GMR INFRA Chairmans Speech

Dear Fellow Stakeholder,

It gives me great pleasure to welcome you all to the 20th Annual
General Meeting of your Company.

It''''s always a pleasure to speak with you to reflect on the performance
of your Company in the year that went by and share with you our
aspiration for the future as we complete shifting our registered office
to Mumbai and the corporate office to New Delhi.

I would like to place on record my sincere gratitude to you, our valued
shareholders for having given me this privilege. It has been a
momentous journey in shaping one of India''''s most admired Infrastructure
developer and operator group. Your unstinted support has made this
voyage deeply fulfilling.

Global Economy

One thing happening with amazing certainty is that the World is
increasingly becoming uncertain and volatile or to say so VUCA
(Volatility, Uncertainty, Complexity, Ambiguity) is at its peak. Growth
of the global economy has been revised down from 2.9% to 2.4%. China,
the World''''s economic engine, is growing at the slowest pace with its
GDP growth of last year falling to a quarter-century low of 6.9% and
has kept declining in 2016.

Within global policy circles, it is widely recognised that the China
needs a major structural change to its economy. Growth rates have
precipitously collapsed, massive surplus capacity exists in the heavy
iindustrial sector, non-performing loans are threatening to bankrupt
many provincial State owned firms and domestic financial markets are
dangerously volatile without repeated interventions from State

Besides all these serious challenges in the Chinese economy, Eurozone
has emerged as the biggest uncertainty for the world recently. The
outlook for the Eurozone has taken the largest hit, following Britain''''s
vote to leave the European Union (EU). Italy''''s banking system is
particularly weak and is now looking even more fragile. And crisis
threatens the Eurozone''''s governing of financial firms across the bloc
which could end up in an increasingly fragmented or balkanised system.
Balkanisation of EU finance comes at a time of financial fragility in
the Eurozone banking system, which has added to the financial pressure
on some of the largest European banks and the whole banking sector in
Italy. As a consequence, growth in the Eurozone is revised down from
1.7 to 1.3 per cent in 2017. At the same time investors fear central
banks don''''t have enough ammunition to tackle another financial crisis.

Japan has been another economic experiment. To save the Japanese
economy from stagnating, they need to reflate it and reform it.
However, Abenomics has fallen short of its targets and its overblown
rhetoric. Russia since last year has been into recession and its
economy has been contracting triggered by the low oil prices which
pummelled public finances, prompting spending cutbacks by the
government and forcing the central bank to allow the Ruble to trade
freely. There is a cry for structural reforms and measures to improve
the business climate to accelerate the Russian economy. Similarly,
Turkey is under severe economic stress. The main economic driver of the
country ''''Tourism'''' has taken a severe beating because of so much
uncertainty in the country.

Indian Economy

As of now, the only economy with some promise is India. India is the
only safe haven for the world to put its money in. Globally across the
market, trillions of dollars with near zero or negative yield and
interest rates are languishing. Eventually, we hope this will flow to
India through FDI or other ways of investments. Therefore, we should
see more and more investments coming to India across the sectors. The
platform for this has already been laid by the present Government and
its initiatives for reviving the economy keeping in mind the inclusive
growth. Over the past two years, the Government''''s economic agenda has
had three pillars: infrastructure, ease of doing business and
liberalisation through FDI.

The biggest positive is that policy focus has not been based on
populism, or on boosting cyclical growth through fiscal and monetary
stimuli, but rather on improving the trend growth by repairing the
system and initiating structural reforms wherever possible.

I am very confident that India is well on its growth trajectory and is
emerging as the most investor friendly country. Going ahead with
further improvements in ease of doing business, India will be seen as a
major investment destination for the global economy.


However, for India to continue its robust growth with the foreign
investments flowing in the Country, it has to aggressively work on
developing the world class Infrastructure. India needs Rs. 31 trillion
(USD 454.83 billion) to be spent on infrastructure development over the
next five years, with 70 per cent of funds needed for power, roads and
urban infrastructure segments. Hence, opportunities for your Company
are significant.

I am pleased to state that the Government of India is taking every
possible initiative to boost the infrastructure sector. Few of the
important initiatives taken are as follows:

- New hybrid-annuity model for allocating contracts under the Public
Private Partnership (PPP) projects in Highways, which will help
overcome the challenges faced by private developers in the
Build-Operate- Transfer (BOT) - Toll and BOT-Annuity models.

- Government has plans to award Highway projects worth Rs. 100,000
Crore in FY''''17.

- Budgetary allocation for Roads and Railways in the Union Budget 2016
has been increased to Rs. 218,000 Crore (USD 31.98 billion) with an aim
to boost the private investment cycle.

- Steps to weed out the problems faced by projects stuck under PPP mode
worth Rs. 4 lakh Crore (USD 58.69 billion) in the past few months.

- Launch of National Infrastructure Investment Fund (NIIF) with an
initial corpus of atleast Rs. 40,000 Crore (USD 5.87 billion).

- New Civil Aviation Policy (NCAP 2016) launched recently is extremely
pro development with focus on boosting regional connectivity. Indian
airport system which is likely to be third largest aviation market is
poised to handle 336 million domestic and 85 million international
passengers by 2020 (current level of 137 million domestic and 50
million international) with projected investment of USD 120 billion.

- New Tariff policy for Energy sector provides clarity on CERC being
tariff setting authority for multi-State sales. The policy also
promotes renewable generation sources and hydroelectric power
generation including pumped storage projects, efficiency in operations
and improvement in quality and reliability of power supply.

- Renewable policy is targeting 20,000 MW of solar power installed

- On the other policy decisions taken by the Government, E-Auction of
coal blocks and Regassified Liquified Natural Gas (RLNG) are
noteworthy. The future coal supply scenario is also expected to improve
over a period of time in view of the Union Government setting Coal
India Limited (CIL) an ambitious target of One Billion Tonne (BTs) by

- The Government has also come out with Ujwal Discom Assurance Yojana
(UDAY) scheme to address financial and operational issues of State
Distribution Companies. Gol has allowed coal swaps from inefficient
plants to efficient plants and from plants situated away from mines to
pithead plants to minimize cost of coal transportation.

Infrastructure Financing

Your Company is a pioneer in infrastructure development and operations,
with a proven record of success, it is well placed to leverage the
growing home economy by participating in India''''s infrastructure
development. However, for such ambitious infrastructure development of
the Country, cost effective and long term financing is the lifeline. I
am glad that the Government and RBI has been working to resolve
financing issues of the infrastructure sector by launching various
schemes and policies as follows:

- Strategic Debt Restructuring (SDR)

- Scheme for Sustainable Structuring of Stressed Assets (S4A)

- Investment Trust Guidelines by SEBI

- Masala Bonds

- Continuation of past schemes like JLR and 5/25

- Liberalized ECB approach

I believe that the Government and RBI are further formulating new
mechanisms to raise long term cheaper finance in order to fuel the
growth of infrastructure sector.

Group Performance

Your Company has done well in the last financial year in terms of
business growth, operational performance, finance raising, cost
optimization and institutionalizing processes and policies. The hard
work of our employees is very visible in the financial improvement of
the Company with EBITDA margin growing from 28% in FY''''15 to 39% in

I would like to mention some highlights of the each business sectors.

Airports Sector

Delhi International Airport Private Limited (DIAL)

Delhi Airport (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.

The non-aeronautical revenues grew by 19% over last year led by growth
in commercial non-aero sales. DIAL has initiated its second phase of
land monetization last year and plans to complete this year which is
one of the key value driver for the Airport.

DIAL has very successfully launched the dollar bond and raised USD 288
million at a very attractive coupon rate last year.

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

Some of the Awards and Accolades received in FY 2015-16:

- ICIA became No. 1 Airport as per Airports Council International
(ACI), Airport Service Quality (ASQ) ranking for 2015 in the 25 to 40
million passenger category, second year in a Row.

- ICI Airport was awarded 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 Award for second year in a row.

- ICIA won ''''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

GMR Hyderabad International Airport Limited (GHIAL)

GHIAL continued to record strong traffic growth in its 8th year of
operation. Passenger traffic touched 12.5 million, registering a growth
of 19% Y-o-Y Similarly, Cargo also registered impressive growth to
reach 113,000 MT, a growth of 10% Y-o-Y.

Adding another green milestone to CMR''''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.

Some of the Awards and Accolades received in FY 2015-16:

- World''''s 3rd Best Airport 2015 in ASQ Rating by ACI in 5 to 15 million
passenger category.

- Awarded the Best Regional Airport in India and Central Asia at the
SKYTRAX World Airport Awards, a web based survey voted directly by

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

- Won the prestigious CM Award for "Excellent Energy Efficient Unit"
for a second year in a row.

GMR Megawide Cebu Airport Corporation (GMCAC)

GMCAC has experienced international traffic grow by 18.5% whereas
domestic traffic has also grown at 9.6%. The construction of the new
terminal is well under its way and shall be completed as per the
timelines in year 2018.

Some of the 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

Energy Sector

- TANGEDCO PPA of your GWEL (Warora Power Plant) was fully
operationalized during the year.

- For GKEL (Kamalanga power plant), from December 2015 onwards,
supplies from ECL have been transferred to MCL leading to a cost
savings ofRs. 80 Crore per year.

- GKEL received favourable order from CERC on GRIDCO tariff with claim
of Rs. 234 Crore of arrears from FY''''14-16 and for Change in Law
petition against Haryana Discoms, with claim of Rs. 115 Crore of
arrears from FY''''14-16.

- GKEL successfully closed the flexible structuring of its existing
loans along with the new facility of Rs. 400 Crore against the
regulatory receivables.

- GCEL (Chhattisgarh power plant) both the units have been

- Talabira coal block started production from August 2015 onwards and
GCEL has been receiving coal for its operations.

- Gas based VPGL (Vemagiri power plant) and GREL (Rajamundry power
plant) commenced operations on roster basis beginning August 2015 and
November 2015 respectively, under E-RLNG scheme.

- Further, we have already completed the Strategic Debt Restructuring
(SDR) for GREL.

Transportation and Urban Infrastructure Sector

- Design, mobilization and execution of DFCC (Dedicated Freight
Corridor) Rs. 5080 Crore project is well under way.

- In June 2016, we also won 221 km DFCC project in partnership with

- Divested stakes in Ulunderpet Highway and Hungund Hospet Highway to
create liquidity.

- Kishangarh Udaipur Ahmedabad (KUA) project has been surrendered to

- In Kakinada Special Investment Region (SIR), the entire SEZ area
spread in over 5000 acres was announced as operational SEZ; Pals Plush
(a globaltoy manufacturer) commenced commercial operations: and the
Rural BPO in association with TATA Business Support Solutions was

- In Krishnagiri SIR, we are taking up development of Phase 1A of the
project spread over 275 acres.

Corporate Finance

Your Company has been able to successfully achieve variousfi nance
raisingand divestments underchallenging economic and market conditions,
following being a few:

- Raised USD 300 million (~ Rs. 2,000 Crore) through 60 years FCCB from
Kuwait Investment Authority.

- Induction of Strategic Partner in CMR Energy: GMR has signed an
agreement with Tenaga Nasional Berhad, Malaysia for investment of USD
300 million (~ Rs. 2,000 Crore) in CMR Energy Limited (CEL) for 30%
equity stake in CEL.

- Divestment of Road project: Stake divestment in Hungund Hospet
Highway reduced Rs. 1078 Crore of Debt at Croup level and created
liquidity ofRs. 85 Crore.

- SDR for Rajahmundry Cas Power Plant: Of the total outstanding debt
(including overdue interest) of Rs. 3780 Crore, debt to the extent of
Rs. 1414 Crore got converted into equity by which the consortium
lenders would have 55% shareholding and balance 45% would be held by

- Divestment of Transmission Assets: Successfully divested 74% stake in
Maru Transmission and 49% stake in Aravali Transmission. The total
value realizable from the transactions would be Rs. 220 Crore.

Corporate Services and Institution Building

Your Company is well aware of the extremely volatile and complex
socio-economic environment. To be ready for tomorrow''''s uncertainty we
need to be very agile, create liquidity and robust systems. Hence, we
have been focusing on the following:

Cash Conservativeness or Frugality - This year we completed shifting of
our registered office to Mumbai and headquarters to Delhi. This has
helped a great deal in consolidating the office spaces thus saving
costs directly and indirectly.

Also, at a Croup level we are creating the culture of Frugality,
branded as Anushista''''. We have launched Small Croup Activities as a
part of Anusishta'''' following cost consciousness, rationalisation and
bringing in "Frugality" as a part of our work culture. Over the last 6
months, we have undertaken 105 projects across the Croup involving
about 440 employees with a savings of about Rs. 16 Crore. Employees are
trained in various tools and techniques required to carry out these
projects with the help of internal resources.

Agility - Your Company believes that agility and adaptability goes hand
in hand. We decided to have an outsider''''s perspective and expert
advisory to keep checks and balances for any course correction if
required. We have formulated several advisory bodies as follows -
Croup Performance Advisory Council (CPAC), Information Technology
Advisory Council and HR Advisory Council. All these councils consist of
very eminent personalities from the corporate world bringing in fresh
outside perspective on present business models, technology, operations,
processes and policies. They continuously provide ideas and feedback to
help us to proactively adapt ourselves to the changing socio-economic

Institutional Framework - Your Company guided by its Vision of creating
an Institution in Perpetuity continues to focus on strengthening the
four pillars of the institutional framework viz., People, Process,
Technology and Covernance.

On the People side, we strive to create robust leadership pipeline and
young leadership talent programs. On the process side, we have a
dedicated Business Excellence team at the corporate level and several
business excellence teams at the asset level working on several process
improvement projects. Just to share some numbers, during last year, 60
Continuous Improvement Projects were completed with in-house audited
savings of more than Rs. 95 Crore. Another 95 projects are also at
various stages of completion.

On the technology side, we have been proactively learning and
implementing newer technologies whether it is Cloud, Data analytics or
cyber threats.

Valuesand Beliefs - Your Company''''s formation has been on a very strong
platform of seven values and beliefs. There are continuous training
and renewal sessions for senior management and employees at regular
intervals. The Board also keeps on re-visiting these values and

Your Company believes in increasing the human consciousness and
spirituality and pursues Inner Excellence. Several programs are
conducted for our senior leadership team. We also have developed one of
its kind ''''Inner Excellence'''' mobile app which is available to all the
employees of the Croup.

GMR Varalakshmi Foundation (GMRVF)

Your Company has always believed in inclusive growth and takes
responsibility of giving back to the society. CMR Varalakshmi
Foundation, an associate of your Company, works with extraordinary
commitment for the weaker sections of the society.

All the educational institutions under CMRVF have performed exceedingly
well during the last year. CMRIT (CMR Institute of Technology)
continues to earn good ranking among the engineering colleges in the
country including being among the top 65 engineering colleges in the
country and among the top five private engineering colleges in Andhra
Pradesh. CMRIT also received Outstanding Engineering Institute-South
Award, and Best College in Engineering in Andhra Pradesh Award.

CMR CARE Hospital continues to serve increasing number of people from
under-served areas with high quality care including specializations
like Neurosurgery and Nephrology. Diabetology department has also
started during this year.

GMRVF helped the Croup companies and several JVs to fulfil their CSR
obligations through grass root development initiatives around the CMR
businesses. Three new vocational training centres were inaugurated
this year, enabling GMRVF to contribute more to the national mission of
Skilling India through training over 5000 unemployed youth per year.
Several innovative courses such as Dry wall and False ceiling
technicians, Facility Management and Quality checker were introduced.
In the area of Health, Foundation has introduced more Mobile Medical
Units to serve under- served communities. As part of Swachh Bharat,
GMRVF built more community toilets, catering to about 3000 users per
day, and also contributed towards building of Individual Sanitary
facilities and school toilets.

As a recognition for its corporate social responsibility initiatives,
GMRVF has received the following awards:

- PHD Chamber of Commerce Award for Outstanding Contribution to Social
Welfare 2015-16

- Viswakarma Award for Social Impact and Development 2016 from
Construction Industry Development Council

Opportunities Ahead

The only way for growth of India is to have a World class
Infrastructure in place especially - Roads, Railways, Airports and
Energy. Your Company over the time has built strong competencies and
today is the leading player in all these sectors. Therefore, your
Company has ample opportunities ahead.

Airports Sector

- Your Company is keenly scouting for new airport opportunities in
Philippines and has qualified for the 5 regional airports in

- Actively participating in the bid for development of the Greenfield
Airport at Mopa, Goa as well as Navi Mumbai Airport. Nagpur Airport and
Bhogapuram (AP State) Airport are also on the horizon.

- In line with our Asset light strategy, your Company is actively
scouting for advisory services in the field of concession management
and IT in the Middle East and South East Asia.

Transportation and Urban Infrastructure

- Government has plans to award Highway projects worth Rs. 100,000
Crore in FY''''17. Most of these projects are expected to be awarded in
EPC and Hybrid Annuity Model (HAM) modes. We will bid for the right
projects in both EPC and HAM modes of bidding.

- Your Company has entered Railway business in FY''''14 by winning 2 RVNL
projects. We made a big leap into Railway projects in FY''''15 when we
were awarded 2 packages on the eastern DFCC in the State of Uttar
Pradesh worth Rs. 5080 Crore. Government has announced 3 new Dedicated
Freight Corridors during the current budget and we will actively pursue
these opportunities.

- Apart from freight corridors, we are also pursuing railway station
development projects which the Government has decided to take up on PPP

Though there are opportunities galore, we need to be very cautious of
the present volatile and uncertain environment and need to make very
cautious decisions which adds value to all the stakeholders. To
successfully sail through these VUCA times, your Company is trying to
foster a culture of innovation, be agile and adaptable to technological
changes, explore new business models, focus on collaboration and create
right talent to lead.

Your Company is privileged to be able to pursue a path less travelled
to create multiple drivers of growth supported by creating some of the
world class national assets and an abiding vision to put Country before
Corporation. It is our collective aspiration that your Company should
be one such world class infrastructure developer and operator of the


Before I conclude, I would like to place on record my deepest
appreciation of the tireless efforts of all my colleagues, past and
present who have travelled with me in this journey, lending their
shoulder to build this great organization. I draw solace that with such
a world class team of professionals at the group at all levels, our
shared aspiration is surely within reach. Here, I would like to express
my special gratitude to all the employees who have shifted their
locations from Bengaluru to New Delhi, Mumbai and Hyderabad. I am aware
that living all the years at one place and that too in a city like
Bengaluru, it is not easy to shift along with families. I am really
thankful for their cooperation and support.

I would also like to thank the Members of the Group Performance
Advisory Committee for their contribution and unwavering support over
the years. I extend my sincere gratitude to the Members of the Board
for the richness of their counsel, encouragement, due-diligence in
supervision and commitment to the Values and Visions of the GMR Group.
And finally, a special word of thanks to you, our valued shareholders,
for your unstinted support and encouragement. I know team GMR can
continue to look to you for your goodwill in the years ahead.

Thank You

G M Rao

Group Chairman, GMR Group

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

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