in the
locality of the Delhi Airport which may ultimately cover 250 acres of
land. Four hotels have commenced operations during the year.
GHIAL is developing India''s largest Airport City in the vicinity of
Hyderabad Airport with an objective of creating an ecosystem that will
generate benefits for the Airport as well as the regional economy and
facilitate in establishing the prominence of Hyderabad Airport in the
global arena. Master Plan for the entire Airport City has been
completed and the physical infrastructure activities have started. The
initial phase assets consisting of Aerospace SEZ, Retail, Business
School, Exhibition Centre etc. are in various stages of design and
development. During the year, lease agreement with new third party
tenants in the Aerospace Park - Turbo Jet Engines, SAS Applied Research
and Lab Materials and United Technologies Corporation India have been
singed. Apart from above, a store has been opened in the Airport City
by World''s leading sports retailer Decathlon during the year.
Aircraft - Maintenance, Repair and Overhaul (MRO)
The MRO facility is a part of Aero-SEZ of GMR Hyderabad Internationa
Airport. Titled MAS-GMR Aerospace Engineering (MGAE), it is a 50:50
joint venture of GHIAL and Malaysian Aerospace Engineering Sdn Bhd. The
facility is being operated by MAS-GMR Aero Technic Limited (MGAT) which
is a wholly owned subsidiary of MGAE.
MGAT has ultra-modern facilities for aircraft maintenance, painting,
avionics upgrades, interior refurbishments, aircraft modifications,
structural repairs and Line Maintenance. It can cater to various types
of narrow-body aircraft belonging to Airbus, Boeing, ATR and Bombardier
families.
During the year under review, the facility has provided Heavy
Maintenance services to 37 aircraft which includes C-checks on
B737-800, B737-900, A320, A321, ATR and Q400 aircraft for both Domestic
and Internationa customers. Additionally, Company has carried out
Engine Changes and Landing gear changes on various aircraft. Apart from
Heavy maintenance checks, your Company has performed seat retrofit on
34 A-320 aircraft.
During the Financial Year 2013-14 your Company is in advanced stage of
negotiation for closing Heavy Maintenance contracts with major Domestic
Airlines. Company has also opened Line Maintenance office at the
Airport for providing Line Maintenance support to Major International
carriers at Hyderabad. Further marketing efforts are being intensified
to secure more Heavy Checks and Line Maintenance works at Hyderabad and
at other Line Stations. The Company is also engaged in intensive
marketing to penetrate nto the neighboring countries market for
providing Heavy Maintenance checks to the Airlines belonging to these
countries.
Additionally, the facility has secured and delivered 2 Repossession
checks of A321 aircraft to an International Lessor and received
positive feedback for providing quality service. In addition, the
company has secured the contract to perform two B737-800 aircraft ''End
of Lease'' checks from Domestic airlines. This forms a strong case and
helps in securing more ''End of Lease'' checks from both Domestic and
International carriers.
Istanbul Sabiha Gokcen International Airport Limited (ISG)
ISG is a Joint Venture (JV) Consortium which operates, manages and
develops the Sabiha G?k?en Airport, which is the 2nd airport at
Istanbul. The JV Consortium consists of GMR Infrastructure Limited (GMR
Group ? 40%), Limak Holding (40%) and Malaysia Airports Holdings Berhad
(20%). The terminal developed by the consortium has a capacity to
handle up-to 25 million passenger per annum and has the rights to
operate the terminal buildings, multi-storey car park, cargo, aircraft
refueling operations, airport hotel and Commercial Important Person
(CIP) facilities in the airport.
ISGI recorded 18.9 million total passengers in calendar year 2013,
which corresponds to a 27% annual increase in total passenger traffic.
As part of the Asset Light ? Asset Right (ALAR) strategy, the GMR Group
divested its 40% stake in ISG and the hotel entity at Turkey Airport,
LGM under the terms of the definitive agreements signed, subsequent to
the exercise of Right of First Refusal by Malaysia Airports Holdings
Berhard (MAHB) under the existing shareholders agreement of ISG, on
December 23, 2013.
The Group received Rs. 1,740 Crore (Euro 209.00 Million) as culmination
of divestment of its 40% equity stake to MAHB in addition to reducing
the proportionate debt of Rs. 1,412 Crore (Euro 169.55 Million) carried
in the balance sheet.
GMR Male International Airport Private Limited (GMIAL)
Shortly after the Government of Maldives repudiated the concession
agreement for Maldives'' Ibrahim Nasir International Airport, GMR Group
(GMR) and Government of Maldives (GoM) commenced arbitration
proceedings.
In order to expedite the progress of the arbitration, both GMR and GoM
have agreed to bifurcate the arbitration in 2 phases ? first phase will
focus on questions of liability and what forms of damages/compensation
are recoverable by GMR while the second phase will be to quantify the
amount so recoverable.
The hearings of phase I were concluded in April 2014 and the outcome of
the same was announced in June 2014 in GMR''s favour. The Tribunal
summarily rejected all the arguments made by the GoM and declared its
ruling that the unilateral termination of the concession agreement by
GoM was illegal and repudiatory.
Broadly, the Tribunal declared that the concession agreement was valid
and binding and was not void for any mistake of law or discharged by
frustration of bargain or administration, the GoM and Maldives Airport
Company Limited are jointly and severally liable for damages to GMIAL
for loss caused by wrongful repudiation of the agreement and that the
quantification of the damages and the interest thereon will be
determined in the next stage of arbitration by the same tribunal.
GMR Aviation Private Limited
GMR Aviation Private Limited operates and owns one of the youngest
fleets in the country and addresses the growing need for charter
services in the country. The operations are managed by professionals
with robust processes and systems to ensure highest levels of
efficiency and safety. As a part of Business Plan, the company sold one
aircraft and one helicopter during the FY. The company also sold Falcon
2000S delivered by Dassault Aviation, France during the year. At the
end of FY, the company has one Falcon aircraft, one Hawker aircraft and
one helicopter in its fleet.
CEBU
During April, 2014, the Group as part of the GMR Megawide Consortium
signed the concession agreement with Department of Transportation and
Communications, Republic of Philippines and Mactan Cebu International
Airport Authority ("MCIAA") to plan, develop, construct, renovate,
operate, maintain and expand Mactan Cebu International Airport for a
period of 25 years. Before signing of the concession agreement, a
petition has been filed before the Supreme Court of the Republic of
Philippines, Manila seeking direction restraining MCIAA from issuing an
award or executing the concession agreement with the GMR Megawide
Consortium in relation to the Project. The Group has not yet received
any notice from the aforesaid Supreme Court of the Republic of
Philippines, Manila in this matter.
Energy Sector
The Energy Sector is operating around 2,501 MW of Coal, Gas, Liquid
fuel and Renewable power plants in India through Special Purpose
Vehicles (SPVs) and around 6,013 MW of power projects 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.
The current operating portfolio of energy sector comprises of:
Name of SPV Capacity Fuel
GMR Power Corporation Limited (GPCL) 200 MW LSHS
GMR Vemagiri Power Generation
Limited (GVPGL) 388 MW Natural Gas
GMR Energy Limited (GEL) 220 MW Natural Gas
EMCO Energy Limited (EMCO) 600 MW Coal
GMR Kamalanga Energy Limited
(GKEL)- Phase 1050 MW Coal
GMR Gujarat Solar Power Private Limited 25 MW Solar
GMR Renewable Energy Limited 2.1 MW Wind
GMR Power Infra Limited 1.25 MW Wind
The following are the major highlights of the Energy sector:
- Operational Highlights:
- TNEB PPA for 200 MW Diesel Power Plant at Chennai was extended for
another year till February 2015, which remains subject to approval from
the Tamil Nadu Electricity Regulatory Commission. Power supply under
the extended PPA has already commenced;
- Unit 2 (300 MW) at EMCO was commissioned in September 2013. Both the
units are now fully operational. EMCO also signed long term PPA with
TANGEDCO this year for 150 MW. 100% of the plant capacity is now tied
up via long term PPAs;
- 3x350 MW at GKEL has been fully commissioned. GKEL has a long term
PPA tie-up of upto 85 % of its generation capacity;
- Golden Energy Mines (GEMS) (GMR stake of 30%) is operational and our
coal trading team has been trading coal from GEMS to EMCO, GKEL and a
third party successfully.
Amongst the energy subsidiary companies, GMR Power Corporation Limited,
GMR Gujarat Solar Power Private Limited and GMR Renewable Energy
Limited made a profit of Rs. 93.84 Crore, Rs. 3.82 Crore and Rs. 0.09 Crore
respectively. GMR Energy Limited, GMR Vemagiri Power Generation
Limited, GMR Kamalanga Energy Limited, EMCO Energy Limited and GMR
Energy Trading Limited made a loss ofRs. 304.13 Crore, Rs. 58.86 Crore, Rs.
474.72 Crore, Rs. 532.57 Crore and Rs. 6.85 Crore respectively.
- Project-related Highlights:
- 89% of progress has been achieved in GMR Chhattisgarh Energy Limited
(GCEL) and commercial operation date (COD) of first unit is expected
this year.The 400 kv transmission line for evacuation to central grid
has been completed and charged;
- The 270 km long Maru Transmission project was commissioned in
October, 2013. The 96 km long Aravali Transmission project is nearing
its completion stage and is awaiting commencement of commercial
operations;
- 180 MW Bajoli Holi Hydro project achieved financial closure in April,
2013;
- Power Finance Corporation Limited has sanctioned debt for GMR''s 300
MW Badrinath Hydro Power Project in Uttaranchal. The financial closure
is expected to be completed shortly. Project mplementation agreement
has been signed with Government of Uttarakhand in May, 2013; The
Honorable Supreme Court of India, while hearing a civil appeal in the
matters of Alaknanda Hydro Power Company Limited, directed vide its
order dated May 7, 2014 that no further construction work shall be
undertaken by the 24 projects coming up on the Alaknanda and Bhagirathi
basins until further orders. The Company is confident of obtaining
requisite clearances;
- GMR Energy Limited signed a Joint Development Agreement with the
nternational Finance Corporation, to jointly develop the 600 MW Himtal
project on Upper Marsyangdi River in Nepal in December 2013;
- Techno-Economic Clearance for 225 MW Talong project (Arunacha
Pradesh) has been obtained from Central Electricity Authority (CEA) /
Central Water Commission (CWC).
Highways
GMR Highways Limited is one of the leading highways developers in India
with 7 operating highways assets totaling to 2977 lane Kms.
The FY 2013-14 has seen a subdued growth in the highway sector due to
various factors such as slowed economic situation, delay in clearances,
sand quarry and mining bans, power shortage, funding constraints, etc.
This has resulted in lower investment from private players in
infrastructure in general including roads and highways sector.
Highways sector operating subsidiary companies, GMR Tambaram Tindivanam
Expressways Limited, GMR Tuni Anakapalli Expressways Limited, and GMR
Pochanpalli Expressways Limited, made a profit of Rs. 15.52 Crore, Rs. 7.94
Crore, and Rs. 14.00 Crore respectively. GMR Ambala Chandigarh
Expressways Private Limited, GMR Hyderabad Vijayawada Expressways
Private Limited, GMR OSE Hungund Hospet Highways Private Limited and
GMR Chennai Outer Ring Road Private Limited made a loss of Rs. 29.69
Crore, Rs. 93.58 Crore, Rs. 24.51 Crore, and Rs. 17.12 Crore respectively.
During FY 2013-14, partial completion certificate for Chennai Outer
Ring Road Project was obtained. The project is expected to ease the
congestion of Chennai city substantially. The arbitration over Ghaggar
Bridge in Ambala? Chandigarh project was successfully concluded during
FY 2013-14. Arbitration process for loss of traffic under State
Support Agreement and Concession Agreement is in advanced stages. Works
for the third toll plaza in Hungund-Hospet Project were completed
during FY 2013-14 and commercial operations commenced during May 2014.
The Company issued notice of termination under the Concession Agreement
with NHAI on Kishangarh?Udaipur?Ahmedabad project in December 2012.
Subsequently,the Company has approached the Hon''ble High Court of Delhi
seeking an injunction against invocation of Performance Bank Guarantee
of Rs. 269.36 Crore provided by the Company to NHAI. Presently, the Bank
Guarantee has been kept alive by the Concessionaire and a revised
proposal has been submitted to NHAI.
During the current year, the Group divested 74% of its stake in GMR
Ulundurpet Expressways Private Limited. and completed its 74% stake
sale in GMR Jadcherla Expressways Limited.
Engineering Procurement and Construction (EPC) Division
As part of the EPC business, Consortiums led by your company, have won
construction package of rail line doubling between Jhansi and Bhimsen
stations in the State of Uttar Pradesh, three construction packages of
rail line doubling of Multi Modal Transport System (MMTS) ? Phase II
works on Secunderabad Division of South Central Railway in the State of
Andhra Pradesh (presently State of Telangana). There is a huge
potential to upgrade the Railway Infrastructure in the Country.
Urban Infrastructure
The Group is developing a 4300 acre multi product Special Investment
Region (SIR) at Krishnagiri, near Hosur in Tamilnadu and 10,000 acre
Port- based multi-product Special Investment Region at Kakinada, Andhra
Pradesh.
Krishnagiri Special Investment Region
GMR Krishnagiri Special Investment Region (GKSIR) at Hosur, Krishnagiri
district, Tamil Nadu is an upcoming project of the GMR Group.
The project site falls within the proposed Chennai ? Bangalore
Industrial Corridor and is located in proximity to Bangalore and
Chennai.
GKSIR will be a smart integrated industrial zone and this project would
cater to the needs of Manufacturing, Services and Commercial activities
and will also offer Residential and Social Infrastructure.
GKSIR will have dedicated:
- Electronic Manufacturing Zone (EMC)
- Automotive and Auto Ancillary Zone
- Precision Engineering Zone
- Aerospace and Defence Zone
GKSIR project offers infrastructure, including built up spaces for
factories, social infrastructure, quality and reliable power supply,
treated water supply with digital infrastructure.
Project progress
- GKSIR has obtained in-principle approval for establishing EMC from
Department of Electronics and Information Technology (DeitY). A
Detailed Project Report has been prepared and submitted to Government
of India and is awaiting for final approval for establishment of
greenfield EMC;
- Detailed Design and Engineering of the horizontal infrastructure is
in progress;
- Conceptual Master Plan for the GKSIR project has been completed and
Urban Design detailing for the units are in progress;
- GKSIR has obtained various approvals including extracting ground
water, establishing 33KV sub station, Consent for Establishment, NOCs
from Forest department, Health department, Taluk office and PWD.
Kakinada Special Investment Region
Master plan for the Phase-1 development area i.e. ~916 acres of land
has been completed and application for Consent for Operation (CFO) is
in various stages of approval.
The Company has also commenced construction of Rural BPO building and
operations are expected to start in the second quarter of current
financia year. Your company had already signed a Memorandum of
Understanding (MoU) with Rural Shores for setting up of BPO and two
''Letters of Intent'' with fisheries processing firms for setting up of
Marine Park. The Phase 1 development is expected to start operations in
current financial year and expected to generate an employment to 3000
people in the region.
On the Port front, Detailed Project Report has been rolled out and the
Company is in discussion with established port players in the world for
a possible investment in the business.
Risk Management
The Company is exposed to a number of risks that impact its businesses
in varying measures. It is imperative to identify and address these
risks and at the same time leverage opportunities for achieving the set
objectives.
The Company''s risk management framework is in line with the current
best practices and effectively addresses the emerging challenges in a
dynamic business environment.
Significant developments during the year include:
- Detailed risk assessment was carried out during the bidding stage of
various projects in Airports, Urban Infra and Highways sector with
ndependent views on critical business assumptions to facilitate nformed
decision making;
- A cross functional team was formed to work on the high value, high
risk contracts in each sector to identify and address contract related
risks and compliance areas in an appropriate manner in line with the
Contractual Risk Review Framework;
- A separate bid risk framework was developed for the EPC division
keeping in mind its nature of business being distinct from other
businesses of GMR Group;
- Annual Operating Plan (AOP) risk analysis was carried out as a pilot
in one of our Business Units, which will now be carried out on a
regular basis across the businesses;
- Revised Project Risk Management (PRM) Framework is being implemented
in the current projects of the Group;
- Detailed risk analysis for power trading business of the Group is
conducted;
- Risk Appetite Framework for the Group is being developed for approval
of the Management and the Board;
- Risk Management process is critically woven on the strategic planning
process with various risks identified to the strategic objectives of
all the businesses and initiatives defined to address them;
- Risk review of important policies impacting the Group such as foreign
exchange, treasury, insurance, etc. is taken up on regular basis.
The Enterprise Risk Management (ERM) team presents to the Management
and the Audit Committee of the Board of the Company 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 Management Discussion and Analysis.
Developments in Human Resources and Organisation Development
The Company has robust process of human resources development which is
described in detail in Management Discussion and Analysis section under
the heading "Developments in Human Resources and Organisation
Development at GMR Group".
Consolidated Financial Statements
The Ministry of Corporate Affairs (MCA) vide its General Circular
number 08/2014 dated 04.04.2014 has clarified that Financial
Statements, Auditors'' Report and Board''s Report in respect of Financial
Year that commenced earlier than April 01, 2014 shall be governed by
the relevant provisions / Schedules / Rules of the Companies Act, 1956
only. In view of the above clarification from the MCA, the Board''s
Report in respect of the Financia Year ended March 31, 2014 of the
Company has been prepared in accordance with the provisions of the
Companies Act, 1956.
Further, as per Section 212 of the Companies Act, 1956, the Company is
required to attach the Directors'' Report, Balance Sheet, statement of
Profit and Loss and other documents of its subsidiary companies to its
Annual Report. However, the Ministry of Corporate Affairs (MCA),
Government of India vide its General Circular No.2/2011 dated February
8, 2011 has provided an exemption to the companies from complying with
section 212, provided such companies publish the audited consolidated
financial statements in the Annual Report. Accordingly, the Annual
Report 2013-14 does not contain the reports and other statements of the
subsidiary companies. The annual audited accounts and related detailed
information of the subsidiary companies will be made available to the
investors of the Company upon request. These documents will also be
available for inspection during business hours at the registered office
of the Company.
The statement pursuant to the aforesaid circular of the MCA about
financial information of each subsidiary containing details of (a)
capital (b) reserves (c) total assets (d) total liabilities (e) details
of investment (except in case of investment in the subsidiaries) (f)
turnover (g) profit before taxation (h) provision for taxation (i)
profit after taxation (j) proposed dividend is provided as Annexure ''B''
to this report. However, the financial statements of GMR Corporate
Center Limited (GCCL) are not consolidated, since GCCL is a guarantee
company having no share capital and commercial operations.
As required by the Listing Agreement with the Stock Exchanges, the
audited consolidated financial statements of the Company and its
subsidiaries, jointly controlled entities and associates form part of
the Annual Report.
Changes in Share capital
During the year under review, the Authorized Share Capital of the
Company has increased from Rs. 750,00,00,000 divided into 750,00,00,000
(Seven Hundred Fifty Crore only) equity shares of Rs. 1/- (Rupee One
only) each to Rs. 1,950,00,00,000 divided into 750,00,00,000 (Seven
Hundred Fifty Crore only) equity shares of Rs. 1/- (Rupee One only) each,
60,00,000 (Sixty Lakhs only) Series A Compulsorily Convertible
Preference Shares (CCPS) of Rs. 1000/- (Rupees One Thousand only) each,
and 60,00,000 (Sixty Lakhs only) Series B CCPS of Rs. 1000/- (Rupees One
Thousand only) each.
Your Company has issued and allotted on March 26, 2014, 1,13,66,704
CCPS of face value of Rs. 1,000 each comprising of (a) 56,83,351 Series A
CCPS each fully paid up, carrying a coupon rate of 0.001% per annum and
having a term of 17 months from the date of allotment, and (b)
56,83,353 Series B CCPS each fully paid up, carrying a coupon rate of
0.001% p.a. and having a term of 18 months from the date of allotment,
to IDFC Limited, Dunearn Investments (Mauritius) Pte Limited, GKFF
Ventures, Premier Edu-Infra Solutions Private Limited and Skyron
Eco-Ventures Private Limited. The Series A CCPS and Series B CCPS shall
be converted into Equity Shares upon the expiry of their respective
terms in accordance with the provisions of Chapter VII of the
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (SEBI Regulations).
Qualified Institutions Placement (QIP):
Subsequent to the year end, your company successfully completed issue
and allotment of 46,88,17,097 equity shares of Rs. 1 each at a price of Rs.
31.50 per equity share, including a premium of Rs. 30.50 per equity
share, aggregating to Rs. 1,476.77 Crore to Qualified Institutional
Buyers (QIBs) as per Chapter VIII of SEBI Regulations, through the
Qualified Institutions Placement (QIP). Issue price is at a discount of
Rs. 1.64 per equity share to the floor price of Rs. 33.14 per equity share.
The QIP opened for subscription to QIBs on July 02, 2014 and closed on
July 08, 2014. The entire money amounting to Rs. 1,476.77 Crore was
received and allotment of shares was made on July 10, 2014. Consequent
to this allotment, the listed equity share capital has increased from Rs.
389.24 Crore to Rs. 436.12 Crore.
The total paid up capital of the Company after the aforesaid issue is Rs.
1,572.79 Crore comprising of Equity Share Capital of Rs. 436.12 Crore and
CCPS Capital of Rs. 1,136.67 Crore.
Directors
Nomination and Remuneration Committee of the Board of Directors of the
Company recommended the proposal to appoint Mr. S. Sandilya, Mr.
R.S.S.L.N. Bhaskarudu, Dr. Prakash G Apte, Mr .N. C. Sarabeswaran, Mr.
S. Rajagopal, Mr. V. Santhana Raman and Mr. C. R. Muralidharan as
Independent Directors of the Company for a period of two years.
Mr. O. Bangaru Raju and Mr. Srinivas Bommidala, Directors retire by
rotation and being eligible, offer themselves for re-appointment at the
Annual General Meeting. The Nomination and Remuneration Committee of
the Board of Directors of the Company recommended their re-appointment.
The Company has received requisite notices in writing pursuant to
Section 160 of the Companies Act, 2013 from a member along with
requisite deposits proposing the candidatures of Mr. S. Sandilya, Mr.
R.S.S.L.N. Bhaskarudu, Dr. Prakash G Apte, Mr .N. C. Sarabeswaran, Mr.
S. Rajagopal, Mr. V. Santhana Raman and Mr. C. R. Muralidharan for
appointment as Independent Directors of the Company at the ensuing
Annual General Meeting ofthe Company.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
The brief resume and details of Directors who are to be appointed/re-
appointed are furnished in the Notice for the Annual General Meeting.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
confirmed:
1. that in the preparation of the annual accounts for the year ended
March 31, 2014, the applicable Accounting Standards have been followed
and proper explanations were provided for material departures, if any;
2. that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at the end of the financial year and of
the profit of the Company for that period;
3. that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4. that the Directors have prepared the accounts for the financial
year ended March 31, 2014, on a going concern basis.
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. The company works towards continuous
improvement in governance practices and processes, in compliance with
the statutory requirements. Board governance upgrades are underway.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The requisite
Certificate from the Practicing Company Secretary confirming compliance
with the conditions of Corporate Governance as stipulated under the
aforesaid Clause 49 is attached to this Report. Also a detailed report
on Corporate Governance practices followed by the Company, in terms of
Clause 49 (VI) of the Listing Agreement with Stock Exchanges, is
provided separately in this Annual Report.
Secretarial Audit
As per SEBI requirement, Reconciliation of Share Capital Audit is being
carried out at specific periodicity by a Practicing Company Secretary.
The findings of the audit have been satisfactory. In addition,
Secretarial Audit was carried out voluntarily for ensuring transparent,
ethical and responsible governance processes and also proper compliance
mechanisms in the Company. M/s. V. Sreedharan & Associates, Company
Secretaries, conducted Secretarial Audit of the Company and a
Secretarial Audit Report for the financial year ended March 31, 2014,
is provided in this Annual Report.
Management Discussion and Analysis (MDA)
The MDA, forming part of this report, as required under Clause
49(IV)(F) of the Listing Agreement with the Stock Exchanges is attached
separately in this Annual Report.
Business Responsibility Report
SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, had
mandated inclusion of Business Responsibility Report as part of the
Annual Report for Top 100 listed entities based on market
capitalisation at BSE and NSE as on March 31, 2012. Accordingly, Report
on Business Responsibility is provided separately in this Annual
Report.
Auditors and Auditors'' Report
M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, the
statutory auditors of the Company, retire at the conclusion of the
ensuing Annual General Meeting of the Company. They have offered
themselves for reappointment as statutory auditors and the Company has
received letters from M/s. S.R. Batliboi & Associates LLP to the effect
that their re- appointment, if made, would be within the prescribed
limits under Section 141(3)(g) of the Companies Act, 2013 and that they
are not disqualified for re-appointment.
M/s S.R. Batliboi & Associates LLP have also confirmed by way of a
written consent and certificate as required under section 139(1) of the
Companies Act, 2013 that their appointment, if made, shall be in
accordance with the conditions prescribed in rule 4(1) of the Companies
(Audit and Auditors) Rules, 2014.
With reference to the qualification in the auditors'' report on the
standalone financial statements of the Company pertaining to the
dispute in GMR Mal? International Airport Private Limited (GMIAL),
auditors'' observation is included in Basis for Qualified Opinion in the
auditors'' report. Based on an internal assessment and a legal opinion
obtained by GMIAL, the management of the Company is confident of
proving that the concession agreement was not void ab initio and that
GMIAL would be entitled for compensation under the concession agreement
atleast to the extent of the carrying of the assets taken over by GoM /
MACL and the subsequent expenditure incurred by GMIAL as at March 31,
2014. Further, subsequent to the year end, the hearings of phase I were
concluded in April 2014 and the outcome of the same was announced in
June 2014 in GMR''s favour. The Tribunal summarily rejected all the
arguments made by the GoM and declared its ruling that the unilateral
termination of the concession agreement by GoM was illegal and
repudiatory. Quantification of the damages and the interest thereon
will be determined in the next stage of arbitration by the same
tribunal.
With reference to the qualification in the auditors'' report on the
standalone financial statements of the Company pertaining to
recognition on profit of sale of ISG and LGM, auditors'' observation is
included in Basis for Qualified Opinion in the auditors'' report. The
Management based on its internal assessment and a legal opinion is of
the view that all the "Conditions Precedent" were either fulfilled or
waived or agreed to be not applicable as at March 31, 2014, except for
the buyer to obtain approval from Bank Negara Malaysia (not a
"Condition Precedent") which was obtained on April 3, 2014 and
subsequently on receipt of the sale consideration, the shares were
transferred to the buyer on April 30, 2014. In view of the same, the
Company has recognized the profit on sale of ISG and LGM in the year
ended 31st March, 2014.
As regards to the auditors'' observation with respect to clause no. iv
in the annexure to auditors'' report on the standalone financial
statements of the Company on matters specified in Companies (Auditor''s
Report) Order, 2003, the Company continuously reviews the internal
control systems, identify weaknesses and further strengthens the
processes, wherever required.
As regards to the auditors'' observation with respect to clause no. ix
in the annexure to auditors'' report on the standalone financial
statements of the Company on matters specified in Companies (Auditor''s
Report) Order, 2003, Company ensures that statutory payments are made
on time and has mechanisms for satisfactory compliance of these
requirements. However, the processes will be further strengthened for
avoiding any minor delays.
As regards to the auditors'' observation with respect to clause no. xv
in the annexure to auditors'' report on the standalone financial
statements of the
Company on matters specified in Companies (Auditor''s Report) Order,
2003, corporate guarantee support is provided by the Company to its
subsidiaries and other group companies, based on requirements.
Commission is normally not charged on corporate guarantees issued by
the Company.
With reference to the qualification in the auditors'' report on
consolidated financial statements of the Company pertaining to the
capitalization of indirect expenditure and borrowing costs in GMR
Rajahmundry Energy Limited (GREL), auditors'' observation is included in
Basis for Qualified Opinion in the auditors'' report. GREL has
approached the MCA seeking clarification / relaxation on applicability
of provisions of AS-10 and AS-16 relating to the gas availability
situation. The management of the Group is confident of obtaining
necessary clarification / relaxation allowing such capitalization.
With reference to the qualification in the auditors'' report on
consolidated financial statements of the Company pertaining to the
capitalization of indirect expenditure towards project and borrowing
costs in GMR Kishangarh Udaipur Ahmedabad Expressways Limited,
auditors'' observation is included in Basis for Qualified Opinion in the
auditors'' report. The management of the Group has submitted the
proposal for the continuance of the project subject to certain
modifications in the financial and other terms in the Concession
Agreement and is confident of obtaining approval of these modifications
by NHAI and recovering the expenditure incurred.
With reference to the qualification in the auditors'' report on
consolidated financial statements of the Company pertaining to the
dispute in GMIAL, and recognition of profit on sale of the investment
in ISG and LGM, detailed management response is provided in earlier
paras.
Corporate Social Responsibility (CSR)
With a belief that corporates have a special and continuing
responsibility towards social development, GMR Group undertakes CSR
activities on a significant scale through GMR Varalakshmi Foundation
(GMRVF). The Vision of GMR Group''s CSR activities is to make
sustainable impact on the human development of under-served communities
through initiatives in Education, Health and Livelihoods. Towards such
inclusive growth, GMRVF works with the communities neighboring GMR
Group''s businesses for their economic and social development.
Currently, GMRVF is working in over 200 villages/ urban communities
across 23 locations. It also runs educational and healthcare
institutions, and vocational training centers.
Environmental Protection and Sustainability
Since inception, sustainability has remained at the core of our
business strategy. Besides economic performance, safe operations,
environment conservation and social well-being have always been at the
core of our philosophy of sustainable business. In anticipation of
upcoming regulations and requirements, the company has invested
substantially and allocated other resources to proactively adopt and
implement manufacturing / business processes to increase its adherence
to environmental standards and enhance its industry safety levels. At
GMR Group, the challenges due to the Company''s operations related to
EHS aspects of the business, employees and society are mapped and
mitigated through a series of systematic and disciplined sets of
policies and procedures.
The company continues to abide by regulations concerning the
environment by allocating substantial investments and resources on a
continuous basis to adopt and implement pollution control measures. Our
continual endeavor to go beyond compliance and conserve natural
resources helps to march towards attaining excellence in environmental
management and efficient and sustainable operations as well. As the
Company operates in an increasingly resource-constrained world, being
environmentally conscious and efficient are key to our operations. The
Company remains committed to our Corporate Environment, Health, Safety
and Quality (EHSQ) Policy to articulate, guide, and adopt an integrated
approach towards implementing EHSQ objectives. These established
systems certified by reputed certifying agencies have helped to monitor
and manage our operations systematically, safely and in environmental
friendly manner. When such practices become institutionalized, they
protect environment and reduce costs.
The Company understands the global thrusts for minimizing the effect of
developmental projects towards global warming. The Company has
developed various projects voluntarily and some of the Projects are
under development stage, which ultimately reduces GHG emissions into
the atmosphere and thus, minimizing the global warming effect. The
Company has evolved as Sustainability leader by registering 7 CDM
Projects with UNFCCC.
As a responsible corporate citizen, the Company is striving to meet the
expectations of neighbouring communities around our plants and other
locations through GMR Varalakshmi Foundation. The foundation works
closely with them and strives to impact the lives of millions of
farmers, youth, women and children through numerous programs.
Energy Sector
Energy Sector has continuously ventured to promote cleaner fuel
operations and renewable energy. The super critical technology power
plant is under development at Chhattisgarh. The 25 MW capacities Solar
Photo-Voltaic based power generation, and 2.1 MW and 1.25 MW wind
turbine generators in the state of Gujarat and Tamil Nadu respectively,
with the total capacity of the wind turbine generator being 3.35 MW are
now fully operational thereby underscoring the Company''s commitment
towards sustainability in terms of clean and renewable energy resource.
GMR Energy sector has initiated to align its energy business in
alignment with comprehensive "EHS Framework", adopting best
manufacturing practices, optimizing energy, natural resources &
technology, best available practices, go beyond compliance, etc.
All the operating units have all necessary statutory clearances in
place and are in compliance with environmental regulations. The Company
has adopted state of the art systems and measures to control emissions
and effluent in design stage itself. Hazardous wastes management and
disposal has been in accordance with Central Pollution Control Board
(CPCB) guidelines. Continuous Stack Emission Monitoring System (CEMS)
and continuous Ambient Air Quality Monitoring Systems (CAAQMS) at power
plants have been set for monitoring of vital pollution parameters on
real time basis. Also, each of the operating units has dedicated
Effluent treatment
Plant to treat waste water from the units and utilize or discharge in
accordance with Pollution Control Board Norms. All parameters like
stack emissions, ambient air quality, water quality, noise level etc
are maintained well within the stipulated norms. The monitoring reports
are submitted periodically to statutory authorities. Internal audits
and surveillance audits as per the requirements of ISO certifications
are conducted and any observation or non-conformance is dealt with
utmost importance. The system is managed by dedicated EHS team and
steered frequently at Apex level for quick actions.
Various employee engagement campaigns are conducted at plant by
celebrating world environment day, national safety week, national fire
awareness week, national cleanliness day, road safety awareness week,
energy conservation week, earth day, etc to create awareness and
generate ideas for implementation. During mass plantation drive,
employees, families, children and nearby villagers are involved. Dense
green belt development is under progress.
Systems and processes as per Global Reporting Initiative (GRI-G4) are
being implemented across all the power plants. It is initiated to
report sustainability efforts of Energy Sector for FY 13-14 through its
first ever Sustainability Report as per GRI-G4 guidelines. It would be
published and made available to relevant stakeholders in FY 15-16.
EMCO Energy Limited (EMCO) obtained the renewal of consent to operate
for Units -1 & 2 and it is valid up to 31st August 2014. In-principle
approval for Wild Life Conservation plan has been granted by Divisional
Forest Officer, Chandrapur, Maharashtra. Three CAAQMS stations and CEMS
at stacks have been installed. Real time environmental data
connectivity has been established with Maharashtra Pollution Control
Board''s web-server. Display board is installed at main gate to show
online CEMS and CAAQMS. Ground water quality monitoring is conducted on
quarterly basis. Implementation of Integrated Management System (IMS)
is under progress. First stage IMS audit was carried out by M/s BVCI.
Energy audit was conducted by M/s CII- Godrej GBC. Dust suppression
system is installed and commissioned and the treated effluent water is
being used for sprinkling. 9,11,320 cubic meters of cooling water is
recycled. 19000 numbers of saplings were planted over 20 acres during
FY 13-14. The plant premises have installed rain-water harvesting
structures for capturing the rain water through the well- connected
drainage network.
GMR Kamalanga Energy Limited (GKEL) has valid consent to operate and
Hazardous Waste Authorization for all three units. GKEL is certified
for all three management systems viz., ISO 9001, ISO 14001 and OHSAS
18001.
Construction of power plant is still in progress at GMR Chhattisgarh
Energy Limited. Application has been submitted to Chhattisgarh
Environment Conservation Board (CECB) for granting Consent to Operate
(CTO). Housekeeping drive was undertaken at Tilda Railway station for
about one hour between 9 AM to 10 AM by GMR employees. 300 saplings
were planted at Labour colony by GMR employees. Earth Day was
commemorated on 22nd April 2014 through planting of 450 saplings at
Labour colony. 100 saplings were supplied to Caramel Public School.
GMR Power Corporation Limited (GPCL), Chennai is recertified with OHSAS
18001, ISO 14001 and ISO 9001. Hazardous waste authorization is now
renewed till 2018 by Tamil Nadu State Pollution Control Board. GPCL
maintains the greenbelt inside the plant as per the statutory
requirement. Blow down water of around 32.6 KL was reused for cooling
system and other utilities in the FY 2013-14. Pollution Under Control
(PUC) certificate is updated in employees'' vehicles to control the
emission inside the plants.
GMR Vemagiri Power Generation Limited (GVPGL), Rajahmundry maintains
the certification OHSAS 18001, ISO 14001 and ISO 9001. GVPGL has
accrued about 95091 CERs from UNFCCC. Technical audit and Corporate EHS
audit was conducted by MAG and Corporate EHS team respectively. Energy
Conservation Initiatives of GVPGL and GMR Renewable Energy Ltd (GREL)
have led to a saving of 2884 Mwh amounting to monetary savings of Rs.
3.36 Crore. GREL Consent to Operate (CTO) is renewed till 31st August
2015. Greenbelt over 8.6 Acers is developed in GREL during FY 2013-14.
GMR Energy Limited (GEL), Kakinada has renewed the certifications of
OHSAS 18001, ISO 14001 and ISO 9001 up till Nov 2014. 500 saplings were
planted as a part of Green Belt Development. Rain water harvesting
System modification works and pipeline repair works were undertaken.
Energy Conservation Initiatives resulted in savings of 1082604 Kwh per
annum. GEL, Kakinada is now registered at Verified Carbon Standards
Board (VCS Board) for its contribution towards GHG''s reduction by using
cleaner fuel for power generation.
GVPGL, GREL, Alaknanda hydro project, Bajoli-Holi hydro project,
Gujarat Solar Power project and Wind power projects at Gujarat and
Tamil Nadu are registered as CDM Projects at UNFCCC.
Airport
