The Board of Directors present the 4th Annual Report together with the audited financial statements of the Company for the financial year (FY) ended March 31, 2023.
Your Company, GMR Power and Urban Infra Limited ("GPUIL"), is a leading global infrastructure conglomerate with interest in Energy, Roads and Urban Infrastructure business sectors in India.
GPUIL's EPC business is constructing few sections of the prestigious Eastern Dedicated Freight Corridor project of DFCCI (Dedicated Freight Corridor Corporation of India Limited).
India's Energy Sector is undergoing a paradigm shift with a consequent shift in the opportunity landscape. Existing coal-based power plants retain their economic value and possibly will have a value uptick as fresh investments in coal-based power plants would be very low; investments opportunities in clean and green energy, storage based solutions as also selective opportunities in power distribution and adjacent areas would be significant. Based on policy incentives in place along with cheap solar power, India is potentially developing as a major hub for green hydrogen production and exports.
GPUIL's energy business has operating capacity of around 3,015 MWs of Coal, Gas, Hydro including Renewable power plants in India and around 900 MWs of power projects are under various stages of development, besides a pipeline of other projects in FY 2022-23. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements (PPA).
The Transportation and Urban Infrastructure division of the Group has four operating highway assets spanning over 1460 lane kilometers. The Group is also developing multi-focus Special Investment Regions in India.
The Group is also actively working on various initiatives on ESG front. Performance highlights - FY 2022-23
Performance Highlights of your Company on consolidated basis for the FY 2022-23:
• GMR Smart Electricity Distribution Private Limited (Formerly GMR Mining & Energy Private Limited ("GSEDPL"), a subsidiary of the Company had received Letter of Intent ('LOI') from Purvanchal Vidyut Vitran Nigam Limited and Dakshinanchal Vidyut Vitran Nigam Limited, to implement smart metering project in the Purvanchal (Varanasi, Azamgarh zone and Prayagraj, Mirzapur zone) and Dakshinanchal (Agra and Aligarh zone) area of Uttar Pradesh. GSEDPL will install, integrate and maintain 75.69 lakh smart meters in the given area. The LOI has been issued in conclusion of competitive bidding process followed by UP
Discoms. The Group participated in the e-tender and emerged as a winner. The implementation and operations of the project will span over a period of 10 years. This Advanced Metering Infrastructure (AMI) Project shall include Supply, Installation, Integration, Commissioning and Operation & Maintenance of smart meters on DBFOOT basis backed by state-of-the-art technology and software solutions for end-to-end automated system management. The project will be executed under Revamped Distribution Sector Scheme (RDSS).
• Progress on regulatory dues in energy assets - the Hon'ble Supreme Court dismissed challenges by State Discoms (DNH, MSEDCL and Bihar) against Appellate Tribunal orders in favour of GMR energy entities paving way for realization of substantial regulatory dues.
• Significant Progress in Highway Projects Arbitration - Hon'ble Supreme Court has limited the SLP (filed by GoTN) to the extent of Pre-award claim awarded by Madras the Hon'ble High Court in case of GMR Chennai Outer Ring Road (GCORR), and rest of the award pronounced by Tribunal and Madras the Hon'ble High Court has attained finality. The Group has received claim amount of ' 5.1 bn in March, 2023.
• In arbitration case of GMR Hyderabad Vijaywada Expressway Private Limited (GHVEPL), Sole Arbitrator has released report on the claim quantification under Change-in-Law and awarded gross claim of ' 16.72 bn. Report submitted by Sole Arbitrator was taken on record and the matter is in progress before the Hon'ble Delhi High Court.
• The Group has received extension in concession period of 429 days along with claim of ' 87.00 Mn on account of Farmer's Strike Force Majeure event occurred during October 12, 2020 to December 14, 2021 in GMR Ambala Chandigarh Expressway (GACE).
• In the case of GMR Pochanpalli Expressways Limited (GPEL), the Hon'ble Delhi High Court (HC) upheld the interpretation of the Company on frequency of Major Maintenance. Order is under challenge by NHAI in the Division Bench of the Hon'ble Delhi High Court. Arguments are under progress.
• The Group continue to grow the EPC order book by participating in Railway EPC and PPP Projects & Multi Modal Logistics parks bids through PPP.
• Krishnagiri Special Investment Region - 161 acres under discussion for sale to an agency of Tamil Nadu Government. Next phase of development being planned for ~210 acres under Joint Venture with Tamil Nadu Industrial Development Corporation, a government agency in the state of Tamil Nadu. Further, discussion with various other parties for the sale of land is underway.
• Power demand coupled with improved coal supply resulted in an improved operating performance in ther energy business. GWEL achieved PLF of 82% in FY 2022-23 as against 66% in FY 2021-22.
• GMR Bajoli Holi Hydropower Limited (GBHHPL) was commissioned on March 28, 2022 and achieved PLF of 27% FY 2022-23.
• GMR Kamalanga Energy Limited (GKEL) achieved PLF of 77% in FY 2022-23 as against 82% in FY 2021-22.
• The Group has received certain favourable orders on various ongoing matters in energy, highway and DFCC for compensation for Change in Law and late payment which involve significant value of claims.
Strategy and way forward - Maximizing value of existing assets &
Building a Top Tier tech enabled Clean Energy business. Below are 3
Pillars of our strategy going forward:
• Enhance Value of existing businesses - aim for higher utilization of existing assets & efficiency improvement measures, tie-up open capacities through innovative PPA models including RTC., operationalize gas assets.
• Create Value in Adjacent Areas- Technology oriented Asset Light opportunities, Scale power trading business, differentiated service offerings using new-age technology solutions.
• Target selectively opportunities in clean and green space as also selectively in distribution and new emerging segments like e-mobility and forge partnerships for growth.
Financial results - FY 2022-23 a) Consolidated financial results
The following table sets forth information with respect to the consolidated statement of profit and loss of the Company for FY 2022-23:
|
(Rs. in Crore)
|
|
Particulars
|
March 31,2023
|
March 31, 2022
|
|
Continuing operations
|
|
|
|
Income
|
|
|
|
Revenue from operations (including other operating revenue)
|
5,524.69
|
4,101.81
|
|
Other income
|
367.62
|
179.89
|
|
Total Income
|
5,892.31
|
4,281.70
|
|
Expenses
|
|
|
|
Revenue share paid / payable to concessionaire grantors
|
191.51
|
151.61
|
|
Operating and other administrative expenditure
|
4,940.38
|
3,454.71
|
|
Depreciation and amortization expenses
|
151.39
|
128.16
|
|
Finance costs
|
1,350.25
|
1,354.49
|
|
Total expenses
|
6,633.53
|
5,088.97
|
|
Loss before share of profit of investments accounted for using equity method, exceptional items and tax from continuing operations
|
(741.22)
|
(807.27)
|
|
Share of profit of investments accounted for using equity method
|
741.47
|
246.17
|
|
Profit /(loss) before exceptional items and tax from continuing operations
|
0.25
|
(561.10)
|
|
Exceptional items
|
1,231.94
|
15.09
|
|
Profit/ (loss) before tax from continuing operations
|
1,232.19
|
(546.01)
|
|
Tax expenses
|
92.74
|
105.53
|
|
Profit/ (loss) after tax from continuing operations (i)
|
1,139.45
|
(651.54)
|
|
EBITDA from continuing operations
(Revenue from operations - Revenue share - operating and other admin expenses)
|
392.80
|
495.49
|
|
Discontinued operations
|
|
|
|
Loss from discontinued operations before tax expenses
|
(0.21)
|
(0.03)
|
|
Tax expenses
|
-
|
-
|
|
Loss after tax from discontinued operations (ii)
|
(0.21)
|
(0.03)
|
|
Total Profit/ (loss) after tax for the year (A) (i ii)
|
1,139.24
|
(651.57)
|
|
(? in crore)
|
|
Particulars
|
March 31,2023
|
March 31, 2022
|
|
Other comprehensive income
|
|
|
|
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
|
|
|
|
Exchange differences on translation of financial statements of foreign operations
|
180.94
|
5.63
|
|
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
|
|
|
|
Re-measurement loss on defined benefit plans (Net of taxes)
|
(0.55)
|
(0.01)
|
|
Other comprehensive income for the year, net of tax (B)
|
180.39
|
5.62
|
|
Total comprehensive income for the year, net of tax (A B)
|
1,319.63
|
(645.95)
|
|
Profit/ (loss) for the year attributable to
|
1,139.24
|
(651.57)
|
|
a) Equity holders of the parent
|
1,182.79
|
(647.54)
|
|
b) Non-controlling interests
|
(43.55)
|
(4.03)
|
|
Total comprehensive income attributable to
|
1,319.63
|
(645.95)
|
|
a) Equity holders of the parent
|
1,352.00
|
(643.59)
|
|
b) Non-controlling interests
|
(32.37)
|
(2.36)
|
|
Earnings per equity share (?) from continuing operations
|
19.60
|
(10.73)
|
|
Earnings per equity share (?) from discontinued operations
|
(0.00)
|
(0.00)
|
|
Earnings per equity share (?) from continuing and discontinued operations
|
19.60
|
(10.73)
|
The total income for FY 2022-23 is ' 5,892.31 crore as against ' 4,281.70 crore for the FY 2021-22, registering an increase of 37.62%, primarily due to increase in revenue from coal trading, electrical energy in energy sector, higher toll and annuity income in road sector and increase in management and consultancy income.
The revenue from power sector increased by 59.68% from ' 2,175.06 crore in FY 2021-22 to ' 3,473.16 crore in FY 2022-23 primarily due to increased operations in coal trading and electrical energy.
The revenue from road segment has increased by 23.14 % from ' 531.94 crore in FY 2021-22 to ' 655.04 crore in FY 2022-23 mainly due to increase in toll revenue.
EPC revenue decreased by 8.17% from ' 1,179.05 crore in FY 2021-22 to ' 1,082.68 crore in FY 2022-23.
Income from other sector includes management services income,
investment income and operating income of aviation businesses. Income from other sector increased from ' 338.54 crore in FY 2021-22 to ' 433.71 crore in FY 2022-23.
Consolidated Revenues do not include the revenues of entities which were assessed as Joint Ventures and Associates under Ind AS, including GMR Energy Limited (GEL), GMR Kamalanga Energy Limited (GKEL) and GMR Warora Energy Limited (GWEL).
The increase in other operating and administrative expenses is mainly due to purchase of traded goods, sub-contracting expenses, employee benefits expenses and other expenses with corresponding increase in revenue in FY 2022-23. There is marginal decrease in finance cost on account of repayment of borrowings to banks and financial institutions in FY 2022-23.
Exceptional items comprise of the gain on disposal of investment in overseas associate and claim received during the year ended March 31, 2023.
b) Standalone financial results
The following table sets forth information with respect to the standalone statement of profit and loss of the Company for FY 2022-23:
|
(? in crore)
|
|
Particulars
|
March 31,2023
|
March 31, 2022
|
|
Revenue from operations
|
1,408.78
|
1,567.90
|
|
Operating and administrative expenditure
|
(1,089.60)
|
(1,093.77)
|
|
Other income
|
31.97
|
3.74
|
|
Finance costs
|
(551.22)
|
(623.41)
|
|
Depreciation and amortisation expense
|
(16.03)
|
(18.87)
|
|
Loss before exceptional items and tax
|
(216.10)
|
(164.41)
|
|
Exceptional items
|
(66.76)
|
115.73
|
|
Loss before tax
|
(282.86)
|
(48.68)
|
Exceptional items comprise of reversal / creation of provision for impairment in carrying value of Investments and loans / advances / other receivables carried at amortised cost.
There are no material changes or commitments except those already disclosed in this report, affecting the financial position of the company which have occurred between the end of the FY 2022-23 and the date of this report.
Dividend
Your directors have not recommended any dividend on equity shares for the FY 2022-23.
|
(? in crore)
|
|
Particulars
|
March 31,2023
|
March 31, 2022
|
|
Tax expenses/(income)
|
-
|
-
|
|
Loss for the year
|
(282.86)
|
(48.68)
|
|
Net surplus in the statement of profit and loss - Balance as per last financial statements
|
160.21
|
209.02
|
|
Transfer from fair valuation through other comprehensive income (FVTOCI) reserve
|
1,067.20
|
-
|
|
Re-measurement gains on defined benefit plans (net of taxes)
|
(0.79)
|
(0.13)
|
|
Surplus available for appropriation
|
943.76
|
160.21
|
|
Appropriations
|
-
|
-
|
|
Net Surplus in the statement of profit or loss
|
943.76
|
160.21
|
|
Earnings per equity share (?) - Basic and diluted (per equity share of Re. 5 each)
|
(4.69)
|
(0.81)
|
During the year ended March 31, 2023, the revenue from EPC segment has decreased by 15.15% from ' 1,179.05 crore (FY 2021-22) to ' 1,000.47 crore (FY 2022-23), which was mainly because ongoing DFCC (Railways) project is nearing completion. Other operating income mainly includes interest income on inter-corporate loans given to group companies and income from management and other services. There is no significant movement in other operating income.
There is no significant movement in operating and administrative cost.
Appropriation to Reserves
The net movement in the major reserves of the Company on standalone basis for FY 2022-23 and the previous year is as follows:
|
(? in crore)
|
|
Particulars
|
March 31,2023
|
March 31, 2022
|
|
Equity component of related party loan
|
14.73
|
243.95
|
|
Securities premium account
|
10,010.98
|
10,010.98
|
|
Surplus in statement of profit and loss
|
943.76
|
160.21
|
|
Capital Reserve
|
(301.80)
|
(301.80)
|
|
Foreign currency monetary translation reserve
|
(371.86)
|
(222.31)
|
|
Fair valuation through other comprehensive income ('FVTOCI') reserve
|
(10,194.34)
|
(8,769.48)
|
|
Total
|
101.47
|
1,121.55
|
Management Discussion and Analysis Report (MDA)
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Management's Discussion and Analysis is set out in this Annual Report.
State of the Affairs of the Company and its Subsidiaries
The brief overview of the developments of the company and each of the major subsidiaries' business is presented below. Further, MDA, forming part of this Report, also brings out review of the business operations of major subsidiaries and jointly controlled entities.
Energy Sector
Energy Sector companies had operating capacity of around 3,015
MWs of Coal, Gas, Hydro including Renewable power plants in India and around 900 MWs of power projects are under various stages of development, besides a pipeline of other projects in FY 2022-23. The Energy Sector has a diversified portfolio of thermal and hydro projects with a mix of merchant and long term Power Purchase Agreements (PPA).
FY 2022-23 continued to be a dynamic year for the power sector in India. Businesses and people grew accustomed to living in a pandemic hit world. As a result, global as well as Indian economy witnessed an impressive economic recovery resulting in a huge surge in power demand. This recovery, coupled with Russia-Ukraine war, created a gap in the coal supply-demand scenario, thereby resulting in a significant surge in global coal prices. In view of this, Indian government had initially not allowed coal imports resulting in huge
shortage of coal in India. However, following rise in summer demand, government has subsequently asked power producers to import coal to maintain adequate plant level coal stocks. These measures, along with increase in domestic coal production, have resulted in easing of coal situation in India.
Given above background, our energy assets have also performed well. Following are the major highlights of our Energy Sector assets:
A. Operational Assets:I. Generation:1. GMR Warora Energy Limited (GWEL) - 600 MW:
• GWEL, subsidiary of GMR Energy Limited, operates a 600 MW (2x300) coal fired power plant at Warora, Maharashtra.
• Currently 90% of power off take capacity is tied up under long/medium term PPA's with Maharashtra through Maharashtra State Electricity Distribution Company Ltd. (MSEDCL), Tamil Nadu through Tamil Nadu Generation and Distribution Corporation (TANGEDCO) and Gujarat through Gujrat Urja Vikash Nigam Limited (GUVNL).
• Balance 50 MW untied capacity is sold in open market through Indian Energy Exchange (IEX).
• Plant has a Fuel Supply Agreement (FSA) of 2.36 Million Tonnes per annum, 1.3 Million tonnes with South Eastern Coalfields Limited (SECL) and 1.06 Million tonnes with Western Coalfields Limited (WCL) respectively.
• Capital Overhauling of Unit-2 and C Type maintenance of Unit-1 had improved the reliability of machine, significant improvement of key performing indicators like Auxiliary Power Consumption, Station Heat Rate, etc.
• During the year, the Plant has achieved availability of 89.4% and Plant Load Factor (PLF) of 82.2%, highest ever since commissioning of the plant.
• PPA compliance for MSEDCL is 87.1%, TANGEDCO is 87.1 and GUVNL is 87.2%
• Plant achieved PPA power sales of above 87%.
• Ash Utilization of 124% was achieved by tying with nearby Cement Industries, NHAI for Fly Ash and various Brick Manufacturers for Bottom Ash.
• Plant was awarded with many prestigious awards during the year, some of them are as below:
o M/s National Safety Council of India conferred India's topmost recognition "Safety shield". GWEL is the first Indian company to bag this
award.
o Safety Council Gold award - "Sarva Shresta Suraksha Puraskar" 2021 from M/s National Safety Council of India for achieving longest accident free man-days in the country.
o National award for excellence in Energy management from CII' for fifth consecutive year. For third straight year emerged as National Energy Leader.
• During the Year, the plant has received following Certifications:
o Bagged "Utkristh" rating (>95% score) in 5S assessment carried by M/s National productivity council .
o Successfully completed Recertification Audit of IMS (ISO-9001 -201 5; ISO 14001-2015; ISO 45001-2018), Energy Management System (EnMS) (ISO 50001:2018), Water efficiency Management System (WeMS) (ISO 46001:2019) without any non-conformities.
o Completed Assessment of GHG emissions for FY 2021-22 as per ISO 14064 standard.
o GWEL is empanelled as ESCO by Bureau of Energy efficiency. Achieved grade -04 rating.
2. GMR Kamalanga Energy Limited (GKEL) - 1,050 MW:
• GKEL, subsidiary of GMR Energy Limited, operates 1,050 MW (3x350) coal fired power plant at Kamalanga Village, Odisha.
• 90% of the capacity is tied-up under long/medium term PPAs with Haryana through PTC India Limited, Odisha through GRIDCO Limited, Bihar through Bihar State Power Holding Company Limited and Tamil Nadu through PTC India Limited.
• Power supply to Tamil Nadu commenced from December 15, 2022 and coal required was tied up with Mahanadi Coalfields Limited (MCL) under Shakti B III.
• GKEL has Fuel Supply Agreement (FSA) for 2.14 MTPA firm linkage from MCL. GKEL secured another 1.5 MTPA long-term FSA under SHAKTI linkage.
• GKEL met 80.4% compliance for Haryana, 89.8% for GRIDCO PPAs, 84.2% for Bihar PPA and 97.3% for TANGEDCO PPA.
• During the year, the Plant has achieved availability of 89.89% and Plant Load Factor (PLF) of 76.9%.
• 113.4% Ash Utilization was achieved by tying with NHAI for Fly Ash, Cement Manufacturers and various
Brick Manufacturers. GKEL achieved a milestone of dispatching 200 fly ash rakes to various avenues like cement, brick industries and National Highway projects and became 1st plant in Odisha in terms of ash transportation by rail mode.
• The plant surpassed its previous performance record on various parameters,
o Unit #3 Achieved 16 days continuous operation at PLF > 100% from April 22, 2022 to May 07, 2022 since COD.
o All 3 units operated continuously for more than 100 days.
• Plant was awarded with many prestigious awards during the year, some of them are as below:
o GKEL recertified under "UTKRISHT" category in recertification audit for 5S with a score of 97.02%.
o GKEL certified as Corporate Social Responsibility (IS0-26000:2010) organization by BVI.
o Won CII national awards continuously 3 years in 3 categories viz "National Energy Leader 2022" , "Excellence in Energy Management 2022" and the "Most Innovative Project 2022" award.
o GKEL is certified with ISO 55001:2013 for Asset Management System by BVI.
o GKEL awarded with CSR Excellence award from Odisha CSR Forum in the category of CSR Best Practices.
o GKEL is certified for ISO Corporate Social Responsibility (ISO-26000:2010).
3. GMR Bajoli Holi Hydropower Private Limited (GBHHPL)- 180 MW:
• GBHHPL, a subsidiary of GEL, located on the river Ravi at Chamba District, Himachal Pradesh, has commissioned the 180 MW Bajoli Holi Hydro Electric Plant (HEP) on March 28, 2022.
• GBHHPL has started supplying power to both the off takers under long term PPA i.e. Delhi International Airport Limited (DIAL) and Uttar Pradesh Power Corporation Limited (UPPCL).
• Thus, almost 100% capacity is now tied up as per the above-mentioned PPAs. Any surplus power generation is available for sale on merchant that is being availed based on market opportunity.
• 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.
• Power Evacuation: With construction of 40 km 440 kV Transmission line, the original envisaged route to transmit the power from Bajoli Holi Plant became operational.
4. GMR Vemagiri Power Generation Limited (GVPGL) - 388 MW:
GVPGL, a wholly owned subsidiary of GEL, operates a 388 MW natural gas-fired combined cycle power plant at Rajahmundry, Andhra Pradesh.
• GVPGL did not operate in the last financial year due to scarcity of gas.
• Efforts and discussions with government are on for arriving at possible options to operate the plant
• In addition, legal case is being pursued for allowing Deep Water Gas under the existing PPA.
5. GMR Rajahmundry Energy Limited (GREL) - 768 MW:
GREL is a 768 MW (2 x 384 MW) combined cycle gas based power project at Rajahmundry, Andhra Pradesh.
• GREL already executed a resolution plan with the lenders for the outstanding debt of ' 2,353 Crore.
• Efforts and discussions with government are on for arriving at possible options to operate the plant.
6. GMR Gujarat Solar Power Limited (GGSPL). Charanka Village. Gujarat:
• GGSPL, a wholly owned subsidiary of GEL, operates a 25 MW Solar power plant at Charanka village, Patan district, Gujarat.
• GGSPL had entered into 25 year PPA with Gujarat Urja Vikas Nigam Limited for the supply of entire power generation.
• GGSPL attained commercial operation on March 04, 2012.
• M/s. Param Renewable Energy Pvt. Ltd. (subsidiary of Gensol) had been awarded O&M contract of the Plant for a period of 1 year from April, 2022 to March, 2023.
• Plant achieved a gross PLF of 15.6 % for FY 2022-23.
7. GMR Rajam Solar Power Private Limited (GRSPPL). Rajam:
GRSPPL, a wholly owned subsidiary of GEL, operates 1 MW Solar power plant in Rajam, Andhra Pradesh since January, 2016.
• The Company had signed a 25 year PPA with both GMR Institute of Technology (700KW) and GMR Varalakshmi Care Hospital (300KW) for the sale of power generated.
• M/s. Param Renewable Energy Pvt. Ltd. (subsidiary of Gensol) has been awarded O&M contract of the Plant for a period of 5 years from July, 2021 to June, 2026.
• Plant achieved gross PLF of 14.66% for FY 2022-23.
B. Projects:1. 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.
• Post execution of Project Development Agreement (PDA), several key activities have been completed.
• Technical design of the Project has been finalized post detailed technical appraisal by a seven-member Panel of Experts (empaneled with IFC) and Hydraulic model studies.
• The Power Sale Agreement (PSA) with Bangladesh Power Development Board (BPDB) for supply of 500 MW Power, has been initialed by all three Parties, BPDB, GMR Upper Karnali Hydropower Limited and NTPC Vidut Vyapar Nigam Limited and is in final stage of execution.
• Interconnection point and the Delivery Point have been finalized and approved by Govt. of India in consultations with Govt. of Nepal and BPDB for transmission of power from the Project in Nepal to Bangladesh using the India grid system.
2. GMR (Badrinath) Hydro Power Generation Private
Limited (GBHPL) - Badrinath - 300 MW:
• The Alaknanda Power Project is a 300 MW run-of-the-river power facility to be constructed on the Alaknanda River in the Chamoli district of the state of Uttarakhand.
• The Project has also achieved registration with UNFCCC as a CDM Project.
• The possession of entire land required for project development (including forest land and private land) has been completed.
• The power project had received, required statutory permits and clearances and was in state of readiness for the start of construction when Hon'ble Supreme
Court had issued a stay order for all such projects in the state with similar status. However, financial closure process has been held-up due to Hon'ble Supreme Court stay order on 24 Hydro Electric Projects in Uttarakhand and the stay order is in effect till date.
• Upon the vacation of Stay by Supreme court the Company will initiate the Contract awarding process and update the project cost and initiate financial closure (FC) process.
3. GMR Londa Hydropower Private Limited - 225 MW:
• The Talong Londa HEP is a 225 MW Hydropower project in East Kameng district in Arunachal Pradesh.
• The Detailed Project Report ("DPR") has been prepared and it has received techno-economic concurrence from the Central Electricity Authority.
• Environmental Impact Assessment (EIA) / Social Impact Assessment (SIA) studies have been completed for the project & public hearing have been successfully conducted.
• EIA & Environment Management Plan (EMP) studies were finalised and were submitted with Ministry of Environment, Forest and Climate Change (MoEFCC) for grant of Environmental Clearance (EC).
• The EAC of MoEFCC has recommended for Environmental clearance and accordingly MoEFCC had issued In-principle Environmental clearance to this project. However, formal EC shall be granted by MoEFCC after obtaining the Forest- stage-I clearance.
• Forest proposal for diversion of 280.54 hectare Forest land has been scrutinized by the Government of Arunachal Pradesh and forwarded to MoEFCC, Delhi. We are pursuing with MoEFCC and Regional MoEF office for early issuance of Stage-1 Forest clearance.
• Defence clearance for setting up the project has been received from Ministry of Defence MoD, GoI.
• Based on revised e-flow norms received in September, 2017 and basin study report of MoEF in January, 2018, CEA had advised us to undertake revised Power potential studies (PPS). The revised PPS stands approved by CEA (in June, 2020) with same capacity of 225 MW and with enhanced design energy benefit of 1,028 MUs per annum and annual energy benefit as 1042.79 MUs per annum.
• The Company is continuously engaged with the Government of Arunachal Pradesh for further development and way forward.
C. Mining Assets:PT Golden Energy Mines Tbk (PT GEMS):
Group through its overseas subsidiary, GMR Coal Resources Pte. Limited, held 30% equity stake in PT Golden Energy Mines Tbk (PT GEMS), a group company of Sinarmas Group, Indonesia.
In order to deleverage the balance sheet and create shareholder value, we divested our 30% equity stake in PT GEMS in Indonesia to PT Radhika Jananta Raya, a subsidiary of PT ABM Investama Tbk ("ABM"), following a competitive bidding process. GMR Coal Resources Pte Ltd ("GCRPL"), a subsidiary of GPUIL, received a consideration of about USD 420 Mn along with deferred consideration based on mutually agreed milestones.
Transportation and EPC sector
GPUIL's transportation business consists of the Highway segment, which is engaged in the development of Highways on a BOT / Annuity basis. As on date, the Transportation Business holds a portfolio consisting of four operational roads located in Andhra Pradesh, Telangana, Haryana, Punjab and Tamil Nadu, with a total length of approx. 1460 lane kilometers.
GPUIL's EPC Business is engaged in delivering EPC solutions in the infrastructure sector, with an increasing focus on provision of construction services to the railway sector. Our current portfolio mainly comprises of Dedicated Freight Corridor Projects in the States of Uttar Pradesh, Haryana and Punjab.
Highways:
The GPUIL Highways portfolio consists of a healthy mix of two BOT (Annuity) and two BOT (Toll) projects with a total operating length of 1,460 lane kilometers.
During FY 2022-23, Hyderabad Vijayawada (GHVEPL) traffic increased by 14% over previous year. Ambala Chandigarh (GACEPL) traffic also improved post covid and farmer strike but remains affected off and on due to congestion caused by various improvement works on the highway by NHAI and alternate roads. Extension of concession period for 429 days has been accorded by NHAI, on account of farmer strike. Extension of 26 days is under process on account of covid.
At the Chennai Outer Ring Road annuity project (CORR), all land acquisition related balance physical works have been completed and final COD is received.
Further, during the year, we have carried out major maintenance for 52 Km stretch of Hyderabad - Vijayawada project, 19 Km stretch of Adloor Yellareddy - Gundla Pochanpalli project and 26 Km stretch of Ambala Chandigarh Project. This will improve the riding quality of the surface and will provide the users a safe and high-quality ride.
At all GMR highways, high-pressure sodium vapour (HPSV) street lights have also been converted to LED lights without incurring any capital expenditure for achieving energy saving.
Expenditure control during the times of crisis by using alternative material and technologies are the key areas on which the Group is focusing, in order to address the pandemic related and other disruptions affecting revenue growth opportunities.
During FY 2022-23 significant progress has also been made in ongoing arbitrations against NHAI and the Government of Tamil Nadu.
EPC
Group was awarded EPC contracts by Dedicated Freight Corridor Corporation of India Limited (DFCCIL) to construct two Dedicated Freight Corridors (i) from New Bhaupur to New Deen Dayal Upadhyay Junction (Packages # 201 and 202) in the State of Uttar Pradesh and (ii) from Ludhiana -Khurja - Dadri (Packages # 301 and 302) in the States of Haryana, Uttar Pradesh and Punjab. Company has completed 91% in EDFC Package 201; 96% in EDFC Package 202; 82% in EDFC Package 301 and 91% in EDFC Package 302.
EPC Division has successfully commissioned the last section between Ahraura - New Deen Dayal Upadhyay Junction in June 2023 thereby completing 417 Km of stretch between New Bhaupur and New Deen Dayal Upadhyay Junction under Packages # 201 and 202.
Presently 25 pairs of IR goods trains are running on the EDFC Track between New Bhaupur and New Deen Dayal Upadhyaya junction.
This shift of goods trains to the dedicated freight corridor is expected to offer significant reduction of Green House Gas (GHG) emissions in the Transportation Sector in the Country.
Mr. Ashwini Vaishnaw, Hon'ble Minister for Railways, while addressing DFCCIL's 17th Foundation Day on November 01, 2022, declared DFCCIL as "Jewel of Indian Railways"
URBAN INFRASTRUCTURE:
Our Urban Infrastructure Business is engaged in holding and developing land in India as Special Investment Regions (SIR), which are special economic interest areas. We are currently holding land parcel in the Krishnagiri district of the state of Tamil Nadu in a subsidiary company GMR Krishnagiri SIR Ltd (GKSIR) in a joint venture with Tamil Nadu Industrial Development Corporation ("TIDCO"). Additionally, our Company, through other subsidiaries possesses large land parcels in the Krishnagiri district. These land parcels form part of the Bangalore - Chennai industrial corridor. Our Company has undertaken the development of SIR in a phased manner.
GMR Krishnagiri Special Investment Region (GKSIR)
The Group through GKSIR & other subsidiaries had around 1,430 Acres of land in Krishnagiri District, Tamil Nadu for developing industrial infrastructure at the beginning of FY 2022-23. During the FY 2022-23, the Group has sold around 280 Acres including around 213 Acres to TN state govt. agency (SIPCOT) & around 5 Acres to Tata Electronics Pvt Ltd (TEPL) in addition to 504 Acres sold to TEPL in previous year. TEPL has established a greenfield mobile phone component manufacturing facility with a projected investment of
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(5) of the Companies Act, 2013:
a) that in the preparation of the annual accounts for the year ended March 31, 2023, 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 no. 2 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, 2023 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 accounts 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 are operating effectively;
f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Corporate Governance
The Company continues to follow the Business Excellence framework, based on world class Malcolm Baldrige Framework for Performance Excellence which was adopted by GMR Group in the year 2010. With over a decade now, the deployment of the GBEM framework has taken roots in over 15 Group Businesses.
Various Continuous Improvement and Break-Through Innovation initiatives under the umbrella of GBEM have yielded tremendous benefits to various Group Companies in terms of Cost Savings and new avenues for revenue generation. The key initiatives like 5S, Kaizens, Idea Factory, CIPs [Continuous Improvement Projects] and regular BE Assessments have been implemented with lot of rigor and enthusiasm. A Governance Structure is in place along with timely Rewards and Recognitions to GMRites contributing to these initiatives, has helped to grow and sustain these initiatives. 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
' 4,500 Crores and with employment potential of 18,000 persons and commercial production has already started. GKSIR is in discussion with various clients to sell majority of its land and evaluating development of a land parcel in Phase 2. An extent of 161 Acre of GKSIR & other subsidiaries land has been notified by SIPCOT for acquisition to develop new industrial clusters.
The Group is in discussion with various clients to sell majority of balance land and evaluating development of a small land parcel in Phase 2.
GMR Aviation Private Limited (GAPL)
'GAPL owns and operates one of the best fleet in the country and addresses the growing needs of charter services. In order to boost revenues and rationalize overhead costs, GAPL entered into a management contract with Jet Set Go - a general aviation fleet aggregator, commonly referred to as the "Uber of the Skies". As per the agreement, Jet Set Go has taken responsibility for operations and sourcing of external clients for the use of GAPL aircrafts and the business has shown marked improvement over the past years. All maintenance contracts have also been renegotiated leading to reduction in costs. We are confident that GAPL will continue on the turnaround path.
Consolidated Financial Statements
In accordance with the Companies Act, 2013 and Ind AS 110 -Consolidated Financial Statements read with Ind AS 28 - Investments in Associates and Joint Ventures, the audited consolidated financial statements are provided in the Annual Report.
Holding, Subsidiaries, Associate Companies and Joint Ventures
As on March 31, 2023, the Company had 72 subsidiary companies apart from 3 associate companies and joint ventures. During the year under review, GMR Green Energy Limited (Formerly known as GMR Green Energy Private Limited) had become subsidiary of the company. Further during the year under review the entities listed in Annexure-B to this Report have ceased to be the Company's subsidiaries or associates.
The complete list of subsidiary companies and associate companies (including joint ventures) as on March 31, 2023 in terms of the Companies Act, 2013 is provided as Annexure-A to this Report.
The Policy for determining material subsidiaries may be accessed on the Company's website at the link: https://investor.gmrpui.com/pdf/ 6.Policy on Material subsidiaries.pdf
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 as Annexure-C to this Report and therefore not reported to avoid duplication.
The financial statements of the subsidiary companies have also been placed on the website of the Company at https:// investor.gmrpui.com/annual-account-of-subsidaries.
Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the said Report.
Business Responsibility & Sustainability Report
As stipulated under Regulation 34(2)(f) of SEBI LODR read with Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021 issued by the Securities and Exchange Board of India (SEBI), the Business Responsibility & Sustainability Report (BRSR) for the FY 2022-23, describing the initiatives taken by the Company from an 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 2022-23 with related parties referred in Section 188(1) of the Companies Act, 2013 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 referred in Section 188(1) of the Companies Act, 2013 which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Since all the related party transactions were in ordinary course of business and at arm's length basis, Form AOC-2 is not applicable.
The Policy on related party transactions as approved by the Board may be accessed on the Company's website at the link: https:// investor.gmrpui.com/pdf/3.Policy on Related Party Transaction.pdf . Your Directors draw attention of the members to Note no. 32 to the standalone financial statement which sets out related party disclosures.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Policy (CSR Policy), of the Company indicating the activities to be undertaken by the Company, may be accessed on the Company's website at the link: https:// investor.gmrpui.com/pdf/1.CSR POLICY-GPUIL - Final.pdf. The details of the CSR Committee are provided in the Corporate Governance Report which forms part of Board's report.
The Company has identified the following focus areas towards the community service / CSR activities, which inter alia include:
• Education
• Health, Hygiene & Sanitation
• Empowerment & Livelihoods
• Community Development
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. However, the Company,
through its subsidiaries/ associate companies spent an amount of ' 5.83 Crore during the year on CSR activities. The details of such activities carried out with the support of GMR Varalakshmi Foundation (GMRVF), Corporate Social Responsibility arm of the GMR Group, have been highlighted in Business Responsibility and Sustainability Report. The Annual Report on CSR activities is annexed as "Annexure D" to this Report.
Risk Management and Environment, Social and Governance (ESG) journey
The Board of Directors of the Company has a Risk Management Committee which is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has an additional oversight in the area of financial risks and controls. In addition, the updates on Enterprise Risk Management (ERM) activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.
The Company has in place the Risk Management Policy duly approved by the Board of Directors designed to identify, assess and mitigate risks appropriately.
Currently, in opinion of the Board, there are no risks that threaten the existence of the Company. However, details of the risk concerns, threats Identification, assessment, profiling, treatment and monitoring including ESG concerns are covered in MDA section, which forms part of this Report
Significant developments during the year under review are as follows:Energy
GPUIL's energy business is engaged in operating/ developing diverse power plants including coal-fired, gas-fired, hydro, solar plants and power trading.
• FY2022-23 was a year of recovery of global and Indian economies. In India, economic recovery resulted in huge surge in power demand. To meet the surge in demand, the government asked power producers to import coal to maintain adequate plant level coal stocks.
• Our power plants have consistently improved in the fields of efficiency, safety and ESG, winning accolades and bagging awards. Our Warora plant (GWEL), for example, received certifications on 5S, ISO certifications under various categories - ISO-9001-201 5; ISO 14001-2015; ISO 45001-2018; ISO 50001:2018; ISO 46001:2019 without any non-conformities. In the previous year, GHG assessment as per ISO 14064 was also carried out. Similarly, our plant at Kamalanga (GKEL) also received awards on efficiency, management and certifications on ISO compliances.
• One of the key issues that our coal based plants were grappling with was the regulatory receivables that have been due from DISCOMs but have been contested for a number of years. We
have made significant progress on the resolution of many of these matters, and realization of such receivables will greatly assist these businesses in improving their debt situation and improving the potential returns to shareholders.
• The geo-political issues and supply chain disruptions had already had an impact on coal pricing for some time, and the positive impact had helped the PTGEMS coal mine business in Indonesia to generate significant dividends. Taking advantage of the higher coal pricing, and superior financial performance of PTGEMS, your company was able to divest its 30% stake in PTGEMS at an attractive pricing. This divestment has not only helped the group to exit from the non-core coal mining activity but also helped in reducing significant amount of debt in the company.
• The gas-based power generation units within the group were unable to restart operations on account of the continuing lack of gas supply. Various representations have been made to the Government through industry forums, but a final solution is yet to be announced.
• We have also completed the construction of the Bajoli Holi Hydro Project and achieved COD for the same. The construction of the project has faced many challenges, including floods, etc. The completion of the construction phase of this project is a major milestone for the Company.
Transportation and EPC sector
GPUIL's Transportation business consists of Highways segment, which is engaged in the development of Highways on a BOT / Annuity basis. As on date, the Transportation Business holds a portfolio consisting of four operational roads located in Andhra Pradesh, Telangana, Haryana, Punjab and Tamil Nadu, with a total length of approx. 1460 lane kilometers.
GPUIL's EPC Business is engaged in delivering EPC solutions in the infrastructure sector, with an increasing focus on provision of construction services to the railway sector. Our current portfolio mainly comprises of Dedicated Freight Corridor Projects in the States of Uttar Pradesh, Haryana and Punjab.
Some of the risks that had emerged in the past couple of years stand mitigated thanks to the economic recovery and as some of the long-pending disputes were resolved/ are being close to be resolved.
• During FY2022-23, Hyderabad Vijayawada (GHVEPL) traffic increased by 14% over last year, which was commensurate with economic recovery. For our Ambala Chandigarh (GACEPL), extension of concession period for 429 days has been accorded by NHAI on account of farmer strike. Extension of 26 days is under process on account of Covid-19.
• Our Annuity-based Chennai Outer Ring-Road (CORR) road saw a significant achievement when it was awarded the compensation for losses that had resulted from various inhibiting factors and deviations in contract.
• The Dedicated Freight Corridor Project is a highly prestigious and challenging project. We are proud to have constructed a major section of this milestone project which is expected to have a highly material impact on the logistics infrastructure and competitiveness of India. We are at the final stages of completion of this project and the Government has already started operating freight trains on the sections handed over.
Urban Infrastructure:
Our Urban Infrastructure Business is engaged in holding and developing land in India as SIRs, which are special economic interest areas. We are currently holding land parcel in the Krishnagiri district of the state of Tamil Nadu in a joint venture with Tamil Nadu Industrial Development Corporation ("TIDCO").
Additionally, our Company, through subsidiaries possesses large land parcels in the Krishnagiri district. The Krishnagiri SIR forms part of the Bangalore-Chennai industrial corridor. Our Company has undertaken the development of SIR in a phased manner and there are a number of initiatives in various stages of planning to monetize the area. We have made significant progress in land monetization over the past 12 to 24 months.
GPUIL, through its leadership and management takes proactive measures to mitigate risks:
• The senior leadership of the company along with senior stakeholders of businesses worked closely in resolving the above issues at each business / function level and key issues were escalated to the Management Committee of the Company.
• While the impact of sanctions on Russia were being felt across the globe, India had exploited its unique relationship with the country and continued to import Russian crude at favorable terms which has limited the economic impact. This strategy by Indian government has helped economic activities recover steadily, thereby having positive impact on our business operations both in energy sector and transportation sector.
• As business activities rebound, there is a fresh impetus to resolving the ongoing disagreements/ disputes in contracts and concessions. Our Company is well positioned in resolving disagreements and disputes such that the outcomes can be expected to be beneficial to our stakeholders.
• While the risk treatment by our Company have reduced the severity of some risks, a few risks persist, owing to their nature. One such risk is cyber-security risk that is ever-changing in sophistication and probability of materializing. Our Company is well-equipped in mitigating cyber-security risks through our frequently upgraded and updated security measures.
• Our Company continues to be in position of utmost readiness for mitigating physical risks to our businesses and to recover to normal operations level swiftly and efficiently. For this our Disaster Recovery Plan and Business Continuity Plan remain in full force at all times.
• The Company takes stock of the risks that it faces and the mitigation measures it takes and apprises the Risk Management Committee of the Board periodically.
• We have carried out a comprehensive exercise of benchmarking our existing operations and business strategies for establishing ESG best practices in our industry and continually strive to excel in our responsibilities towards environment, our stakeholders and community with highest standards of governance.
Updates on ERM activities are shared on a regular basis with Management Assurance Group (MAG), the Internal Audit function of the Group.
Internal Financial Controls
The Company has put in place policies and procedures including the design, implementation and monitoring of internal controls over its operations to ensure orderly and efficient conduct of its businesses, including adherence to Company's policies and procedures, safeguarding of assets, prevention and detection of fraud, accuracy and completeness of accounting records and timely preparation of reliable financial disclosures under the Companies Act, 2013.
These controls and processes have been embedded and integrated with SAP and / or other allied IT applications which have been implemented. During the year under review, these controls were reviewed and tested by the Management Assurance Group of the Company. The Statutory Auditors of the Company have also tested the Internal Controls over financial reporting.
There were no reportable material weaknesses observed in the design or operating effectiveness of the controls except in few areas, where the risk has been identified as low and there is a need to further strengthen the controls. Corrective and preventive actions, as appropriate are taken by the respective functions.
Directors and Key Managerial Personnel
At the 3rd Annual General Meeting ("AGM") of the Company held on September 27, 2022, the shareholders had approved the appointment of Mr. G.M. Rao, Chairman, Mr. Grandhi Kiran Kumar and Mr. B.V.N. Rao as Non-executive Directors. The shareholders at the said AGM also approved the appointment of Mr. Srinivas Bommidala as Managing Director and Mr. G. Subba Rao as Executive Director for a term of three years w.e.f January 31, 2022. The shareholders also approved the appointment of Mr. Madhva Bhimacharya Terdal as Executive Director for a term of two years w.e.f August 08, 2022.
The shareholders at the aforesaid meeting also approved the appointment of Dr. Emandi Sankara Rao, Mr. I.V. Srinivasa Rao, Dr. Satyanarayana Beela, Mr. Subodh Kumar Goel, Mr. Suresh Narang and Dr. Siva Kameswari Vissa, as Independent Directors for a term of five years w.e.f January 31, 2022 or upto the conclusion of 7th AGM, whichever is earlier. In the opinion of the Board, they possess integrity, expertise and experience (including proficiency) required for appointment as Independent Director.
Since the end of the financial year, Mr. I.V. Srinivasa Rao and Mr. S.K. Goel, Independent Directors resigned w.e.f July 10, 2023 and July 28, 2023 respectively. Both the Directors have resigned due to personal reasons and other professional commitments.
The Board of Directors place on record their deep sense of appreciation for the contributions rendered by Mr. I.V. Srinivasa Rao and Mr. S.K. Goel during their association with the Company.
Based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have appointed Ms. Suman Naresh Sabnani, Mr. Shantanu Ghosh and Dr. Fareed Ahmed as Additional Directors in the category of Independent Directors considering their competencies, skills, integrity, expertise and experience including their proficiency required for the appointment, with effect from August 04, 2023 to hold office for a term of three (3) years from the date of their appointment or upto the conclusion of the 6th AGM of the Company, whichever is earlier, subject to approval of shareholders at the ensuring AGM. The Company has received declaration from them confirming that they meet the criteria for appointment as Independent Directors and their name appear in Independent Directors' Data Bank maintained by the Institute of Corporate Affairs (IICA).
In accordance with the provisions of the Companies Act, 2013, the Articles of Association of the Company and based on the mutual consent amongst the Directors, Mr. Grandhi Kiran Kumar and Mr. B.V.N. Rao, Directors, retire by rotation at the ensuing AGM of the Company and being eligible have offered themselves for reappointment. The Nomination and Remuneration Committee and the Board on the basis of performance evaluation, recommend the re-appointment of Mr. Grandhi Kiran Kumar and Mr. B.V.N. Rao as Directors of the Company, liable to retire by rotation.
The brief resumes and other details relating to the directors who are proposed to be appointed/ re-appointed, as required to be disclosed as per the provisions of the SEBI Listing Regulations/Secretarial Standard are given in the Annexure to the Notice of the 4th AGM.
Board Evaluation
Annual performance evaluation of the Board, its Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements under SEBI LODR have 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 NRC reviewed the performance of the Individual Directors on criteria such as the contribution of the Individual Directors 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.
Statutory Auditors' Qualification / Comment on the Company's
Standalone financial statements
1. As stated in note 5(2) to the accompanying standalone financial statements, the Company has invested in GMR Generation Assets Limited ('GGAL') and GMR Energy Projects Mauritius Limited ('GEPML'), subsidiaries of the Company, which have further invested in step down subsidiaries and joint ventures. Also, the Company together with GGAL and GEPML has investments in GMR Energy Limited ('GEL'), a joint venture of the Company, amounting to ' 895.74 crore and has outstanding loan (including accrued interest) amounting to ' 1,768.36 crore recoverable from GEL as at March 31, 2023. GEL has further invested in GMR Kamalanga Energy Limited ('GKEL'), subsidiary of GEL. The aforementioned investments are carried at their respective fair value in the accompanying standalone financial statements as per Ind AS 109 - 'Financial Instruments'.
As further mentioned in note 5(5), the fair value of investment in GKEL considered for the purpose of determining the carrying values of aforesaid investments is based on the valuation performed by an external expert using the discounted future cash flows method which is significantly dependent on the achievement of certain key assumptions considered in aforementioned valuation such as settlement of disputes with customers and timely realization of receivables, expansion and optimal utilization of existing capacity, and favourable outcome of the litigations with respect to claims of capital creditors filed against GKEL.
Owing to the aforementioned uncertainties, we are unable to comment upon adjustments, if any, that may be required to the carrying value of the aforesaid loans (including accrued interest) and investments as at March 31, 2023 and the consequential impact on the accompanying standalone financial statements.
Management's response to the Statutory Auditors' Qualification / Comment on the Company's Standalone financial statements
Management view is documented in note 5(5) of standalone financial statement of GPUIL for March 31, 2023. As detailed in the notes, the business plans (including expansion and optimal utilization of existing capacity), valuation assessment by an external expert during the year ended March 31, 2023, the management is of the view that the carrying value of the investments in GKEL held by GEL as at March 31, 2023 is appropriate.
Statutory Auditors' Qualification / Comment on the Company's
Standalone financial statements
2. The Company's internal control system towards estimating the fair value of its investment and loans (including accrued interest) in a joint venture, as more fully explained in note 5(2) to the standalone financial statements, were not operating effectively
A senior non-independent Director of the Company also had one-on-one interactions with the Independent Directors to have further insight on the governance aspects and effectiveness of the Board process.
The Independent Directors at their separate meeting held during the year had also reviewed the performance of the Non-Independent Directors, Chairman and the Board as a whole.
Policy on Directors' Appointment and Remuneration
The Company has devised a Nomination and Remuneration Policy ("NRC Policy") which inter alia sets out the guiding principles for identifying and ascertaining the integrity, qualification, expertise and experience of the person for appointment as Director, Key Managerial Personnel (KMP) and Senior Management Personnel. The NRC Policy further sets out guiding principles for the Nomination and Remuneration Committee for determining and recommending to the Board the remuneration of Managerial Personnel, KMP and Senior Management Personnel. There has been no change in NRC Policy after its formulation.
The Company's NRC Policy for Directors, Key Managerial Personnel and Senior Management is available on the Company website at https://investor.gmrpui.com/pdf/?.Nomination Remuneration Policy-r1.pdf.
In recognition of the importance of having a diverse Board towards success of the organization the Company has adopted the Board diversity policy. The Policy provides for having an appropriate blend of functional and industry experts on the Board, diversity in terms of cultural background, gender, skillset etc.
Declaration of Independence
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 Regulation 16 of SEBI LODR and there has been no change in the circumstances affecting their status as Independent Directors of the Company. The Company has also received a declaration from all the Independent Directors that they have registered their names in the Independent Directors Data Bank.
Further, the Independent Directors have confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and also complied with the Code of Conduct for directors and senior management personnel, formulated by the Company.
Auditors and Auditors' Report Statutory Auditors
M/s Walker Chandiok & Co. LLP, Registration No. (001076N/N500013), were appointed as Statutory Auditors of the Company for a term of 5 (five) years from the conclusion of the 1st AGM held on October 16, 2020, till the conclusion of the 6th AGM of the Company.
due to uncertainties in the judgments and key assumptions made by the company in such estimations, which could result in the Company not providing for adjustments, if any that may be required to the carrying values of investments, loans and its consequential impact on the accompanying standalone financial statements.
Management's response to the Statutory Auditors' Qualification / Comment on the Company's Standalone financial statements
The Company has a well-defined system in place to assess the appropriateness of the carrying value of its investments. The Company engages top-tier independent valuation experts to evaluate financial model and assess the fair valuation of its investments. The process followed in conducting these assessments is also reviewed and approved by Management Assurance Group (MAG) who test the appropriateness of valuation models and accuracy of inputs used in model to determine the recoverable value.
Statutory Auditors' Qualification / Comment on the Company'sconsolidated financial statement
1. As stated in note 7(b)(12)(i) to the accompanying consolidated financial statements, the Group has an investment amounting to ' 895.74 crore (net of impairment) in GMR Energy Limited ('GEL'), a joint venture company and outstanding loan (including accrued interest) amounting to ' 2,188.80 crore recoverable from GEL and its subsidiaries and joint ventures as at March 31, 2023. GEL has further invested in GMR Kamalanga Energy Limited ('GKEL'), a subsidiary of GEL.
As further mentioned in note 7(b)(12)(iii), the fair value of investment in GKEL considered for the purpose of determining the carrying value of aforesaid investment is based on the valuation performed by an external expert using the discounted future cash flows method which is significantly dependent on the achievement of certain key assumptions considered in aforementioned valuation such as settlement of disputes with customers and timely realization of receivables, expansion and optimal utilization of existing capacity, and favourable outcome of the litigations with respect to claims of capital creditors filed against GKEL.
In addition to the above, considering the erosion of net worth and net liability position of GKEL, we, in the capacity of auditors of GKEL have also given a separate section on material uncertainty related to going concern in the audit report on the Financial Statements of GKEL for the year ended March 31, 2023.
Owing to the aforementioned uncertainties, we are unable to comment upon adjustments, if any, that may be required to the carrying values of the loans (including accrued interest) and noncurrent investment as at March 31,2023 and the consequential impact on the accompanying consolidated financial statements.
Management's response to the Statutory Auditors' Qualification / Comment on the Company's consolidated financial statement
Management view is documented in note 7b(12)(iii) of consolidated financial statement of GPUIL for the year ended March 31, 2023. As detailed in the notes, the business plans (including expansion and optimal utilization of existing capacity), valuation assessment by an external expert during the year ended March 31, 2023, the management is of the view that the carrying value of the investments in GKEL held by GEL as at March 31, 2023 is appropriate.
Statutory Auditors' Qualification / Comment on the Company's consolidated financial statement
2. The Holding Company's internal control system towards estimating the carrying value of investment and loans (including accrued interest) in a joint venture, as more fully explained in note 7b(12)(i) to the consolidated financial statements, were not operating effectively due to uncertainties in the judgments and assumptions made by the Holding Company in such estimations, which could result in the Group not providing for adjustments, if any, that may be required to the carrying values of investments, loans (including accrued interest) and its consequential impact on the accompanying consolidated financial statements.
Management's response to the Statutory Auditors' Qualification / Comment on the Company's consolidated financial statement
The Group has a well-defined system in place to assess the appropriateness of the carrying value of its investments, including testing for impairments. The Group engages top-tier independent valuation experts to evaluate financial models and assess the fair valuation of its investments. The process followed in conducting these assessments is also reviewed and approved by Management Assurance Group (MAG) who test the appropriateness of valuation models and accuracy of inputs used in model to determine the recoverable value.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, your company with reference to its EPC business was required to maintain the cost records and the said cost records were also required to be audited. The Board of Directors at its meeting held on August 08, 2022, had appointed M/s JSN & Co., Cost Accountants (Firm Registration No. 000455), as cost auditors of the Company for conducting the audit of cost records for the FY 2022-23. The Shareholders of the Company at their 3rd AGM held on September 27, 2022, had ratified the remuneration payable to the Cost Auditors in terms of Rule 14 of the Companies (Audit & Auditors) Rules, 2014.
Audit Committee
Mr. I.V. Srinivasa Rao and Mr. S.K. Goel ceased to be member of the Audit Committee consequent upon their vacation of Office of Directorship. Dr. Fareed Ahmed and Ms. Suman Naresh Sabnani were co-opted as members of the Committee on August 04, 2023. Consequent to the re-constitution the Audit Committee comprises of Dr. Siva Kameswari Vissa as Chairperson, Dr. Satyanarayana Beela, Mr. Fareed Ahmed and Ms. Suman Naresh Sabnani.
All the recommendations made by the Audit Committee were accepted by the Board during the year.
Further details on the above committees and other committees of the Board are given in the Corporate Governance Report.
Vigil Mechanism
The Company has a Whistle Blower Policy, which provides a platform to disclose information regarding any purported malpractice, fraud, impropriety, abuse or wrongdoing within the Company, confidentially and without fear of reprisal or victimization. Your Company has adopted a whistleblowing process as a channel for receiving and redressing complaints from employees, directors and third parties, as per the provisions of the Companies Act, 2013, SEBI LODR and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
The details of the Whistle Blower Policy is provided in the Corporate Governance Report and also hosted on the website of the Company. https://investor.gmrpui.com/pdf/4.Policy on Whistle Blower.pdf
Number of Meetings of the Board
A calendar of Board and Committee Meetings is prepared and circulated in advance to the Directors. During the year, five (5) Board Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between two consecutive Board Meetings was within the period prescribed under the Companies Act, 2013 and SEBI LODR.
Particulars of Loans, Guarantees and Investments
A statement regarding Loans/ Guarantees given and Investments made covered under the provisions of Section 186 of the Companies Act, 2013 is made in the notes to the Financial Statements.
Conservation of energy, technology absorption and foreign exchange earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in "Annexure G" to this report.
Annual Return
Pursuant to Section 134 and Section 92(3) of the Companies Act,
Your company has prepared and maintained Cost Accounts and records for financial year 2022-23 as per sub-section (1) of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.
M/s JSN & Co., Cost Accountants (Firm Registration No. 000455), have been re-appointed as cost auditors by the board of directors on the recommendation of the audit committee at its meeting held on August 09, 2023 for the FY 2023-24 at a remuneration of ' 1,25,000 for conducting the audit of cost records of the Company pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.
Accordingly, a resolution seeking members' ratification for the remuneration payable to Cost Auditors, M/s. JSN & Co., Cost Accountants is included in the Notice to the ensuing AGM.
Secretarial Auditor
The Board had appointed M/s. V. Sreedharan & Associates, Company Secretaries in Practice, to conduct Secretarial Audit for the FY 202223. The Secretarial Audit Report of the Company as prescribed under Section 204 of the Companies Act, 2013 read with Regulation 24A of the SEBI LODR, for the FY ended March 31,2023 is annexed herewith as "Annexure E" to this Report. The Secretarial Audit report does not contain any qualification, reservation or adverse remarks.
Further, the Secretarial Audit reports of material unlisted subsidiaries of the Company incorporated in India, as required under Regulation 24A of the SEBI LODR for the financial year ended March 31, 2023 have been annexed as "Annexure F-1 to F-3".
The Board of Directors of your Company at its Meeting held on August 9, 2023 has re-appointed M/s. V. Sreedharan & Associates, Company Secretaries who has provided his consent and confirmed their eligibility to act as the "Secretarial Auditors" of the Company, to conduct the Secretarial Audit for the Financial Year 2023-24, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules,
Pursuant to provisions of the Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor Secretarial Auditors nor Cost Auditors have reported any incident of fraud to the Audit Committee or Board during the year under review.
Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Disclosures:
CSR Committee
The CSR Committee comprises of Mr. G. Subba Rao as Chairman, Dr. Emandi Sankara Rao and Dr. Satyanarayana Beela as members.
2013, as amended, copy of the draft Annual Return for the FY 202223 has been placed on the Company website at https:// investor.gmrpui.com/annual-reports
Particulars of Employees and related disclosures
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereto), is attached as "Annexure H" to this Report.
The information required under Rule 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including amendments thereof), is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
Dividend Distribution Policy
The Board has adopted Dividend Distribution Policy in terms of Regulation 43A of the SEBI LODR. The Dividend Distribution Policy is disclosed on the website of the Company at the link: https:// investor.gmrpui.com/pdf/7.Dividend distribution policy.pdf
Developments in Human Resources and Organization 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 Organization Development" at GMR Group.
Changes in Share capital
There was no change in authorized, issued and paid-up share capital of the Company during the year under review.
Foreign Currency Convertible Bonds
GMR Airports Infrastructure Limited (Previously known as GMR Infrastructure Limited or 'GIL') erstwhile Holding Company had on December 10, 2015 issued and allotted 7.5% Foreign Currency Convertible Bonds aggregating US$ 300,000,000 (FCCBs) due on 2075 to the Kuwait Investment Authority (KIA).
In accordance with the Scheme and the requirements of Section 2(19AA) of the Income Tax Act, 1961, part of liability pertaining to the outstanding FCCBs of GIL attributable to the Demerged Undertaking stands vested and was transferred to the Company. Accordingly, the FCCBs aggregating to US$ 275,000,000 (United States Dollar Two Hundred and Seventy Five Million) was vested to the Company. The tenure of FCCBs is 60 years from the date of allotment by GIL and FCCBs if converted shall account for 11,12,41,666 equity shares of the Company.
Debentures
The Company has not issued any debentures and there are no outstanding debentures as on March 31, 2023.
Environment 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. The details of initiatives/ activities on environment protection and sustainability are described in Business Responsibility Report forming part of Annual Report.
Change in the nature of business, if any
There is no change in the nature of business of the Company.
Significant and Material Orders passed by the Regulators
There are no significant and material orders passed by the Regulators or courts or tribunals impacting the going concern status and Company's operations in future.
Deposits
During the year under review, the Company has not accepted any deposit from the public. There are no unclaimed deposits/ unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
Compliance by Large Corporates:
Your Company does not fall under the Category of Large Corporates as defined under SEBI vide its Circular SEBI/HO/DDHS/CIR/P/2018/ 144 dated November 26, 2018, as such no disclosure is required in this regard.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.
There were no sexual harassment complaints pending or received during the year ended March 31, 2023.
Proceeding under Insolvency and Bankruptcy Code and One-time settlement
1. There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.
2. During the year under review, the Company has not made any one-time settlement.
Other than the matters disclosed in this Report, there are no other events or transections during the year that requires disclosures to be made in terms of the provisions of Companies Act, 2013.
Acknowledgements
Your Directors thank the lenders, banks, financial institutions, business associates, customers, Government of India, State Governments in India, regulatory and statutory authorities, shareholders and the society at large for their valuable support and co-operation. Your Directors also thank the employees of the Company and its subsidiaries for their continued contribution, commitment and dedication.
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